China deepens its footprint in Bangladesh as Belt and Road initiative takes shape

BE2C2 Report — Experts and officials are predicting that Bangladesh and China will see bilateral trade boom and investments jump in the coming years, according to participants at the HSBC’s thought leadership program held in Dhaka.

In collaboration with the Bangladesh China Chamber of Commerce and Industry, the Hong Kong based bank organized a program titled “Bangladesh-China Business Outlook: One Belt One Road and RMB internationalization” on Wednesday night in the capital.

Bangladeshi Commerce Minister Tofail Ahmed, Chinese Ambassador to Bangladesh Ma Mingqiang, Bangladesh Investment Development Authority Executive Chairman Kazi M Aminul Islam and Deputy Governor of Bangladesh Bank SK Sur Chowdhury participated in the event.

Participants said that Bangladesh is in a strategic location between China, India and ASEAN countries and hence is well placed to be a trading and manufacturing hub.

They added that Bangladesh needs increased connectivity with other economies in the region and China’s Belt and Road Initiative will lead to the realization of this new economic area.

HSBC said the program is aimed at increasing customer understanding of the Belt and Road Initiative (BRI), exploring export possibilities from Bangladesh to China and promoting Renminbi transactions as the currency will be used more widely aided by further international reforms.

The Belt and Road Initiative itself refers to the Silk Road Economic Belt and the 21st Century Maritime Silk Road, which, through a revival of historic trade routes, will see cooperation between China and other nations greatly increased.

The Silk Road Economic Belt revival project envisages involving more than 60 countries and regions as China assembles new trade routes, binding other nations closer to it.

Speaking at the event, Bangladeshi Commerce Minister Tofail Ahmed said when the Belt and Road Initiative comes to fruition, the trade and commerce of Bangladesh and China will make for a much better future. He said this could also result in a new form of global cooperation in economic, financial and technological areas.

Chinese Ambassador Ma Mingqiang said that the Belt and Road initiative is aimed at achieving more interconnectivity including infrastructure, capital, people science and technology.

“So far we understand Bangladesh is in need of these,” he added.

“Bangladesh and China are two of the fastest growing economies in the world with expanding bilateral trade that will grow further as China’s Belt and Road Initiative takes shape,” said Tait.

China deepens its footprint in Bangladesh

Having jump-started the $57 billion southern corridor of OBOR through Pakistan to access the Arabian sea from its landlocked northwest province of Xinjiang – the shortest trade and shipping route to the Middle East, Africa and beyond, China now seeks somewhat a similar arrangement with Bangladesh, and by extension fruition of its Bangladesh-China-Indian-Myanmar corridor (BCIM).

One of the key strategic factors driving the BCIM corridor was reduction of reliance on the Straits of Malacca, militarily dominated by the U.S.

Chinese President Xi Jinping’s visit to Bangladesh in September 2016 was considered a “milestone” as it was the first such visit in three decades. China’s sphere of influence in Bangladesh cannot be underrated, Bangladesh observers say, considering the number of high-value agreements that were signed, all steps toward fulfilling the developmental ambitions of Bangladesh.

For the first time, Sino-Bangladeshi energy cooperation outstripped Indo-Bangladeshi energy cooperation. India had extended a $2 billion line of credit to Bangladesh in 2015. It plans to announce additional $3.6 billion during PM Sheikh Hasina’s visit to Delhi in the first week of April.

During Xi’s visit, China signed off on loans worth $24 billion, leaving India far behind.

China and Bangladesh agreed to elevate their relationship from a “comprehensive partnership of cooperation” to a “strategic partnership.”

Bangladesh like Pakistan is backing China’s “One Belt, One Road” (OBOR) initiative, “much to the chagrin of India,” experts say.

BCIM which has already made a soft launch, according to several reports, will boost China-Bangladesh bilateral trade and the former’s economic growth.

Bangladesh’s growth is expected to increase to 7.2 per cent this fiscal year from 7.1 per cent last fiscal year according to government estimates. It is one of the fastest growing emerging economies according to the World Bank and other global multilateral development banks.

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