BRI and beyond: Strengthening Bangladesh-China relations amid political change

The Padma Multipurpose Bridge was completed in 2022 with Chinese technical expertise. Photo: TBS

In recent months, Bangladesh has undergone a remarkable shift in the political arena with the formation of an interim government led by Professor Muhammad Yunus. This has sent shockwaves throughout the region, bringing forth questions about the direction in which Bangladesh's foreign policy might move—especially with its long-standing political and economic ties with China.

Being the world's second-largest economy and a key player in the Asia-Pacific region, China has been upholding a close and multilayered relationship with Bangladesh, based on a shared vision of economic development and regional stability. 

However, the recent political developments in Bangladesh have provoked the stakeholders to rethink the trajectory of the bilateral rapport.

So far, the Chinese government has continued to adopt a diplomatic stance welcoming the new Bangladeshi regime, grounding itself in the non-interference, and respecting Bangladesh's sovereignty principles. 

To convey China's commitment to the Comprehensive Strategic Cooperative Partnership and to explore further means of bilateral cooperation, the Chinese Ambassador to Bangladesh, Yao Wen, has engaged actively with the members of the interim government, including Dr Muhammad Yunus. 

The future of its relations with China, however, will be crucial in establishing the course of the bilateral rapport and its position in the changing South Asian geopolitical framework, given recent developments and the observation of potential chances for cooperation. 

Infrastructure and development projects

Infrastructure development is considered one of the cornerstones of Bangladesh-China bilateral relations, particularly under the framework of China's Belt and Road Initiative (BRI). In recent years, China has become a leading investor in Bangladesh, with a series of landmark projects completed that have elevated the country's connectivity and economic opportunities. 

After Pakistan in South Asia, Bangladesh is the second-largest recipient of Chinese loans under the BRI project. During President Xi's visit in 2016, the Bangladeshi government and the Chinese government inked several Memoranda of Understanding (MoUs) and agreements. 

Bangladesh is expected to get $26 billion for BRI projects and $14 billion for joint venture projects totalling $40 billion under the BRI. BRI initiatives have mostly been in the energy and transportation sectors in Bangladesh, where infrastructure investment requirements are projected to be at 1.5% of GDP in 2040.

However, the Padma Multipurpose Bridge, a 6.15-kilometre-long bridge spanning over the Padma River, is one of the key examples of this cooperation. The bridge, completed in 2022, with Chinese technical expertise, connected the country's south to its central capital, Dhaka, moving people, goods, and services. 

Another BRI-backed project that has increased Bangladesh's transportation and logistics capabilities is the Karnaphuli Tunnel, which links the Chittagong port to the country's northern regions. 

During a BRI ceremony in Dhaka in September 2023, Yao Wen, China's ambassador to Bangladesh, stated that China had constructed 12 highways, 21 bridges, and 27 power plants in Bangladesh. Improving the country's overall infrastructure spine, 'Chinese enterprises have generated 550,000 new jobs in Bangladesh,' he added. 

These investments have not only contributed to the economic growth of Bangladesh but also brought about strong support for the strategic ties between the two countries, where China became an important partner in Bangladesh's development aspirations.  

As Bangladesh faces the challenges of its LDC graduation in 2026 and wishes political stability and economic development for Bangladesh, China expressed its desire to expand its cooperation with the country, accentuating the strategic value of such a partnership for the infrastructural and economic betterment. 

Trade dynamics

Over the years, China has emerged as one of the major sources of foreign direct investment (FDI) for Bangladesh. In FY18, over $1.03 billion was invested in Bangladesh by Chinese entities, followed by $626 million in FY19. 

However, the inflow decreased to $91 million in FY20 during the peak of the epidemic, as per data from Bangladesh Bank. In 2022, net FDI from China was 187 million, while in 2023, it was 260 million. A number of industries—ranging from manufacturing to energy to infrastructure—have benefitted from these investments in which thousands of Bangladeshi workers are employed.

According to the Observatory of Economic Complexity (OEC), in September 2024, China exported $1.72 billion to Bangladesh and imported $92.3 million—resulting in a positive trade balance of $1.63 billion for China. 

