Yunus’ China visit likely to seal $138m healthcare grant

Summary:

• Bangladesh to secure $138M Chinese grant for hospital, education, and infrastructure
• Yunus to discuss China-Bangladesh Free Trade Agreement and Investment Treaty
• Plans for Chinese Economic Zone in Anwara, Chattogram, to boost trade
• Bangladesh seeks Chinese support for ASEAN and RCEP membership
• Renewable energy investments and export-oriented industries to be prioritized

The government expects to sign a deal with Beijing during Chief Adviser Muhammad Yunus' upcoming visit to China, under which Bangladesh will receive a grant of 1 billion Yuan, equivalent to $138 million or Tk1,678 crore – meant for projects selected jointly by both countries, including the construction of a world-class hospital in Bangladesh.

China pledged the grant during former prime minister Sheikh Hasina's visit to Beijing last July, but no progress has been made since her ouster in August.

The current interim government, led by Muhammad Yunus, aims to secure the promised funds. As part of the preparations, the Ministry of Finance has already sent a summary of that agreement to the chief adviser for approval, according to sources from the finance and commerce ministries and the Chief Adviser's Office.

Dr Yunus is expected to depart Dhaka for China on 26 March to attend the Boao Forum for Asia (BFA) Annual Conference 2025 in Boao, Hainan Province, South China and hold bilateral talks with Chinese President Xi Jinping.

Boosting economic relations with China will be a central focus of this visit, sources said.

The chief adviser is set to engage in talks with Xi Jinping on various topics, including the establishment of a Chinese Economic Zone in Anwara upazila of Chattogram, the initiation of negotiations for a Bangladesh-China Free Trade Agreement (FTA), and the signing of a Bangladesh-China Investment Treaty.

Bangladesh is also expecting investments from China's export-oriented industries and renewable energy sector. Given the higher tariffs imposed by the US on Chinese goods, Yunus and Xi are expected to discuss ways to encourage Chinese companies to invest in Bangladesh

Additionally, discussions are expected to address attracting Chinese investment in Bangladesh's renewable energy sector and regarding Bangladesh's aspiration to join the Association of Southeast Asian Nations (Asean).

Foreign Affairs Adviser Mohammad Touhid Hossain earlier said Prof Yunus will meet with Chinese President Xi Jinping on 28 March, during which several memorandums of understanding (MoUs) are expected to be signed between the relevant organisations of both countries.

Chinese Ambassador in Dhaka Yao Wen also expressed confidence that Yunus' visit will be a very successful one, with several important announcements expected.

Finance ministry officials told TBS that part of the $138 million grant will be used for establishing a general hospital in Bangladesh with 500 to 1000 beds. The hospital will provide modern medical services to all types of patients to reduce the trend of medical tourism abroad.

For the establishment of the hospital with Chinese funding, the health ministry initially selected three locations – Uttara and Mirpur in Dhaka and another spot in Chattogram.

An MoU was also signed regarding this matter during Foreign Adviser Touhid Hossain's visit to China in January. This initiative has been taken mainly to ensure an alternative for Bangladeshi patients after difficulties in obtaining Indian visas.

During Touhid's visit, China also promised to set up a tertiary medical education institution in Bangladesh. Part of the Chinese grant may also be used for establishing this tertiary institution.

Bangladesh eyes deeper economic ties with China

During the chief adviser's visit, the establishment of a Chinese Economic Zone in Anwara, Chattogram, and the attraction of private sector investment from China are expected to be key priorities, according to sources from the Bangladesh Economic Zones Authority (Beza) and the Bangladesh Investment Development Authority (Bida). 

Despite long-standing discussions about setting up the Economic Zone in Anwara, there has been little progress. It is anticipated that an MoU may be signed during the visit, designating China Road and Bridge Corporation as the developer, replacing China Harbour Engineering Company appointed by China earlier.

Bangladesh is also expecting investments from China's export-oriented industries and renewable energy sector. Given the higher tariffs imposed by the US on Chinese goods, Yunus and Xi are expected to discuss ways to encourage Chinese companies to invest in Bangladesh.

Ahead of the chief adviser's visit, China has sent Bangladesh a draft for a revised bilateral investment agreement. The original treaty, "The Encouragement and Reciprocal Protection of Investment," was signed between the two countries in 1996. China has now proposed an update and prepared a new draft, with discussions on finalising the agreement expected during the visit.

To secure duty-free export benefits in emerging Asian markets after its LDC graduation in 2026, Bangladesh officially requested inclusion in the Asean and the Regional Comprehensive Economic Partnership (RCEP) in October last year. However, it has yet to receive a response from either party.

During the meeting, China's assistance will be sought to facilitate Bangladesh's accession to Asean and RCEP, according to commerce ministry officials. 

Additionally, Beijing may propose to begin negotiations for the Bangladesh-China FTA, officials have said. While an agreement was made during former prime minister Sheikh Hasina's last visit to China to start FTA negotiations by 2024, it has not been implemented yet.

ERD officials mentioned that during Sheikh Hasina's visit, 12 projects were proposed for financing, but no response was received from China at that time. Several priority projects from that list may come up for discussion again, according to sources from the Ministry of Foreign Affairs.

According to ERD data, no loan agreements have been signed for any development projects between Bangladesh and China in the past two years. 

There is no possibility of signing any loan agreements for development projects with China in the current fiscal year. The most recent loan agreement was signed in 2023 for the Rajshahi Wasa Surface Water Treatment Plant project, worth $276.25 million.

Discussions about loan agreements for new projects with China may take place during the chief adviser's visit, according to finance ministry sources.

Among these, a $250 million agreement for the purchase of four vessels is on the priority list. Additionally, Bangladesh is seeking a loan of $353.52 million for the Expansion and Modernisation of the Mongla Port Facilities project, and this could also be discussed during the visit.