Premier Li Keqiang and Nepal's Prime Minister K.P. Sharma Oli (second left) witness the signing of documents after their meeting at the Great Hall of the People in Beijing on Monday. Feng Yongbin / China Daily

China will start a feasibility study on free trade with Nepal and consider extending a rail link to its mountainous neighbor, Premier Li Keqiang said on Monday.

Li and Nepal's Prime Minister K.P. Sharma Oli witnessed the signing of an agreement to start the free trade study and nine other documents after their meeting at the Great Hall of the People in Beijing.

The agreements include a concessional loan for a new airport in Pokhara, Nepal, a tourist destination.

The two premiers also discussed establishing cross-border economic cooperation zones, and agreed that China will facilitate cross-border transit links to landlocked Nepal.

Li suggested expanding cooperation on reconstruction after the devastating earthquake that hit Nepal in April last year.

Oli told Li that his country upholds the one-China policy and will not allow any forces to conduct activities in Nepal that hamper China's interests.

He also thanked China for its prompt assistance after the earthquake, adding that Nepal will take part in China's Belt and Road Initiative and expects to benefit from China's development.

President Xi Jinping told Oli during their meeting later on Monday that China expects to forge a "community of common destiny" with Nepal.

"The stability and development of Nepal is in line with the common interests of China and India," Xi said, adding that Beijing is willing to discuss trilateral cooperation with Katmandu and New Delhi.

He also said China expects to carry out long-term energy cooperation with Nepal and is willing to give necessary policy support.

Hou Yanqi, deputy director of the Department of Asian Affairs at the Foreign Ministry, said, "This is a historic visit."

The visit is the first to China by a government head from Nepal in seven years. In September, the Himalayan nation adopted its first post-monarchy constitution after years of conflict.

Hou also said China was already planning to extend a rail line from Xigaze in the Tibet autonomous region to Gyirong on the border with Nepal.

"I believe that in the long term China and Nepal will be linked by rail," she said.

Mahesh Kumar Maskey, Nepal's ambassador to China, said the Belt and Road Initiative will help to realize connectivity across the Trans Himalaya Economic Corridor, adding that Nepal is eager to be linked to China by rail.

He said Nepal's economy would benefit greatly if the country could attract one-tenth of the 23 million tourists expected to visit Tibet this year.

During Oli's weeklong trip to China - his first since he took office in October - he will also attend the Boao Forum in Hainan province and visit Xi'an in Shaanxi province and Chengdu in Sichuan province.