Chinese Dragon laying eggs in Bangladesh’s nest?

Bangladesh is the fastest growing economy in the region and Chinese investments are fast transforming and empowering Bangladesh. Will this also change its regional relationships?


Aila. Bijli. Nargis. Rashmi. In Bangladesh, catastrophic cyclones have such fascinating and fearful feminine names. Sitting in the Ganges delta, the statelet is very prone to cyclone, earthquake, flood, riverbank erosion and other deadly disasters. Illiteracy, poverty, and famine blockaded her way towards prosperity. Political instability hammered her status quo. Million fled homeland. But none of these could stop Bangladesh from achieving her dreams. Each storm mauled and made her roots stronger.

A highly fertile arable land, rivers, suitable weather, hardworking people and of course the glittering garments industry as well as export-oriented policy -all together altered the fate of Bangladesh.

Bangladesh is Rising and Shining

The youngest SAARC state has leapfrogged all of her South Asian elders in terms of economic growth rate. Bangladesh is now not merely an economic model, but also a role model for many developing states. The economy grew 7.86 per cent in the financial year 2017-18. A steady, performing and prosperous state of 160 million people is now a lucrative market. The economic vibrancy is immensely appealing.

If there grows money, can China be far away? 

Bangladesh: Swirling in Sinophilia

People’s Republic of China was reluctant to establish diplomatic relation with Bangladesh initially. When Bangladesh sought UN admission, China vetoed. Later, a chilling winter day of 1976 aroused the warmth of Sino-Bangla bonhomie. The diplomatic relation was established. Much before, Sheikh Mujibur Rahman, founding father of Bangladesh and Chinese Premier Zhou Enlai exchanged visits, twice, in the 1950s and 60s.

Now, the Sino-Bangladesh relationship is moving in an upward trajectory. More Bangladeshi citizens are traveling to China. More and more Chinese are holidaying in Bangladesh’s tourist spots. Bangladeshis are tasting Chinese cuisines, learning their tongue Mandarin, tuning into Chinese channels. China is hunting Bangladeshi talents across sectors like medical, science, technology, social science. The numbers of Chinese fellowships for Bangladeshis are increased. Chinese investment is generating massive employment in Bangladesh.

Chinese made artillery pieces, small arms, T-59, T-62 and T-69 tanks are inducted by the Army. They also have Chinese origin Multi barrel Rocket launch (MBRL) system.

Some of her compatriots, credit former PM Khaleda Zia for today’s camaraderie with China. The BNP leader developed good rapport with then CCP leader Xi Jinping and assured that Bangladesh would always act in accordance with China’s One China Policy. The incumbent Awami League has inked several deals with China. Dhaka is a signatory of China’s Belt and Road Initiative. Bangladesh is the second largest recipient of Chinese investment in South Asia, just next to Pakistan. The total amount – including all aids, loans and assistance for infrastructure -is believed to be $38 billion.

When President Xi Jinping was on a two-day state visit in Bangladesh in 2016, China extended an economic assistance of $24 billion to Bangladesh for twenty-four projects. This was the first visit of a Chinese Premier - after three long and eventful decades. The significance of the Presidential visit was tremendous. Blossomed more businesses. Chinese corporations pumped more money into the Bangladeshi market through FDI. The FDI increased to $506 million in FY 2017-18 from $68.5 million in 2016-17.

Partners in Prosperity

Now China is the largest trading partner of Bangladesh. The two burgeoning economies are busy with business, accounting for bilateral trade of $12 billion. Both states gave Most Favoured Nation status to each other in 1984. Bangladesh is now importing most goods from China. The quantity and value of imports- both are increasing every year. On the other hand, Bangladesh has been exporting jute and jute goods, knitwear, flowers, frozen and live fish, crab, fruits, paper yarn, vegetables in huge quantities to China. A signatory of the Asia Pacific Trade Agreement, Bangladesh enjoys duty free access to China’s market for plenty of her export items.

