China rigorously investing in Nepal's tourism industry 'illegally': Report

China has been involved in illegal investments in neighbouring Nepal's tourism and infrastructure, Khabar Hub reported. This comes despite the Himalayan nation being heavily impacted by the COVID-19 pandemic. Chinese investors have been attracted to Kathmandu's lucrative hotel and tourism sector, and have been involved in several construction projects that cast doubt about Beijing's intentions.

"Chinese businessmen have invested in more than 400 hotels and restaurants in tourist hubs including Kathmandu, Lalitpur, Bhaktapur, Kaski, and Chitwan," the new report published by Khabar Hub read, according to ANI. 

Chinese conduct business in Nepal 'without paying taxes'

Beijing's investors and traders have spent on more than 50 restaurants and other businesses in Pokhara, as well as many other cities of Nepal."Chinese trend of doing business in Nepal without paying taxes to the government and making payments through an online system by booking the desired rooms has added to the problems of the tourism industry," Hotel Association of Nepal (HAN) officials were cited as saying in their complaint.

China has been rigorously expanding its footprint in the country, and Nepal's ruling party has gotten wary of China's ambitious Belt and Road Initiative that has mounted more worries as Sri Lanka's economy and financial framework completely collapsed. The two countries Nepal and China had earlier signed a Memorandum of Understanding (MoU) on the BRI back in May 2017 under then-Prime Minister Pushpa Kamal Dahal.

Hoping that the agreement would attract foreign investment in the country, Nepal hailed the Beijing-Kathmandu framework. Under the infrastructure cooperation, a trans-Himalayan railway that ran from the Chinese port of entry of Jilong/Keyrung to Kathmandu was constructed. China also established a 400 KV electricity transmission line and set up a technical university in Nepal. Since then it had also rigorously invested in roads, tunnels and hydroelectricity dams and the tourism sector. Nepalese government however has had some concerns with China with regards to the PRC's financial transparency. The country prefers soft loans from China instead of commercial ones in China-led Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund (SRF). The recent economic crisis in Sri Lanka and failure to repay the debt have also made Nepal cautious in its financial dealings with Beijing.