Visiting Nepali Deputy Prime Minister KP Sharma Oli on Wednesday hailed China's plan to extend Tibetan railway to Nepalese border, saying it will greatly facilitate bilateral trade, tourism and people-to-people contacts.

"We welcome China's plan to extend the new railway to China-Nepal border. There are several reasons behind this," Oli, who is also Nepali Foreign Minister, said in an exclusive interview with Xinhua.

Qiangba Puncog, chairman of the government of the Tibet Autonomous Region, said on Sunday that China's newly-built railway to Tibet will be extended to the border between China and Nepal.

According to current plans, a branch line will be built next year from Lhasa to Xigaze, the region's second largest city located at an altitude of about 3,800 meters and some 270 kilometers from Lhasa. The project is expected to take three years.

Currently, land transportation between Tibet and neighboring Nepal and India is not easy. Nyalam located in Xigaze is the only border crossing that boasts a highway.

"The extension of railway line up to Nepal-China border will greatly facilitate bilateral trade, tourism and promote people-to-people contacts thereby further solidifying the foundation of bilateral relations," Oli said.

The availability of direct railway services will make our trade less expensive, competitive and reliable, he said.

Oli said that Nepal has a long history of political, economic and cultural exchange with Tibet Autonomous Region of China.

"Though we share more than 1,400 kilometers of border, we have never encountered any border related problems," he said. "Nepal conducts its trade with China mainly from Tibet."

Oli disclosed that Nepal was planning to establish a Special Economic Zone in Panchkhal, Kabhre District that is about 60 kilometers away from Nepal-China border.

"With this railway facility, the Nepalese products manufactured in that zone will have greater access to the Chinese markets in addition to the traditional market in Tibet," he said.

On bilateral relations, Oli said that Nepal-China relations have stood the test of time and have always been cordial, friendly and cooperative.

"There is no problem in bilateral relations," he said. "I believe that China's phenomenal economic development will have a positive bearing on the process of our economic development."

As a close friend, Nepal sincerely expects increased flow of tourists and investment from China as well as greater market access to its products, he said.

Oli labeled his ongoing China visit as "the first high-level contact between Nepal and China after the restoration of democracy in Nepal."

He hailed the visit as "successful", saying his exchange of views with senior Chinese leaders have proved extremely useful in further cementing the age-old ties between the two countries and peoples.

Oli is paying an official visit to China from Aug. 26 to September 2 at the invitation of Chinese Foreign Minister Li Zhaoxing.

Apart from Beijing, Oli's other stops include Lhasa, capital of southwest China's Tibet Autonomous Region, Chengdu in southwest Sichuan Province and Shenzhen, an economic hub in south China.

(Xinhua News Agency August 31, 2006)