The Government of the People's Republic of China and the Government of the Kingdom of Nepal,

Being desirous of further developing the friendly relations between the two countries as good neighbours on the basis of the long-standing friendship between the two peoples,

Reaffirm that the five principles (Panch Shila ) of Mutual respect for each other's territorial integrity and sovereignty,

Non-aggression,

Non-interference in each other's internal affairs for any reasons of an economic, political or ideological character,

Equality and mutual benefit, and

Peaceful co-existence,

Should be the fundamental principles guiding the relations between the two countries.

The two Parties have resolved to conclude the present agreement in accordance with the above-mentioned principles and have for this purpose appointed as their respective plenipotentiaries:

The Government of the People's Republic of China, His Excellency Pan Txu-li, Ambassador Extraordinary and Plenipotentiary of the People's Republic of China to the Kingdom of Nepal: the Government of the Kingdom of Nepal, His Excellency Chuda Prasad Sharma, Minister for foreign Affairs of the Kingdom of Nepal, who, having examined each other's credentials and finding them in good and due form, have agreed upon the following:

ARTICLE 1

The High Contracting Parties declare that peace and friendship shall be maintained between the People's Republic of China and the Kingdom of Nepal.

ARTICLE 2

The High Contracting Parties hereby reaffirm their decision to mutually exchange diplomatic representatives on ambassadorial level.

ARTICLE 3

All treaties and documents which existed in the past between China and Nepal including those between the Tibet Region of China and Nepal are hereby abrogated.

ARTICLE 4

In order to maintain and develop the traditional contacts between the peoples of the Tibet region of China and Nepal the High Contracting Parties agree that the nationals of both Parties may trade, travel and make pilgrimage in those places in each other's territory as agreed upon by both Parties, and the two Parties agree to safeguard the proper interests of the nationals of the other Party in its territory in accordance with the laws of the country of residence, and for this purpose the High Contracting Parties agree to do as follows:

Paragraph I The High Contracting Parties mutually agree to establish Trade Agencies:

The Chinese Government agrees that the Government of Nepal may establish Trade Agencies at Shigatse, Kyerong and Nyalam;

The Government of Nepal agrees that the Chinese Government may establish an equal number of Trade Agencies in Nepal, the specific locations of which will be discussed and determined at a later date by both Parties;

The Trade Agencies of both Parties shall be accorded the same status and same treatment. The Trade Agents of both Parties shall enjoy freedom from arrest while exercising their functions, and shall enjoy in respect of themselves, their wives and their children who are dependent on them for livelihood freedom from search.

The Trade Agencies of both Parties shall enjoy the privileges and immunities for couriers, mail-bags and communications in code.

Paragraph ⅡThe High Contracting Parties agree that traders of both countries may trade at the following places:

The Chinese Government agrees to specify (1)Lhasa,(2)Shigatse,(3)Gyantse and (4)Yatung as markets for trade;

The Government of Nepal agrees that when with the development of Chinese trade in Nepal, it has become necessary to specify markets for trade in Nepal, the Government of Nepal will specify an equal number of markets for trade in Nepal;

Traders of both counties known to be customarily and specifically engaged in border trade between the Tibet Region of China and Nepal may continue trade at the traditional markets for such trade.

Paragraph Ⅲ The High Contracting Parties agree that pilgrimage by religious believers of either country to the other may continue according to religious custom. Personal baggages and articles used for pilgrimage carried by the pilgrims of either Party shall be exempted from taxation by the other Party.

Paragraph Ⅳ For travelling across the border between the Tibet Region of China and Nepal, the High Contracting Parties agree that the nationals of both countries shall use the customary routes.

Paragraph Ⅴ For travelling across the border by the nationals of the two countries, the High Contracting Parties agree to adopt the following provisions:

Diplomatic personnel and officials of the two countries and nationals of the two countries except those provided by Sub-paragraphs 2,3 and 4, who travel across the border between the Tibet Region of China and Nepal, shall hold passports issued by their respective countries and visaed by the other Party. Nationals of the two countries who enter the Tibet Region of China or Nepal through a third country shall also hold passports issued by their respective countries and visaed by the other Party.

Traders of the two countries known to be customarily and specifically engaged in trade between the Tibet Region of China and Nepal, their wives and children dependent on them for livelihood and their attendents, not covered by Sub-paragraph 3 of this Paragraph, who enter into the Tibet Region of China or Nepal as the case may be for the purposes of trade, shall hold passports issued by their respective countries and visaed by the other Party, or certificates issued by their respective Governments or by organs authorized by their respective Governments.

Inhabitants of the border districts of the two countries who cross the border to carry on petty trade, to visit friends or relatives, or for seasonal changes of residence, may do so as they have customarily done heretofore and need not hold passports, visas or other documents of certification.

Pilgrims of either Party who travel across the border between the Tibet Region of China and Nepal for the purposes of pilgrimage need not hold passports, visas or other documents of certification, but shall register at the border checkposts or the first authorized government office of the other Party, and obtain permits for pilgrimage therefrom.

Notwithstanding the provisions of the foregoing Sub-paragraphs of this Paragraph, either Government may refuse entry to any particular person.

Nationals of either country who enter the territory of the other Party in accordance with the foregoing Sub-paragraphs of this Paragraph may stay within the territory only after complying with the procedures specified by the other Party.

ARTICLE 5

This Agreement shall be ratified. It shall come into effect after mutual notice of ratifications,

and remain in force for eight (8) years. Extension of the present Agreement may be negotiated by the two Parties if either Party requests for it six (6) months prior to the expiry of the Agreement and the request is agreed to by the other Party.

Done in Kathmandu on the 20th day of September, 1956, in duplicate in the Chinese,

Nepalese and English languages, all texts being equally authentic.



(Signed) (Signed)

Pan Tzu-li Chuda Prasad Sharma

Plenipotentiary of the Plenipotentiary of the

Government of the People's Government of the

Republic of China Kingdom of Nepal