BANGLADESH celebrated forty years of relations with China in 2015 and formally declared its joining in China’s ‘One Belt, One Road’ (OBOR) initiative during the visit of China’s President Xi Jinping in 2016.
During Xi’s visit, the two governments signed 27 agreements involving $US24.45 billion in assistance and investment for Bangladesh. Moreover, 13 Chinese corporations signed joint venture agreements worth $13 billion with Bangladeshi companies.
Jiang Jingkui, director of the Centre of South Asian Studies at Beijing University, told the China Daily that “the South Asia region, which was not China’s traditional focus, has become more important in recent years especially after China put forward the Belt and Road Initiative in 2013.” The initiative involves massive Chinese spending on infrastructure to more closely link Africa and the Eurasian landmass.
Beijing is well aware that Washington is seeking to harness India as a frontline state in its war preparations against China. The Obama administration has encouraged New Delhi to build its regional influence, including Bangladesh, Sri Lanka, Nepal and Afghanistan, at China’s expense
President Xi’s visit to Bangladesh was marked by local media as the start of a “new era of friendship.” As China is one of the biggest development partners of Bangladesh, it was expected that the bilateral partnership would grow in all areas of cooperation.
China’s economic growth has made it a strong economic force in driving global trade. As its trading partner, Bangladesh expects from China, principally, increasing amounts of Chinese direct investment, better access for Bangladeshi products in China’s market and China’s continuing support in developing the infrastructure of the country.
Currently, China has been providing project loans and development assistance and wishes to increase investment in the information and communication technology industry, river management, industrial zones, land reclamation and maritime cooperation. As part of the Bangkok Agreement, China provides Bangladesh duty free access to a list of Bangladeshi products. It is expected that bilateral trade between China and Bangladesh may exceed US$30 billion by 2021.
Given the reality, it is now urgent for Bangladesh to build a secure relationship with India and China on the basis of mutual respect, trust and friendship. Since China’s OBOR initiative fits into Bangladesh’s goals of connectivity and increased trade, Bangladesh now needs to make all efforts to ensure good governance and political stability so that it can achieve the aims and expectations of OBOR, which could have a great impact on the long term future of the economy of Bangladesh.
projects to be signed during Xi’s visit, the cost of Dhaka-Sylhet four-lane highway is estimated at $1.6 billion, Padma Bridge rail link project at $3.3 billion, Dhaka-Chittagong railway project at $3.03 billion, Dhaka-Ashulia elevated expressway at $1.39 billion, Sitakunda-Cox’s Bazar marine drive expressway and coastal protection project at $2.85 billion, and Development of National ICT Infra-Network for Bangladesh Government (Phase III) at around $1 billion.
China wishes to build mega infrastructure projects within the Belt and Road areas to increase trade and service, offering substantial prospects for Bangladesh. This initiative meets Bangladesh’s need for wider connectivity within the region. While Asia is currently experiencing increasing economic development centering on China, if the OBOR is fully implemented, Asia will become the center of gravity for the world economy.
Bangladesh has already expressed interest in actively participating in the OBOR and, as a part of the initiative, the BCIM (Bangladesh, China, India and Myanmar) corridor is now in its final stage. As both Bangladesh and China believe in regional cooperation and have common interest in the corridor, this offers additional impetus. China has been increasingly developing its cooperation with South Asian nations. In this context, Bangladesh should pay more attention to its Look East policy to activate the connectivity further and thus increase bilateral trade. While Chinese investors have interests in Bangladesh’s garment industry due to the availability of cheap labor, the Chittagong and Mongla ports are also of great interests for China to develop connectivity for its Southern gateway.
The global economy is increasingly shifting its gravity from West to East and the role of the two Asian economies — i.e. China and India — are therefore gaining wider scope to work for regional integration.
India is in the BCIM initiative which is in line with the Chinese OBOR initiative. Since India needs to engage in its efforts in developing regional integration, Bangladesh, India, Nepal, and Myanmar along with China can therefore play wider and more sincere roles to access opportunities in the region by resolving the issues of mutual mistrust.
In addition, the cost of expansion and strengthening of power system network of Dhaka Power Distribution Company Ltd under the Power Division is estimated at $2.04 billion, and the construction of Karnaphuli tunnel in Chittagong at $703 million.
The visit of Chinese President Xi Jinping yielded the signing of 27 deals, where Bangladesh will receive $24.45 billion in assistance from China.
Thirteen Bangladeshi entities also signed 13 joint venture agreements with the same number of Chinese companies involving $13.6 billion, to boost trade between the two nations.
Terming the deals a turning point for Bangladesh, they suggested the government be sincere and skilled in negotiations for execution of the deals, so that both Bangladesh and China become winners.
“The signing of the agreements indicates a positive Bangladesh. The world now sees Bangladesh as the next rising tiger,” said Abdul Matlub Ahmad, president of the Federation of Bangladesh Chambers of Commerce and Industry.
The Chinese government and private sector investors understand that Bangladesh is a lucrative place for investment, as the country has been witnessing more than 6 percent year-on-year economic growth for several years now, Ahmad said.
“The agreements are historic as Bangladesh has never seen such big investments and trade deals, worth nearly $40 billion. It has become possible due to continuous road-shows by the private sector and the government’s continued efforts.”