Nepal and China signed a Memorandum of Understanding (MoU) Thursday in Kathmandu to promote their economic and trade ties, according to a Nepali official.

"After the bilateral meeting, both sides approved to host a trade fair by Nepal in Lhasa of China's Tibet Autonomous Region in September 2005," Mahendra Prashad Upadhaya, joint secretary of the Ministry of Industry, Commerce and Supply, told reporters.

Upadhaya and Gao Shangde, deputy director general of Tibet Commerce Department from the Chinese side, signed the MoU, he said.

Bilateral promotion on trade and investment, physical infrastructure development at border customs point, road improvement, customs management, special economic zone, export promotion area were discussed in the meeting, he revealed.

At the concluding ceremony of the meeting, Gao, leader of the Chinese delegation, said the trade fair to be organized by Nepal in Lhasa will help extend the bilateral trade and promote Nepali products in China's Tibet.