Nepal's agreements with China would also allow Chinese companies to begin stretching the Tibetan railway to Kerung, the last Chinese outpost before reaching the Nepali border.

Beijing had earlier announced plans to build this line by 2020, in the hope the Nepali government would agree to a transit and cross-border deal. The deal took place in late March as Oli visited Beijing, and met Chinese President Xi Jinping and Premier Li Keqiang.
 
For China, this is an opportunity to extend its One Belt, One Road plan. At present, the plan's main showcase project is the China Pakistan Economic Corridor, which involves building a long stretch of road that will start at Kashgar city in China’s Xinjiang province, pass through the Karakoram Highway and across Pakistan to reach the Gwadar port on the Arabian Sea.

Beijing has promised to invest $46 billion in the corridor project, and work has started despite some initial difficulties.

Nepal has also asked China to build a railway network within the country to link three of its major cities: the capital Kathmandu, Pokhara and Lalitpur. China has eagerly agreed to the proposal, and ordered its engineers to launch a pre-feasibility study.
 
But there are serious questions about whether the risks and high cost of building railway track over mountainous terrain, which are full of fault zones, would be justified in areas like Tibet and Nepal where people have very little purchasing power.
 
“It will not make economic sense if you are thinking of immediate returns. But if you look at the long-term goal of opening up a new route that will connect several countries, and develop several industries including tourism, it is a worthwhile project,” said Hu Shisheng, director of the Institute of South and Southeast Asian and Oceanian Studies at the China Institutes of Contemporary International Relations.
 
Once built, China wants to stretch the cross-border railway with Nepal to Lumbini, the birthplace of Buddha on the Nepal-India border, and connect it with Indian Railways lines. India's rail operation now is in the process of building rail links with Bangladesh and Myanmar under a program announced by Indian Prime Minister Narendra Modi.
 
China and Nepal also agreed to study the feasibility of projects that include construction of a transmission line between the countries and the Upper Arun Hydropower project now under way.
 
The Nepal project is in addition to a proposal for a 1,600-km-long railway line connecting the Tibetan capital of Lasha with Chengdu in Sichuan province, which Chinese engineers describe as extremely difficult to build.
 
The Tibet-Sichuan railway will cross the major rivers Minjiang, Jinshajiang and Yarlung Zangbo. Nearly, 1,000 km of it will pass through Tibet, presenting several challenges that include avalanches, landslides, earthquakes, terrestrial heat, karst caves and underground streams.
 
"The accumulated height it will climb reaches more than 14,000 meters, and it will cross many fault zones," Lin Shijin, a senior civil engineer at China Railway Corp. recently told the local media.. "It's like the largest rollercoaster in the world. With a designed service life of 100 years, it is believed to be one of the most difficult railway projects to build on Earth."

China state media also quoted Zhao Jinxue, a rail construction risk appraiser with an insurance company in Chengdu, that "It will cost at least 100 million yuan ($15.87 million) per kilometer. The cost on the Nepal project is expected to be similar or higher because the mountain terrain is more steep and challenging than the one leading from Tibet to Sichuan.
 
At one stage, Chinese officials suggested tunneling the Himalayas to reach the Nepal border instead of going through the high cost and trouble of laying rail track through the mountain ranges. But this resulted in sharp criticism and worries from environmentalists about the fragile nature of the Himalayas.
 
Chinese foreign ministry has clarified that the cross-border railway with Nepal was still at a proposal stage, and even a feasibility study has not yet been done.
But analysts cite the success of Chinese railway engineers in building the Tibet railway, and say that they are capable of taking up bigger challenges.

For China, an equally daunting task would be to persuade India to join the project. Beijing’s main objective is to connect with the vast market in India, without which it will not make business sense to sink massive sums of money connecting to Nepal and building railways there, said Pramod Jaiswal, senior research officer at the Institute of Peace and Conflict Studies in New Delhi.

Among other deals, China has agreed to build petroleum storage facilities in Nepal, which is dependent on India for its energy needs, and to finance construction of the Pokhara airport.