Dhaka eyes bigger Chinese investment, financing as PM to visit Beijing

Highlights:

• Bangladesh preparing investment deals ahead of Tarique Rahman's China visit
• Beijing conference aims to attract new Chinese investment
• Dhaka seeks financing for projects exceeding $9 billion
• Teesta project and Mongla Port funding are priorities
• China proposes free trade agreement and deeper financial cooperation
• Handa Group may expand investments through new economic zone agreements

Bangladesh is preparing a series of investment agreements and financing proposals ahead of Prime Minister Tarique Rahman's expected visit to China later this month as the government seeks to attract fresh Chinese investment, secure funding for major infrastructure projects and strengthen bilateral economic cooperation.

The visit is expected to take place between 23 and 26 June. As part of the programme, the Ministry of Foreign Affairs and the Bangladesh Investment Development Authority (Bida) are preparing to host an investment conference in Beijing on 24 June, with the prime minister expected to attend as the chief guest.

Infograph: TBS

Speaking to The Business Standard, officials familiar with the matter said the government is working to finalise several agreements and memoranda of understanding related to investment cooperation. These include a land allocation agreement for Chinese company Handa Group at the Keraniganj Economic Zone and a developer agreement for the proposed Chinese Economic Zone in Chattogram.

At the same time, Dhaka is placing emphasis on securing financing for a number of stalled or slow-moving development projects, including the Teesta River Comprehensive Management and Restoration Project and the expansion and modernisation of Mongla Port.

In addition, China is keen on developing another economic zone near Mongla Port, with formal discussions expected to advance during the visit.

Bangladesh will also seek substantial budget support and project financing from the China-led Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NDB).

According to government project pipelines, Bangladesh currently has financing proposals exceeding $9 billion pending with the Chinese government, AIIB and NDB. In addition, the Economic Relations Division (ERD) has asked ministries and agencies to submit lists of priority projects that could be considered for future Chinese financing. Those submissions will be consolidated into a new set of proposals.

Trade and financial cooperation

China has proposed beginning negotiations on a Bangladesh-China Free Trade Agreement as soon as possible. Beijing has also suggested accelerating the upgrading of the existing Bangladesh-China Investment Agreement between the two countries.

Other proposals include a currency swap arrangement, a memorandum of understanding on banking and financial cooperation, and reciprocal opportunities for banks from both countries to operate in each other's markets.

Officials said discussions may also cover cooperation under the Belt and Road Initiative in areas including economic development, trade, green development, the digital economy, agriculture, scientific and technological innovation, and finance.

The investment conference in Beijing is expected to highlight Bangladesh's investment potential, priority sectors and investment-friendly policy measures introduced in the 2026-27 budget.

In a move aimed at demonstrating progress on Chinese investment facilitation, the government yesterday approved a project to appoint a developer for the planned Chinese Economic Zone in Chattogram. The approval was granted at a meeting of the Executive Committee of the National Economic Council chaired by the prime minister.

Business outreach in China

Separately, Commerce and Industries Minister Khandaker Abdul Muktadir will fly to China tomorrow for five days to participate in the China-South Asia Expo in Kunming. His delegation includes representatives from the Export Promotion Bureau, the Bangladesh Garment Manufacturers and Exporters Association and business leaders from various sectors.

Officials said attracting Chinese investment and expanding exports to the Chinese market will be key objectives during the event.

Mohd Khorshed Alam, president of the Bangladesh-China Chamber of Commerce and Industry, who is also travelling to China for the expo, said efforts will be made to encourage Chinese investors to enter joint ventures in existing Bangladeshi factories that already have gas and electricity connections.

Given ongoing energy constraints affecting new industrial investment, he said, attracting Chinese capital to revive underutilised or distressed factories could provide a practical pathway for expanding production.

Previously, during a state visit to Beijing in July 2024 by then prime minister Sheikh Hasina, Bangladesh hosted a similar trade summit that yielded multiple commercial MoUs between the two nations. While Dhaka had anticipated securing a $5 billion budget support package during that trip, China ultimately extended an economic assistance grant of just 1 billion Yuan, equivalent to approximately Tk1,600 crore or $136 million.

Handa Group investment plans

The upcoming visit may also advance investment discussions with Handa Group, which previously expressed interest in investing up to $250 million in Bangladesh, including an initial commitment of $150 million.

During an investment summit held in Bangladesh under the interim government led by Muhammad Yunus, representatives of the Chinese company visited several economic zones, including the National Special Economic Zone in Chattogram.

In July last year, the Chinese apparel manufacturer signed an agreement to invest $41.33 million in the BEPZA Economic Zone in Mirsharai.

Officials said preparations are under way for signing a land allocation agreement for Handa Group at the Keraniganj Economic Zone during the Beijing investment conference. A separate agreement for appointing a Chinese developer for the Chinese Economic Zone in Anwara, Chattogram, may also be signed.

More than $9b in financing proposals

ERD officials said Bangladesh currently has nine projects awaiting financing from the Chinese government, with proposed loans amounting to $4.34 billion.

Key projects include the Teesta River Comprehensive Management and Restoration Project, the expansion and modernisation of Mongla Port Facilities, Chinese Economic and Industrial Zones in Chattogram, and digital connectivity development and the construction of a dual-gauge railway track parallel to the existing metre-gauge line on the Joydebpur-Mymensingh-Jamalpur corridor.

A further 17 projects are awaiting AIIB financing, involving proposed loans worth $3.8 billion. Among them are the procurement of six container vessels with capacities of 2,500 to 3,000 TEUs each, modernisation and capacity enhancement of the Bangladesh Rural Electrification Board network in the Chattogram-Sylhet region, and similar upgrades in the Rajshahi-Rangpur region.

Bangladesh is also seeking $900 million in AIIB budget support through two programmes: the Climate Resilient Efficient and Clean Energy Programme, valued at $500 million, and the Water Resilience and Climate-Smart Urban Service Delivery Programme, valued at $400 million.

Meanwhile, seven projects with proposed financing of $1.2 billion are under consideration by the New Development Bank. These include the construction of a dual-gauge railway line between Bogura and Sirajganj, improvements to Titas Gas network capacity and supply efficiency, and gas infrastructure upgrades in Dhaka and Narayanganj.