The exports of China decreased by $118 million (-6.4%) from $1.84 billion to $1.72 billion, though imports increased by $7.25 million (8.53%) from $85 million to $92.3 million from September 2023 to September 2024, giving rise to a positive trade balance for Bangladesh.

However, China's commitment to strengthening economic ties with its South Asian partner further takes a recent announcement by the Chinese government to grant zero-tariff access to 100% of Bangladeshi products from December 2024. 

As a result, it is expected that this will widely raise Bangladesh's exports of agricultural, industrial, and textile products to the Chinese market, which is sorely needed for the country's economy. In September 2024, per OEC data, the top imports of China from Bangladesh were Non-Knit Men's Suits ($4.96 million), Knit T-shirts ($4.56 million), Non-Knit Men's Coats ($4.38 million), Jute Yarn ($4.01 million), and Processed Hair ($3.9 million).

The strategic value of the upcoming Bangladesh-China partnership, however, is also recognised by the country's interim government, which seeks to deepen economic cooperation with China. The government has stated that it is willing to work with Chinese companies in a wide variety of sectors, including renewable energy, infrastructure, and high-tech industries. 

Foreign Advisor M Touhid Hossain said, "We need meaningful cooperation from China, and new avenues of collaboration must be explored by both sides."

People-to-people bonds and cultural exchange

This relationship between the two countries has also been marked by a broad tapestry of people-to-people exchanges and cultural cooperation. Education is one of the most notable engagement areas in this regard. 

Approximately 20,000 Bangladeshi students are currently pursuing their studies in China, taking advantage of the various scholarship programs and academic opportunities offered by the Chinese government. But these exchanges have not only been educational for Bangladeshi youth, but they have also helped build ties between the two countries in cultural exchanges.

However, the cultural exchanges between Bangladesh and China have also been on the rise, and in 2025, the two countries are expected to celebrate the 'China-Bangladesh Year of People-to-People Exchanges.' 

The implementation of this undertaking has allowed for a range of artistic, sporting, and educational forums to occur that aim to broaden ties between the peoples of the two nations.

Regional dynamics and strategic positioning

The strategic location and growing economic influence of Bangladesh make it an increasingly 'undeniable' player in regional power dynamics. Since it is a key player in South Asia, Bangladesh has always been delicately balancing between its neighbours and major powers—India, China, the US, and other Western powers. 

The multi-alignment approach enables Bangladesh to exploit its geographical location and reap the benefits of cooperation with the different partners.

However, concerns relating to a change in the country's foreign policy trajectory have been apparent among the Chinese government by the recent political changes in Bangladesh. 

The Foreign Advisor of Bangladesh stated that 'Bangladesh's political and economic trajectory will shape the direction of its relationship with China.' Despite the development, the room for collaboration in the 'defense, infrastructure, and overall development arena' has not been turned off. He further said, "We need security cooperation from China."

In this respect, along with conducting proactive diplomacy, maintaining a partnership and working solidly with China will be critical to the security and progress of the region. The delicate balance of power between China, the US, and other powers throughout South Asia will be very crucial for Bangladesh in the coming periods. 

And China's ability to assure Bangladesh that it remains committed to the bilateral partnership and non-interference in the country's sovereignty and independence will be vital to overcome future challenges.  

What lies ahead?

Bangladesh-China bilateral rapport has become notably a 'comprehensive strategic partnership' in the areas of infrastructure development, trade and investment, and people-to-people exchanges. This partnership has been a major contributor to the economic growth of Bangladesh as well as to the regional influence of China and is one of its main integrating factors. 

Despite the recent political changes in Bangladesh, both Bangladesh and China, no doubt, are committed to keep going on a positive track in the foreign policy arena to ensure the economic and development growth of Bangladesh and to maintain geo-strategic soundness in the South Asian region.

Sketch: TBS

Kawser Uddin Mahmud is a geopolitical analyst and international relations author based in Dhaka. He is working as a researcher at the KRF Center for Bangladesh and Global Affairs (CBGA), Dhaka. He can be reached at kawsarduir@gmail.com

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.