After 44 years of closure China and India agreed on Sunday to
reopen border trade through the Nathu La Pass from July
Officials from both sides ended their discussions on the issue
in Lhasa, capital of Tibet Autonomous Region, and signed the agreed
minutes on Sunday.
The Nathu La Pass is 4,545 meters above sea level. It's 460
kilometers from Lhasa and 550 kilometers from the Indian coastal
city of Calcutta. Historically the pass had been an important trade
passage between the two countries.
The reopening is expected to be a major boost to bilateral trade
between the two populous countries.
Trade through the pass accounted for 80 percent of the total
border trade volume between China and India in the early 1900s.
However, trading through the pass was suspended in 1962 after
"The reopening of border trade will help end economic isolation
in this area and play a key role in boosting the market economy
there," said Hao Peng, vice chairman of the autonomous region.
"It will also boost the transportation, construction and service
industries, paving the way for a major trade route connecting China
and South Asia to be reestablished," Hao added.
"The resumption of border trade is a great historic event, not
only for increasing business, but also for improving relations
between the two great countries," said Dr. Christy Fernandez,
additional secretary of the Indian Department of Commerce.
The resumption of border trade reflects the improved links
between China and India, said Professor Liu Jiangyong of the
Institute of International Studies at Tsinghua University.
He said China and India have been exploring ways of mutual and
beneficial cooperation in economic and trade fields. Professor Liu
added that the accord on the guidelines for border demarcation
signed in 2005 by the two countries has created a peaceful
Both sides have identified 2006 as the year of Sino-Indian
More than 5,000 border residents come to Yadong County, the
location of the Nathu La Pass, every year to trade, which is worth
3.6 million yuan (US$450,000), although the trading port in Yadong
did not officially open, statistics from the county show.
China and India signed a Memorandum of Understanding on the
resumption of border trade at the Nathu La Pass in 2004. The
Chinese State Council approved the plan on the construction of
border trade markets in Yadong in the following year.
"The reopening of the Nathu La Pass is a key move in
strengthening economic and trade ties, which will also enhance
mutual political trust," Prof. Liu said.
China and India recorded US$18.73 billion in trade volume in
2005, which is up 37.5 percent on the previous year, according to
the Chinese Ministry of Commerce. The volume is expected to exceed
US$20 billion this year.
Currently the majority of trade between the two countries is by
sea. Tibet imports and exports to India via Tianjin -- a port city
in the north, which is thousands of kilometers away.
Tibet is expected to benefit greatly from the resumption of
border trade at the Nathu La Pass, Hao said. "If only 10 percent of
Sino-Indian trade goes through the pass, it means at least more
than US$1 billion a year," he observed.
Last year Tibet's foreign trade volume was US$200 million.
Tibet has made rapid economic progress with the annual GDP
growth above 12 percent over the past five years, which is higher
than the country's average, the autonomous region's chairman, Qiangba Puncog, said on Saturday when
meeting the Indian commercial and trade delegation led by Christy
Qiangba said China and India's friendship has a long history and
the economic and trade cooperation between the two nations has been
close in recent years. He said the Chinese government attached
great importance to bilateral economic and trade cooperation.
With the reopening of the Nathu La Pass, iron ore and livestock
products from India and wool, herbs and electrical goods from China
can be transported using the short cut, Hao said.
Businessmen started to show interest in the area when China
approved the construction of border markets in Yadong in 2005.
Wang Ping, head of the Yadong county government, said more than
30 business people came to Yadong in the first quarter of this year
for investment talks while only two or three came during the same
period last year.
(Xinhua News Agency June 19, 2006)