Zhangmu, also known as Khasa, lies on a mountainside 10km (6 miles) inland from the Friendship Bridge that spans the Bhotekoshi (the Sun Koshi) River. This small town has become a major trading post between Tibet and Nepal. The subtropical climate endows the small town with warm, humid weather and beautiful scenery throughout the year.
The town is built along a winding road that is lined with private homes, shops, restaurants and government buildings.
The booming border trade attracts merchants from inland China, Tibet and Nepal. Nepalese merchants export rice, flour, pepper, vegetables and perfumes while Chinese merchants sell wool, tea, salt and Tibetan medicine. There are also restaurants run by the Nepalese serving traditional dishes, instant noodles and beer produced in Nepal.A free trade market formed spontaneously near the Friendship Bridge about 8 years ago, which is still developing today.
According to an agreement between the Chinese and Nepalese governments, people living within 30 kilometres (18 miles) of the border may cross the border freely. Every day, hundreds of Chinese and Nepalese merchants conduct business under this agreement. Local Sherpas lease their houses to the merchants thus sharing in the profit of the border trade. Zhangmu is going to undergo major construction to meet the demands of the booming tourism and border trade.