"Nepal needs an environment of trust for the government and rebels to negotiate. I have noticed the government has paid special attention in this direction. As a close neighbour, China has been closely watching the internal developments in Nepal."

Responding to a question on the US military presence in Nepal for training activities, the Chinese envoy smiled and said it was up to Nepal. "It's good to exchange one's experiences but the movement of huge troops is not considered good in the international arena," he said.

The ambassador also said King Gyanendra's recent visit to China had added new dimensions in bilateral relations. During the talks, he repeatedly insisted that Nepali rebels who were indulging in violence were not true Maoists. "There is no relationship at all between their activities and Mao thought," he declared.