Chinese enterprises are shifting their production houses from China to Bangladesh, Cambodia and Vietnam for lower tariff, wage and supply of labour. The minimum monthly wage in Bangladesh is still less than $95. Sino-American trade war has been a blessing for Dhaka. In the financial year 2018-19, exports from Bangladesh amounted to $40.53 billion. Out of this total figure, earning from apparel sales was $25.53 billion.

Over two hundred behemoths from China are into various commercial activities in Bangladesh. Another two hundred small and medium size Chinese enterprises have nested in Bangladesh. Chinese consortium Alibaba has acquired homegrown e-commerce platform daraz - while his sister Alipay has grabbed stakes in BKash, the digital payment giant of Bangladesh. Dhaka Stock Exchange has sold its 25 percent stake to Shenzhen Stock Exchange and Shanghai Stock Exchange.

Read more: China’s yuan sinks to weakest in 11 years amid trade tension

The Chinese are engineering what Bangladesh dreams about. In other words, China is the architect of modern and brand new Bangladesh. Bangladesh has shown a great interest in constructing the quadrilateral infrastructural and connectivity project Bangladesh-China-India-Myanmar Economic Corridor.

China Major Bridge Engineering Company was awarded the contract for a major road-rail BRI project across the Padma river. The $3.12 billion and 6.15 kilometer-long Padma Bridge project is completed. It will connect the capital Dhaka will with 21 districts. Transportation will take lesser time and the bridge has the ability to fill many gaps. Two Chinese corporations are given the contract for Payra seaport construction. China Communication and Construction Company is constructing a marvelous tunnel, under Karnaphuli River.

Empowering Bangladesh

Shortage of energy was a roadblock towards Bangladesh’s development. It’s no more.  Foreign economic assistance is being utilized to fulfill Bangladesh’s target of producing 24,000 megawatts of electricity by 2022. TBEA, a Chinese enterprise and Dhaka Power signed a power grid deal worth $1.6 billion. Sino-Bangladeshi joint ventures like Bangladesh-China Power Co Ltd are mushrooming in the power generation spectrum. Russia has pledged $12 billion financial and technical assistance to Bangladesh for the construction of her first nuclear plant at Rooppur in northwestern district Pabna.

The second nuclear power plant will be constructed in Barisal. Chinese companies showed tremendous interest and lobbied Bangladesh Atomic Energy Commission. Chinese corporations have also offered Bangladesh to set up gas power plants. China has created footmarks almost in every sectors. Chinese presence can be also seen in the digital connectivity space.

Arms Supplier to Strategic Partnership

From what Henry Kissinger called a bottomless basket, Bangladesh has become a tigress economy. As the economy rises, emerges national security threat. PM Hasina, who in last December secured a fourth term, survived several assassination attempts.

The defence budget of Bangladesh accounts for nearly 6 percent of the national budget. Over 160,000 personnel are employed in the military service of Bangladesh.

The country has outlined an ambitious plan for defense, called Forces Goal 2030. Modernization of the military is no more a fantasy for modern Bangladesh - when terror troops are spreading their tentacles. Dhaka is highly concerned. Their territory -places like South Chittagong is being used for smuggling Made in China arms and other terrorist activities.

Read more: Pakistan – Bangladesh diminishing hope for better ties?

Terrorist outfits have woven their networks in remote areas and borders. Those who sell arms illegally, share a kinship with the drug and flesh traders. Often, they even obtain political immunity. State agencies like Rapid Action Battalion and Border Guard Bangladesh have justified their roles in curbing crimes and criminals.

In the spring of 2016, a high-level Chinese delegation led by Defence Minister General Chang Wanquan embarked for Dhaka. Wanquan called on PM Hasina and expressed China’s intention to expand strategic relations with Bangladesh. The delegation met the heads of the Bangladesh army, navy and air force. Bangladeshi defense officials called China a ‘trustworthy strategic partner.’

