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"The first is projects of Nepal connecting cities in Nepal, and the second is a cross border railway," she said.

Hou said Oli "raised the issue of building a cross-border railway between China and Nepal" for which he has got a "positive response from the Chinese side and the two sides have agreed to conduct feasibility study at an early date."

China has expanded its railways to Shigatse or Xigaze -- the seat of Panchan Lama in 2014 in Tibet. It is about 450 kilometres from Kyirong, 26 kilometres from Rasuwagadi in Nepal. China plans to extend its rail link to Kyirong by 2020.

Referring to the transit treaty which the Nepalese government hopes will end its dependence on India, Khanal said "the Transport Transit Agreement is a milestone for Nepal."

"Although many details will have to be worked out, the treaty will tremendously boost the confidence of Nepalese people," Khanal said.

So far, Nepal has conducted trade with third countries through the Indian port of Kolkata.

The Japanese agency report said that during Oli's February visit, India offered access to a second port, Visakhapatnam, in a move understood in Kathmandu as the southern neighbour's attempt to woo Nepal away from seeking sea access via Chinese territory.

Khanal said the preliminary understanding was that China would allow Nepal to use Guangzhou port in southern Guangdong province.

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