- Multi-sectoral initiative focusing on transport, communications, ICT, ports, power, energy, SEZs, and logistics hubs.
- Anticipated cooperation in infrastructure, trade, finance, digital economy, education, media, and southern region development.
- Focus on boosting commerce, trade, and investment in Bangladesh’s southern region.
Bangladesh and China are set to embark on a new phase of development cooperation. Prime Minister Sheikh Hasina will visit Beijing from July 8-11, with plans to finalize agreements on at least 12 major projects. This visit is anticipated to open a new chapter in their development partnership.
The foundation for these agreements was established during a consultation meeting in Beijing, where officials from both nations carefully prepared the project list to be announced during the visit.
Upcoming Visit and Future Cooperation
Prime Minister Sheikh Hasina’s upcoming visit to China is expected to yield significant outcomes. The ambassador anticipates the signing of multiple ‘cooperation documents’ and joint announcements of major achievements. While specifics were not disclosed, discussions between the two countries are set to focus on a wide range of areas. These include infrastructure, trade, the financial sector, the digital economy, education, media cooperation, and the development of Bangladesh’s southern region. This comprehensive approach to bilateral cooperation indicates a deepening of ties between Bangladesh and China, potentially opening new avenues for economic and developmental partnerships in the future.
Comprehensive List of Potential Projects
The list of potential projects spans various sectors, demonstrating the breadth and depth of the Bangladesh-China partnership:
- Southern Integrated Development Initiatives (SIDI)
- Construction of China-Bangladesh Friendship Bridge on Kocha River in Pirojpur District
- Construction of Bhanga-Barishal-Kuakata road
- Establishment of Special Economic Zone
- Renovation of Dhaka Medical College and Hospital
- Construction of Maheshkhali/Matarbari-Bakhrabad 3rd Parallel Gas Transmission Pipeline
- Construction of Sewage Treatment Plant in Mirpur
- Metro Rail Dhaka Mass Rapid Transit Development Project Line-2
- Renovation of Bangabandhu International Convention Centre (BICC)
- Construction of High-Tech Bridge on Rural Local Government Roads
- Construction of the Sewage Collection System under Dasherkandi STP Catchment of Dhaka City
- Procurement of 04 New Vessels
These projects cover crucial areas such as infrastructure development, healthcare, urban planning, transportation, and economic growth, showcasing a holistic approach to development cooperation.
Financial Cooperation and Teesta Project Dynamics
Recently, the Chinese ambassador to Bangladesh, Yao Wen, has hinted at Beijing’s willingness to consider Bangladesh’s proposal for budget support. This support could potentially ease pressure on Bangladesh’s foreign reserves. Bangladesh has sought approximately $5 billion from China in budget support, in addition to loans for various mega projects. The ambassador expressed openness to new proposals from Bangladesh, stating, ‘We are still in discussion. Whatever China can do, we will do as per Bangladesh’s request.’ This potential financial assistance underscores China’s commitment to supporting Bangladesh’s economic growth and stability.
Regarding the Teesta restoration and management project, Ambassador Yao Wen clarified China’s position. He stated that while China is open to working with India on the project, the ultimate decision lies with Bangladesh. The ambassador emphasized, ‘The Teesta River is within the territory of Bangladesh. So, it is your river. Any project regarding the Teesta River is for Bangladesh to decide upon. That decision must be respected by all of us.’
This statement respects Bangladesh’s sovereignty and highlights the diplomatic approach China is taking in regional water management issues. The ambassador also mentioned that China had submitted a proposal for the Teesta project following a request from Bangladesh and is awaiting a response.
However, in 2020, Bangladesh took a significant step towards addressing its water management challenges by initiating a major infrastructure project along the Teesta River. The country’s water resources ministry formally approached the Economic Relations Division with a request for a substantial loan from China, amounting to $983.27 million.
The Teesta River project presents a substantial opportunity for Bangladesh, promising solutions to water management and agricultural challenges through initiatives aimed at stabilizing river flow, mitigating floods, and enhancing irrigation capabilities in the region.
Historical Economic Relations
China is one of Bangladesh’s major trade partners, but Bangladesh has historically faced large trade deficits due to low export volumes. The two countries have agreed to convert the proposed FTA into a CEPA and will start negotiations this year.
The centerpiece of the potential agreements is the Southern Integrated Development Initiatives (SIDI), a comprehensive effort involving multiple sectors such as transport, communications, ICT, ports development, power and energy, and logistics hubs.
The SIDI initiative is the first of its kind among bilateral partners and has significant implications for enhancing commerce, trade, and investment. For more than a decade, China has held its position as one of Bangladesh’s most significant trading partners. The trade relationship between the two nations is substantial, with China exporting $26.8 billion worth of goods to Bangladesh in 2022, while Bangladesh’s exports to China reached $952 million. Key exports from Bangladesh to China, including jute, leather, and garments, play a crucial role in strengthening the economic ties between the two countries.
To modernize their economic relationship, which is currently based on the 1996 Agreement on the Encouragement and Reciprocal Protection of Investments, China and Bangladesh signed a Memorandum of Understanding in 2016 to explore the feasibility of a Free Trade Agreement (FTA). This initiative aims to build upon the existing framework and create new opportunities for growth and collaboration.
As a demonstration of goodwill and support for Bangladesh’s economic development, China has already offered duty-free access to 97% of Bangladeshi products under the Asia-Pacific Trade Agreement (APTA), eliminating tariffs on 84 types of commodities. The proposed FTA is expected to further enhance bilateral trade, help reduce the trade deficit, and contribute significantly to the realization of Bangladesh’s ambitious Vision 2041 goals, which aim to transform the country into a developed nation by 2041.
China has expressed support for Bangladesh’s bid to become a partner country of BRICS and hopes for Bangladesh to become a BRICS member soon. China also appreciates Bangladesh’s humanitarian efforts in sheltering Rohingya refugees and is actively working to achieve a ceasefire and dialogue in Myanmar.
Conclusion
The trajectory of Bangladesh and China’s trade relations promises not only economic prosperity but also signifies a paradigm shift towards a more interconnected and interdependent global economy. The foundation laid during this period is poised to catalyze transformative growth, creating opportunities for both nations to navigate the future hand in hand.