Washington based thinktank Center for Global Development in their report says, Djibouti, Kyrgyzstan, Laos, the Maldives, Mongolia, Montenegro, Pakistan, and Tajikistan are at a high risk due to Chinese loans.

From the early 1980s, China has been supplying tanks to the Bangladesh Army. Bangladesh Army is equipped with various types of Chinese weaponry. Chinese made artillery pieces, small arms, T-59, T-62 and T-69 tanks are inducted by the Army. They also have Chinese origin Multi barrel Rocket launch (MBRL) system. China is training Bangladesh Army.

In recent years, Bangladesh has absorbed various Chinese defence exports, ranging from arms, equipment, tanks, frigates and fighter jet, making China the largest supplier of arms and military hardware. China offers loans as well as flexible payment service. Plus those military products are better and cheaper than other suppliers.

Bangladesh has bought a pair of Ming class (Type 035 G) diesel-electric submarines (BN Nabajatra and Joyajatra) for $203 million from China in 2016. In late 2015, Bangladesh took delivery of two Type C13B class corvettes (Shadhinota) from China. From 2011 and 2015, Bangladesh was the second-largest state to acquire Chinese arms, next to Pakistan.

Among the gems and jewels of Bangladesh Navy, there are Chinese origin Shanghai class gunboats, Hainan class sub-chasers, 053-H1 Jiangsu I Class frigates, Huang Feng class missile boats, Type 024 missile boats, Huchuan, and P 4 class torpedo boats.

Bangladesh Air Force too is welcoming superior technologies, systems and acquiring ultramodern aircrafts. In addition to Cox’s Bazar and Bangabandhu Airbase in Dhaka, Bangladesh is constructing a state-of-the-art airbase in Sylhet. Made in China F7, Q5 fighter aircrafts and PT 6 trainers are the assets of Bangladesh Air Force. In June of 2018, Bangladesh signed a contract for procuring 23 units of Hongdu K-8W training jets more from China. This K-8W is also used by Pakistan Air Force.

Raising Rohingya Issue

PM Hasina spent five days in China in July 2019. On the sidelines of the Summer World Economic Forum in Dalian, China assured PM Hasina of helping to resolve the Rohingya issue. Her government generously gave shelter to over 7,20,000 Rohingya refugees. China and Bangladesh governments are closely working to ensure safe and quick repatriation of the Rohingyas in Myanmar. Beijing also offered 2,500 tonnes of rice for the refugees. During PM’s recent visit, Bangladesh and China signed nine pacts worth $1.7 billion in the ares of loan agreements, cooperation on power generation, water resources, culture, and tourism.

China has won plaudits and hissing both for her futuristic dream project Belt and Road Initiative. Many berate, it’s a debt trap. Sri Lanka was compelled to lease her southern port of Hambantota to China for 99 years. The Maldives’ experience with China is horrible. Yameen government favoured China for constructions – which ultimately landed them in massive debt.

Read more: Bangladesh detains FIFA official for ‘defaming’ PM

India helped his successor President Solih to get out of that trap. Malaysia and Myanmar too discarded Chinese infrastructural projects. Washington based thinktank Center for Global Development in their report says, Djibouti, Kyrgyzstan, Laos, the Maldives, Mongolia, Montenegro, Pakistan, and Tajikistan are at a high risk due to Chinese loans. African states like Ghana and Sierra Leone now wary about China.

During the talks of Sonadia port construction, a cleavage developed between Dhaka and Beijing. Eco-conscious Bangladeshi citizens agitated over Chinese coal power plants. Dhaka has scaled back many Chinese projects and contemplated offers from India, Japan, Russia, and USA. With deft diplomacy, Bangladesh is handling China with extreme care.

Will the dragon lay eggs in magpie robin’s nest? 

Ayanangsha Maitra, a freelance journalist from India, tweets @Ayanangsha. Views in this article are author’s own and do not necessarily reflect GVS policy. The views expressed in this article are author’s own and do not reflect the editorial policy of Global Village Space.

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