AGGRESSIVE CHINESE INVESTMENT IN TOURISM

KATHMANDU, Jan 11

Chinese investment in tourism sector has increased enthusiastically even though southern neighbor India still leads in terms of tourist arrival. Chinese investment in small, medium and big tourism infrastructure is rising, according to the Department of Industry.

China has established 219 tourism related projects in Nepal until now making investment commitment of over Rs 3 billion which is over 50 percent more than Rs 1.94 billion committed by India through 59 projects until mid-December, 2014. Director of the Foreign Investment Section at the department Bipin Rajbhandari says different countries have made investment commitment of Rs 16.17 billion in the tourism sector through 851 projects until the end of 2014. Investment commitment of Rs 511 million has arrived from China in the past two months for small projects alone, according to the department’s data.

Senior Vice President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Pashupati Murarka says rise in Chinese investment should be taken positively and encouraged further. “There seems to be competition between China and India in investing in Nepal as we have potential for both the countries. This is positive for Nepal,” he reasons. Rajbhandari says Chinese investment is rising even in other industries. He reveals Chinese investment has been rising in small hotels to big projects. Chinese investment is currently arriving for airline companies, hotels and infrastructure projects.

Nepal has been giving special priority to investment in the tourism sector with the rise in arrival of Chinese tourists. Tourism entrepreneurs have also taken broadening scope of Chinese investment in Nepal positively. Around 200,000 Chinese tourists are expected to arrive every year by 2016 considering the current trend. A total of 71,861 Chinese tourists visited Nepal in 2012. It rose to 113,173 in 2013.

“Increase in attraction of Chinese investors in the tourism sector along with the rise in arrival of Chinese tourists is good for Nepal,” Chairman of the Nepal chapter of Pacific Asia Travel Association (PATA) Suman Pandey says. “Even bigger Chinese investment is arriving in the aviation sector. This will help in economic development of Nepal,” he adds. General Secretary of the Hotel Association of Nepal (HAN) Binayak Shah also takes rise in Chinese investment in hotels, airline companies and other sectors positively.

The number of Chinese airlines operating flights to Nepal will rise to five from the start of 2015. Sichuan Airlines is starting flights from January while Himalayan Airlines is preparing to operate Lhasa-Kathmandu flights from the next month in cooperation with Tibet Airlines. Air China, China Eastern and China Southern have already been operating flights to Nepal.

China is also providing soft loan for construction of the regional international airport in Pokhara, a national pride project, through its Export Import (Exim) Bank. China CMC Engineering has already been handed over responsibility of constructing the airport. Similarly, Chinese company North-West Civil Aviation is constructing the Gautam Buddha Regional International Airport in Bhairahawa being constructed with loan assistance of the Asian Development Bank (ADB).

China is also providing six planes to the Nepal Airline Corporation (NAC) in grant and soft loan. The NAC is already operating commercial flights through one MA-60 and a Y-12 plane acquired in grant. It is preparing to bring the remaining four planes with soft loan. China has provided grant and soft loan of Rs 6.67 billion to buy the planes. Agreement was signed to buy one MA-60 and three Y-12 planes with soft loan of Rs 3.72 billion.