For centuries, merchants from Tibet, Nepal and India braved the Himalayan passes to do business. Many set out and never reached their destinations while others made fortunes from the arduous trek. The benefits of trade trickled into the medieval economy and made it rich.

Nepal now appears to be gearing up to go up that path again, by building new highways to the Tibetan border. Chinese Prime Minister Zhu Rongji gave the final nod to a 22 km road that would link Rasuagadi on the Tibetan border to Syabrubesi, which already has a 132 km road to Kathmandu. Nepali engineers say China would have to build another 26 km stretch in Tibet to connect Nepal with its western road network. "We think that road will come alongside the stretch in Nepal," says a senior engineer at the Department of Roads. Nepal already has a 113 km road linking Kathmandu with Kodari.

The new road would not just provide Nepalis an alternative trade route to Tibet, but will also serve as a critical second link between two of the world's largest emerging markets-China and India. More so, after Nepal completes another 18-20 km stretch linking Trisuli with the Prithvi Highway at Galchi in Dhading district. Upon completion, this would be the shortest link from the Tibetan border and Birgunj on the Nepal-India border.

Nepal and Tibet have 21 traditional trading points along the border, with formal agreements with China to use three. Trade also takes place through a fourth border post. Inside Tibet, China is building a Beijing to Lhasa (3,900 km) railway which, in addition to a new brand new highway, could open new markets in the mainland.