China will provide 62.5 million rupees as military aid to Nepal, signalling Beijing's commitment to maintain close ties with the new Maoist regime.
An agreement to this effect was signed by Defence Minister Ram Bahadur Thapa "Badal" during his recent visit to China, the National News Agency (RSS) said.
Nepal in turn has assured not to let any activity directed against its communist neighbour from its soil.
The defence minister visited China to observe the military exercise "Warrior 2008" in Beijing.
Chinese Minister Liang appreciated Nepal government's one-China policy with regard to Tibet and Taiwan. Nepal's Maoist-led government had recently cracked down on Tibetans, who were demonstrating against China.
Thapa had also met Vice Chairman of the Central Military Commission, Guo Boxiong, the Chinese forces' highest body, according to officials here.
Besides military aid, China yesterday donated medicines worth USD 20,000 to the BP Koirala Memorial Medical Hospital in Chitawan district in central Nepal.
Chinese Ambassador to Nepal Xiangling handed over the medicines to the hospital, which was constructed with Chinese assistance around nine years ago.