| This research makes the assessment of China-Nepal economic relation.The objective of the study is to identify the historical trends of economic relation,factors influencing the bilateral cooperation,types and nature of institutions which have laid foundations for friendly relation between China and Nepal since ancient times.It also aims to investigate the effects of China’s economic assistance in Nepal’s economic development and estimates the interaction of the macroeconomic variables of both economies.It recommends some reform measures to strengthen and improve the existing economic cooperation to promote mutual interest.This study has applied econometric analysis based on ordinary least square regression model in order to show the impacts of China’s official development assistance,foreign direct investment and trade to the economic development of Nepal.For regression purpose,the selected macroeconomic variables of Nepalese economy are supposed to be dependent variables.China’s official development assistance,foreign direct investment from China,trade volume and income from tourist flow to Nepal are independent variables’The econometric analysis shows the interaction of these variables.The results of empirical analysis have indicated that the role of financial assistance provided by China is very significant in the socioeconomic development of Nepal.The results indicate that Nepalese economy is gradually integrating to Chinese economy through various channels like official development assistance,trade,foreign direct investment,tourist flow and trade.Critical discourse analysis has been applied for qualitative aspects of the study.The bilateral agreements related to political,economic,diplomatic,social and cultural interest have been analyzed to explore the factors of influencing the bilateral cooperation between two countries.Various institutions,mechanisms and channels of bilateral economic relations have been explored through this approach.The results have shown that China-Nepal economic relation is dominated by government level interactions than the market mechanisms due to poor connectivity. |
