Study of Potential Impacts of Cross-Border Infrastructure on Urban and Tourism Development in Nepal under China‘s Belt and Road Initiative

Department: Urban Planning and Design

Principal Investigator: Dr. Chan, Roger Chun Kwong

Funding: OBORobs, HKUrbanLabs, Faculty of Architecture, HKU


With the introduction of China’s One Belt and One Road Initiative (OBOR), more than 65 countries including Nepal are agreed to participate in the development initiatives with China. Government of Nepal has agreed and committed to develop its connectivity with China through the development of Cross-border infrastructure such as Road and Rail. It is assumed that increased connectivity will bring dynamism in urban, regional and national development whereby tourism is one of the major agents to boost national economy through enhanced infrastructure. Undoubtedly, improved connectivity would promote commercial activities, land transaction, tourism and local development; however it may also affect the local environment and heritage resources adversely if not planned in a proper way. In this regard, this research aims to explore potential impacts of development of cross-border infrastructure on urban and tourism development along the Nepal-China Friendship (Araniko) Highway. This study adopts case study as a research approach and employs multiple tools of data collection such as questionnaire survey with residents, tourism entrepreneurs; interview with key informants; and participant observation. Findings reveal that with appropriate planning of cross-border infrastructure, there exists numerous benefits of increased accessibility to urban and tourism development. Settlements along Nepal-China highway such as Dhulikhel, Banepa and Kathmandu seem to experience dynamism in terms of urban, tourism and community development. It suggests need of greater cooperation; collaboration; and innovative policies on transportation, land use and tourism development to maximize local benefits and promote sustainable development in the towns.


  • To explore the key planning issues and potential impacts of crossborder infrastructure on Urban and Tourism development in the towns of Dhulikhel and Banepa along the Nepal-China Highway under China’s One Belt One Road Initiatives.
  • To summarize key findings and provide implication of the study to promote sustainable tourism and urban development in Nepal.

Key Outcome:

  • This study identifies the relationship and impacts of cross-border infrastructure specifically Rail and Road on the urban and tourism development in the town of Dhulikhel and Banepa along Nepal-China Friendship Highway.
  • With increase in connectivity with China under OBOR initiative, towns along the Highway (Dhulikhel and Banepa) seem to exhibit dynamism in terms of land transaction, development of tourism services, housing and entrepreneurial activities.
  • Increase in mobility in urban core and in the major nodal points enables interactions with economic entities. It seems that spaces around stations, and peripheral areas would be most affected by the improvement in connectivity through Rail and Road. The areas along highway would also experience rapid transformation. The large scale infrastructure project will bring changes to land transaction, land prices and land use along the Highway.
  • As China is one of the major tourist market for Nepal, increase in accessibility through Rail and Road would attracts large number of tourists from China inducing numerous impacts on local economy, environment, cultural heritage and urban development.
  • Findings reveal that the potential benefits as induced by development of transportation linkage with China include increase in employment, income and local economic activities; better recognition of local arts, crafts, heritage and identity; and increase in local agricultural products. On the contrary, displacement of local industries and local products could also be seen in the urban areas if the proposed project fails to integrate policies of heritage conservation with transportation policies. Increase in tourism would also bring changes in the habits, attitudes, and perception of local people towards local culture and their heritage.
  • The government is the key stakeholder to propose, coordinate and implement the project and relevant policies. Bilateral relations and agreements are necessary to proceed the work. It seems that Central government should play proactive role to implement it, while local level agencies such as municipality should work together with local communities, NGOs and INGOs to prepare local development plan in relation to the OBOR initiatives. To facilitate better urban development vis-à-vis tourism and conservation, there has to be innovative policies on spatial planning and urban land use with specific emphasis on promotion of sustainable tourism and community development.
Enlarge Photo: Study of Potential Impacts of Cross-Border Infrastructure on Urban and Tourism Development in Nepal under China‘s Belt and Road Initiative 1Enlarge Photo: Photo 1: Nepal China Friendship Highway (Photo taken at Dhulikhel by Bhatta,2017)Enlarge Photo: Photo 2: Traditional Urban Core of Dhulikhel (Bhatta,2017)Enlarge Photo: Photo 3: Dhulikhel Bazzar (Bhatta, 2017)