Economy, trade to be in focus
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for Bangladesh, but it will not be easy,” said Sk Tawfique M Haque, director of the South Asian Institute of Policy Governance at North South University.
China is Bangladesh’s largest trading partner, with bilateral trade between the two nations exceeding $25 billion. However, exports from Bangladesh account for less than 3 percent of the sum.
Narrowing the trade gap will be a major focus of this trip.
“We would explore all ways of minimising this gap,” Foreign Minister Hasan Mahmud told reporters on July 7.
The two countries are expected to sign 20-22 memoranda of understanding (MoUs) in the areas of trade and investment, digital economy, banking, infrastructure development, disaster management, agriculture and people-to-people connectivity. Yesterday, as many as 18 MoUs were signed.
However, hopes of getting a $5 billion loan in yuan were dashed after Dhaka and Beijing failed to agree on the terms and conditions of interest and grace period of the loan, officials said.
“China will not provide the loan without conditions. Even if they provide the loan and other assistance, it will be a way for China to keep Bangladesh on its fold,” said Tawfique, dean of NSU’s School of Humanities and Social Sciences.
The Western powers will not be happy if such a currency swap happens between Bangladesh and China because this will be part of the de-dollarisation movement that China and Russia really want, especially after the Ukraine war, he added.
Bangladesh will seek Chinese support for the Southern Integrated Development Initiative (SIDI) centring the Payra Port in Patuakhali, Mahmud said.
Japan is supporting the Moheshkhali-Matarbari Integrated Infrastructure Development Initiative (MIDI) and the BIG-B Initiative (The Bay of Bengal Industrial Growth Belt). “Similarly, Dhaka wants Beijing to support SIDI,” said a foreign ministry official informed with the proceedings.
On July 4, Chinese foreign ministry spokesperson Mao Ning said China stands ready to work with Bangladesh to carry forward the spirit of the Five Principles of Peaceful Coexistence.
China wants to “deepen political mutual trust, further synergise development strategies, advance high-quality Belt and Road (BRI) cooperation, speed up implementing the Global Development Initiative (GDI), the Global Security Initiative (GSI) and the Global Civilisation Initiative, and elevate the bilateral relations to a new level”, she said.
Bangladesh joined China’s flagship Belt and Road Initiative when Xi Jinping visited Dhaka in 2016. Beijing wants Dhaka to join GDI and GSI too. However, Bangladesh is taking time before arriving at a decision.
Recently, there has also been a debate surrounding the Teesta project.
Following a proposal from Bangladesh, China showed interest in funding a part of the $1 billion project in 2021. But the project saw no progress.
India, meanwhile, showed interest, and Hasan Mahmud said Dhaka would consider India’s proposal first as it is a common river between the two countries.
China also wants to improve its political relationship with the Awami League and a delegation will be visiting China for signing an MoU in the days to come.
The objective of improving political relationships is to better implement the Chinese agenda in Bangladesh, said Imtiaz Ahmed, executive director of the Centre for Alternatives.
“China will work with whichever political party is in power. This is the Chinese approach. If the party in power [in Bangladesh] is strong in safeguarding national interest, there is no problem at all,” Imtiaz said.
There is a competition between China and India over Mongla Port in Bagerhat, and it may be an issue in the coming days, according to people with knowledge of the talks.
“Bangladesh remains on the back foot because of its governance challenges. Therefore, the balancing act has become difficult for Bangladesh. We, therefore, should improve our financial governance and political consensus on foreign affairs before we fall into further trouble,” Tawfique of NSU said.