The government of the People's Republic of China regards it as its internationalist obligation to provide assistance to governments of friendly developing countries. In providing such assistance to other countries, China aims to help the recipient countries develop their national economy, safeguard their national independence, protect their national sovereignty and promote friendly relations as well as trade and economic cooperation between China and the developing countries.

Department in Charge and Chinese institutions Stationed in Foreign Countries

The department of Aid to foreign countries under the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) is the department in charge of all forms of aid to foreign countries. The Economic and Commercial Counselor's Office of the Embassy of the People's in foreign countries deals with all forms of Chinese Aid, under the instructions of MOFTEC, with their counterpart governments.

China's Way of providing Aid to Foreign Countries

To make the most of China's limited aid funds, the Chinese Government, on the basis of abiding by the Eight Principles Governing China's Aid to other countries, has made some reforms in its foreign aid and mainly adopt the following forms:
1. Preferential Loan with Interest Subsidized by the Chinese Government;
2. Joint Venture and Cooperation for China's Aid projects; and
3. Gratuitous assistance.

Sino-Nepal Development Cooperation:

Both China and Nepal are close neighbors. The roots of economic and cultural ties between the two countries date back to time immemorial. This age-old relationship was further strengthened by the establishment of diplomatic relations in 1955. With a view to promote economic cooperation, the first "Agreement between China and Nepal on Economic Aid" was signed in Oct. 1956 and the second "Agreement between the Government of the People's Republic of China and His majesty's Government of Nepal on economic aid" was signed on March 21, 1960, and the Protocol thereof on September 5, 1961 in Kathmandu. These basic documents provide the general terms and conditions for all economic cooperation programs between the two countries. Since the signing of the above-said Agreement and Protocol, China has been providing financial and technical assistance to Nepal. All the aid provided by the Chinese are based on the forms of gratuitous assistance.

In order to further enhance economic and trade cooperation between China and Nepal, an Exchange Note was signed between the two Governments in October 1983 to set up an Economic and Trade Joint Committee between the People's Republic of China and His Majesty's Government of Nepal. The first and second sessions were held in Beijing and Kathmandu respectively in December 1984 and March 1986. Since then, eight sessions of the Committee were held alternately in Beijing and Kathmandu. The latest Eighth session of the Committee was held from April 15-17, 1998 in Kathmandu.

Until now, the Chinese Government have assisted Nepal to undertake twenties projects. Other 5 new projects, agreed by the two Governments, will be undertaken quickly. All these projects are mainly in the fields of transport, hydropower and irrigation, industry, public facilities etc., various other aid projects were undertaken with the Chinese assistance. The list is as follows: -

a. Transport

(1) Kathmandu-Kodari (Arniko) highway 104KM
(2) Prithivi (Kathmandu- Pokhara) highway 176KM
(3) Kathmandu- Bhaktapur highway 12.78 KM
(4) Kathmandu- Bhaktapur Trolley Bus 11.73KM
(5) Kathmandu Ring Road 27.24KM
(6) Gorkha- Narayangarh Highway 60.93KM
(7) Pokhara- Baglung Road 70.2KM
(8) Seti River Bridge at Pokhara
(9) Syafrubensi - Rasuwagadhi Highway (will be implemented) 21.4KM
(10) The project of consolidating the Seti River Bridge in Pohkara (will be implemented)

b. Industry

(1) Bansbari Leather and Shoe Factory;
(2) Kathmandu Brick and Tile Factory;
(3) Bhaktapur Brick Factory;
(4) Hetauda Cotton Textile Mill;
(5) Bhrikuti Paper Mill;
(6) Industrial Gloves and Apron Manufacturing at Bansbari;
(7) Lumbini Sugar Mill.

c. Hydropower and Irrigation

(1) Sunkoshi Hydroelectricity Plant;
(2) Pokhara Water Conservancy and Irrigation Project.

d. Health

(1) B. P. Koirala Memorial Cancer Hospital, Chitwan;
(2) A Civil Service Hospital in Kathmandu (will be implemented).

e. Education

(1) A Polytechnic Institute in Banepa (will be implemented).

f. Sports

(1) Construction of Sports Facilities, Including Swimming Pool, Shooting Range, Scoreboard,Public Broadcast and Address System, Synthetic Tracks and Night-lighting Facilities, two batches of Sports Equipment for the 8th South Asian Federation games in 1999.

g. Public facilities

(1) Birendra International Convention Center;
(2) Warehouse in Kathmandu and Birganji;
(3) Project of Improvement and Development of Nepal Television.

Over the past forty-odd years, except the projects mentioned above, the Chinese Government had provided general goods to Nepal Government, such as rice, salt, jeep, a O. B. van, some trolley buses, encephalitis B vaccines, and live goats etc. And also had dispatched 2 terms Chinese Medical Team with 34 doctors, many Technical Cooperation Teams to Nepal which had cultivated many engineers and technicians on arch bridge technology, planting and farm products processing and so on.

Chinese Government's disinterested assistance to Nepal have played positive role on the development of national economy, the improvement of people's livelihood of Nepal and the strengthening and reinforcement of Sino-Nepal friendship, which have been deeply welcomed and praised by the Nepalese people. We really believe aids are always mutual, and with the efforts of the Governments and people of our countries, the mutual benefit and cooperation between the countries will surely blossom further.