China schmoozes Bangladesh, but not everything is copacetic

Foreign Affairs

China’s globe-trotting foreign minister is on the road, as he always is. His last stop was Bangladesh, where he thanked the country for its support of Beijing’s position on Taiwan.

Image via Bangladesh’s Foreign Ministry on Twitter.

Chinese Foreign Minister Wáng Yì 王毅 met with Bangladesh’s Prime Minister Sheikh Hasina and Foreign Minister AK Abdul Momen over the weekend. 

Both sides pledged to deepen development ties and “oppose separatism” during Wang’s conversation with Momen on August 7, while Wang thanked him for Bangladesh’s support for China’s sovereignty claims over Taiwan amid the fallout from U.S. House Speaker Nancy Pelosi’s high-stakes visit to the island last week.

  • China will raise the proportion of Bangladeshi goods that are duty-free to 98% starting on September 1, up from the current 97% that came into force on July 1, 2020.

Bangladesh also sought China’s help to repatriate Rohingya refugees back to Myanmar: China helped broker an agreement between the two neighboring countries in November 2017 to repatriate about 700,000 Rohingya, who fled persecution in Myanmar and crossed into Bangladesh in August that year.

  • “The Chinese side supports Myanmar’s efforts in maintaining its domestic stability, and supports Myanmar and Bangladesh appropriately resolving the Rakhine state issue via dialogue and consultation,” Chinese Premier Lǐ Kèqiáng 李克强 said in 2018, per Reuters: China is “willing to provide the relevant parties with necessary support in this regard.”

But it’s not all smiles everywhere: Bangladesh’s finance minister, A.H.M. Mustafa Kamal, in an interview with the Financial Times, cautioned developing countries about taking out more loans through China’s Belt and Road Initiative, as global inflation and slowing growth continue to weigh on debt-ridden emerging markets.

  • Kamal pointed to Sri Lanka’s crisis, highlighting that China had not been “rigorous enough” in deciding which projects to support: “After Sri Lanka…we felt that Chinese authorities are not taking care of this particular aspect, which is very, very important,” he told the FT.
  • Last month, Bangladesh became the latest country in Asia to approach the IMF for financing assistance: Bangladesh’s total foreign debts totaled $62 billion in 2021, per the IMF, with the most of it owed to multilateral lenders such as the World Bank. 
  • The country owes $9 billion, or 15%, to state lenders from Japan, its largest bilateral creditor, followed by China at about $4 billion, or 6%.

China is Bangladesh’s largest trading partner, particularly in crucial raw materials for its garment industry, which brings in more than 80% of foreign currency from exports. However, Dhaka also struggles to balance maintaining close ties with Beijing with its relations with India and the United States, China’s global competitors.

  • Hasina’s administration closed the Taiwanese business representative office in Dhaka after winning elections in 2008, in response to a request from China: Since then, China has increased its engagement in Bangladesh.
  • Chinese leader Xí Jìnpíng 习近平 paid a historic visit to Dhaka in 2016, marking the first visit by a Chinese head of state to Bangladesh in 30 years at the time. Xi’s visit came amid competition with India for regional influence, after Beijing upgraded ties with Bangladesh to a strategic partnership and inked 27 agreements amounting to nearly $40 billion.
  • According to data, from January to July 2021, the overall import and export volume of China and Bangladesh was $13 billion, a rise of 58.9% year-on-year.

Can Bangladesh keep everyone happy? “To us, China is very important. We also need to maintain good relations with both India and the United States as they are also very important development partners of Bangladesh. There is nothing to be afraid of because of Bangladesh’s close ties with China,” one former Bangladeshi ambassador to China told the Associated Press. There are many in Washington, D.C., and New Delhi who will not be reassured by those words. 

Nadya Yeh

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