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Bangladesh-China relations to reach a new heights

Published : Friday, 5 July, 2024 at 12:00 AM  Count : 590
Arafat Islam Joy
Bangladesh and China have enjoyed friendly relations since establishing diplomatic ties in January 1976.Since then, associations between China and Bangladesh have risen exponentially. Bilateral ties between the two countries started to solidify, identifying each others interests and priorities. The relationship has undergone a tremendous transformation to the extent that China is now considered by many in Bangladesh as an all-weather friend.

Over the years, there have been regular high-level bilateral talks and visits between the two countries. Communication between their governments, legislatures, political parties, armies, and non-governmental organizations got a new rhythm when Chinese President Xi Jinping visited Bangladesh in 2016. Ministers of both countries have historically taken the lead in helping to establish this link. In this course, Prime Minister Sheikh Hasina is scheduled to pay a state visit to China after five years.

Prime Minister Sheikh Hasina will visit China on a bilateral visit between July 8 and 11 to open up new areas of trade, investment, and economic cooperation. Earlier, China invited her to pay an official visit to Beijing, as the country is ready to work with the new government of Bangladesh to further deepen mutually beneficial and friendly cooperation in all fields.

Bangladesh-China relations have grown significantly in recent years. Both countries share the same outlook on a number of important international and regional issues. Politically, cooperation between the CPC and the AL is growing gradually. The Awami League is the only party to sign an MoU with the Communist Party of China.

Though its a four-day tour, the main agenda of the tour will be limited to 9 and 10 July. On 9 July, official talks will be held between the two prime ministers. On 10 July, Prime Minister Sheikh Hasina will talk with the Chinese president Xi Jinping. In the backdrop of contemporary circumstances, geopolitics is likely to feature discussions between the two leaders. The prime minister is also scheduled to meet with the president of the Chinese parliament, the National Peoples Congress of China, Zhou Lusi.

The Bangladesh-China relationship needed improvement in several areas, such as trade fairs, the Bangladesh-China FTA, the taka-yuan currency swap, the promotion of the MoU on the Special Assistance Plan for Disaster Prevention and Mitigation, and the common development of the Bangladesh-China economy. With this upcoming Beijing visit, the Bangladeshi Prime Ministers efforts are hoped to achieve all these objectives.

A total of 12 deals and MoUs are likely to be signed during the tour. Significant among these are Chinas Global Development Initiative (GDI), trade assistance, investment protection, digital economy, blue economy, announcement of free trade agreement study, and construction and renovation of several friendship bridges. Along with these, Chinese investment, medium- and long-term loans, Belt and Road Initiative (BRI) projects, and resolving the Rohingya crisis and Myanmars civil war will be a priority during the visit.

During her visit, Bangladesh may seek around $7 billion in budget support in addition to loans for a number of large projects. Of this, China will provide USD 5 billion under trade assistance and USD 2 billion under budget assistance in local currency as a credit to Bangladesh. Once received, the $5 billion policy loan will help the country ease the ongoing pressure on foreign currency reserves. Talks on Chinese loan proposals will be held during Prime Minister Sheikh Hasinas upcoming visit to Beijing.

Bangladesh is expecting a formal declaration of the beginning of a free trade agreement (FTA) negotiation with China during this visit. A China-Bangladesh FTA would cover trade in goods, services, investment, e-commerce, and high-tech industry cooperation, providing a basic framework and solid guarantee for future bilateral economic and trade cooperation. A China-Bangladesh FTA would also make Chinas investment in Bangladesh more convenient and efficient, contributing further to creating employment opportunities, upgrading industries, and diversifying exports.

Bangladesh and China have a huge trade deficit. To bridge this gap, China has not only provided economic aid to Bangladesh but also signed the Asia Pacific Trade Agreement (APTA) to remove tariff barriers on commodities imported from Bangladesh.While China provides 98 percent tariff-free facilities on Bangladesh products, Bangladeshs exports to that country have mostly stayed the same. Last year, Bangladesh exported products worth around USD 700 million and imported goods worth over USD 20 billion.

Bangladesh government earns more than Tk 25,000 crore or $2.14 billion as duty on import of Chinese goods in a year. However, suppose Bangladesh graduates to a developing nation from the LDC in November 2026. In that case, the country cannot collect this considerable revenue as import duty from Chinese goods. Consequently, Bangladesh would propose that even after 2026, the tariff-free facilities should remain in place.

Bangladeshs bilateral trade with China now exceeds USD 20 billion, almost all of which is comprised of imports by Bangladesh. Bangladesh has to spend vast amounts of dollars to import goods from China. The officials feel that if Bangladesh could use the yuan for imports, it would be a significant relief during this dollar crisis. Foreign ministry officials have said that talks are on for trade transactions to be in taka-yuan, as in the case of taka-rupee transactions with India. Bangladesh Bank and Chinas National Financial Regulatory Commission are discussing signing an MoU in this regard.

Chinas President Xi Jinping visited Dhaka in September 2016. During this historic visit, 27 projects were decided to be implemented. Of these, 15 have been completed, six are underway, and the remaining six are being considered for replacement. The government is in talks with China about the projects. One of the projects under consideration for Chinese funding is the construction of a broad-gauge rail line from Bhanga to Kuakata via Barishal and Payra Port. It is estimated to cost about $5 billion. Another project is MRT Line-2, which will run from Gabtali-Narayanganj Gulistan to Sadarghat via Gulistan. Bangladesh may confirm these projects during the visit.

The Rohingya issue will get priority in Beijing as Chinas role is crucial in commencing the repatriation of the forcibly displaced people from Bangladesh to Myanmar. As Bangladesh and China have continued to consolidate their bilateral relations over the decade, China must come forward to join hands with the Bangladesh government forearly repatriation of the Rohingyas to their ancestral land.It is high time that China pressured Myanmar to improve the security situation in Rakhine, which would facilitate talks between Bangladesh and Myanmar and promote conditions of repatriation and resettlement facilities.

Since establishing diplomatic relations nearly 50 years ago, Sino-Bangladesh ties have expanded significantly to cover a wide range of subjects. Bangladesh has continually demonstrated its interest in maintaining close and friendly relations with China and, as far as possible, partaking in the ever-expanding political, economic, and defense relations between the two friendly nations.  In addition, with PM Hanisas scheduled visit to China, bilateral relations between the two time-tested friends will be further enhanced. Thus, ties between the two friendly nations will undoubtedly continue to grow and do so for many more decades to come.

The writer  is a researcher and freelance columnist


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