China blocks trading points citing Covid-19, Nepal traders suffer losses

China for the last two years has imposed an ‘undeclared blockade’ of Nepal, allowing only a few containers to cross. Now, it has completely shut down both trading points with Nepal — Tatopani and Rasuwagadhi, the two main ones at border for importing goods from China.

Initiated under the guise of preventing the spread of Covid-19, this blockade has been in place since early 2020, creating significant obstacles for Nepali traders and impacting their livelihoods.

Ashok Shrestha, president of Nepal Trans-Himalayan Border Commerce Association, told WION that they are not sure when will the trading resume.

The northern neighbour has tightened its grip on Rasuwagadhi and Tatopani — the two most crucial trading points.

“For two years, the trading with China has come down drastically. After the 2015 earthquake, Tatopani was shut down for almost four years, and later when it was opened, the border was again shut down by Chinese authorities citing COVID-19,” Shrestha told WION.

“On a daily basis, 6-7 trailers from Tatopani and 13-14 trucks from Rasuwagadhi used to cross over to China but the export has been zero for the past few years due to which Nepali traders are losing trust in China,” he added.

Due to the inability to transport the imported goods, buyers during Dashain, one of the main festivals of Hindus, could face a hike in prices of the items along with limiting their choices on the goods they wish to purchase, said Shrestha.

Nepali officials said that the border will be closed for a week, however, it is not sure if trading will resume as there are high chances of the blockade getting extended.

Nepali traders are bound to incur losses if the ban continues further.

Customs officials say that due to the increase in the COVID-19 cases in Tibet, the goods-carrying vehicles have not arrived from Lhasa to Khasa.

This development comes after Nepal foreign minister Dr. Narayan Khadka visited China and held bilateral talks with his Chinese counterpart Wang Yi on August 10.

Khadka had ‘a cordial and fruitful meeting with his Chinese counterpart’ as per the Nepal foreign ministry.

“The two ministers took stock of all aspects of Nepal-China relations and agreed to promote cooperation in areas of mutual interest,” the ministry said.

During the visit, China assured Nepal to resume trade activities via Kyerung and Tatopani border points and Hilsa-Pulang for one-way trade. However, China shut down both trading points after the bilateral talks.

Presently, there are nine trading routes between Nepal and China, including Hilsa, Nagcha, Ko Rala, Gorkha Larka, Rasuwagadhi, Tatopani, Lamabagar, Kimathanka, and Olangchung Gola. Of these, Rasuwagadhi and Tatopani are the most crucial and have been closed since January 2020.

The net result of this has been a drastic reduction in trade between Nepal and China. According to Nepal’s Trade and Export Promotion Centre, Chinese exports to Nepal shrunk by 3 percent from 17.6 percent to 14.6 percent in a span of two years.

China exports mainly electronic goods and garments to Nepal, while Nepal exports mainly carpets, handicraft items, and traditional items to China. Nepal’s exports to China have been reduced to 0.4 percent from 1.8 percent, as per the data earlier this year.

Nepal’s export to China is the lowest ever in Nepal-China trading history at 0.4 percent.

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