“Friendship with All, Malice towards None” was the message from the country’s father of the nation that is the guiding light of Bangladesh’s Foreign Policy.
We proudly recall the times between 1972 and 1974 when his government had gained ground in diplomatic journey of a war-ravaged Bangladesh. The China-Bangladesh friendship is a long-standing one which has reached 43 years. China attaches greater importance to development assistance to Bangladesh.
For Bangladesh, the economic tie with China is of greater significance as Beijing is now the leading trading partner of Dhaka.
Bilateral trade between Bangladesh and China stood at $12.40 billion during the 2017-18 fiscal year. If the current trend of trading continues, economists predict, the bilateral trade volume would reach up to $18 billion by 2021, the year Bangladesh will be celebrating its 50th anniversary of independence.
Bangladesh’s ‘Look East’ policy is essentially designed to open up new avenues of cooperation with China and the ASEAN (Association of South-East Asian Nations). China became the top source of foreign direct investment for Bangladesh with a volume of $1.03 billion in 2018, whereas the figure was only $119 million in 2017.
The two countries have made substantial progress on the diplomatic front in the past decade. The historic visit of Chinese President Xi Jinping in 2016 gave a new momentum as Dhaka and Beijing signed 27 investment deals worth of nearly $40 billion, some of which were in line with the Belt & Road Initiative (BRI). Accordingly, the two tested friends are in action in the areas of mega projects.
Bangladesh is one of the first countries in South Asia to support the construction of the Belt & Road, and also an active supporter and participant in the construction of the BCIM-EC (Bangladesh, China, India and Myanmar economic corridor).
The growing success in relations between the two friendly countries has been reflected in a series of landmark initiatives. They include construction of $3.7 billion Padma Bridge where Beijing has provided more than $3.0 billion for the project as part of a wider plan to spend $30 billion on Bangladeshi infrastructure projects;
- Construction of Dhaka-Chittagong Highway’s 4-lane extension project, which is the largest road infrastructure project
- acquisition of 25 per cent shares of Dhaka Stock Exchange by Shenzhen-Shanghai Stock Exchange Consortium
- Padma Bridge Rail Link Project
- Payra 1,320-megawatt coal-fired thermal power plant
- Multi-lane Road Tunnel project under the Karnaphuli river
- Dasherkandi Sewage Treatment Plant Project funded by Export-Import Bank of China
- strategic partnership between Ant Finance and Bkash
- Mutual Trust Bank’s collaboration with UnionPay International to jointly launch debit and credit cards with mobile payment services
As Bangladesh is experiencing major transformation in numerous areas, it is imperative to position itself strongly in the regional markets. In view of the momentum in the China-Bangladesh relations, Dhaka needs to expedite formulation of strategic formulas to strengthen the existing bilateral ties. A few of the areas, which could be looked into, are as follows:
RMG EXPORT: Garment exports to China have remained stagnant for the last two years primarily because of exports of basic garment items from Myanmar and Vietnam similar to Bangladesh’s exportable items to China for lower and middle-income groups.
To overcome this, the Bangladeshi exporters should look to diversify their products or come up with alternative RMG export basket as China’s demand for basic garment items, not high-end products, is still relatively high.
TEXTILE MACHINERY MARKET: Bangladesh is the biggest machinery market for Chinese textile and garment machine manufacturers. In this connection, Chinese companies can invest in Bangladesh’s light engineering sector, which has the potential to be the backward linkage for textile machinery.
INDUSTRIAL RELOCATION: Bangladesh, blessed with her proximity to global trade and financial hubs such as Beijing, Shanghai, Hong Kong and Singapore, has emerged as a ‘Relocation Hotspot’ for economies around the world and gained confidence of foreign investors, especially from China, Japan, South Korea, Singapore, the USA and India.
Given the global trade war, Bangladesh is open to ‘sunset industries’ from China due to their rising cost of production. Currently, fully operational nine (9) Export Processing Zones (EPZ) and the government’s plan to develop 100 Special Economic Zones (SEZs) have been acting as ‘growth enablers’ for Bangladesh, branding it as a favourite destination for foreign investors.
BRI & INFRASTRUCTURE CONNECTIVITY: As the BRI enters into its 5th year, extended synergy should be created between the businesses of the two countries to tap emerging opportunities. Because, Bangladesh is an important connecting point for the land and maritime Silk Roads, so it becomes a natural partner in the “Belt & Road Initiative”.
FINANCIAL COOPERATION: Bangladesh needs to innovate and expand new channels of financial cooperation by making use of Chinese platforms such as the Asian Infrastructure Investment Bank (AIIB) and Silk Road Funds involving Bangladesh’s dynamic private sector.
ELECTRIC VEHICLE MARKET: Considering China’s “role model” image in mainstreaming EVs to compliment both environment and business, Bangladesh is eager to collaborate with China in this area. Backward linkage of this industry battery production and automotive light engineering is thriving in Bangladesh so the Chinese companies can take joint venture with Bangladeshi battery manufacturers.
AGRICULTURE: China is proud to serve the world with a range of high quality agricultural products. Consensus can be made by both the sides to promote sustainable agri-business best practices and climate-resilient farming models.
FLORICULTURE: Yunnan province has become China’s largest research and development base for new flower varieties developed under independent intellectual property rights. Bangladesh has a burgeoning flower market where Yunnan model of collaborative innovation including enterprises, academia and independent research institutes can be followed.
HEALTHCARE: China is rapidly emerging as a desirable and affordable destination for individuals seeking healthcare in a wide range of medical specialities, including cardiology, neurology, and orthopaedics. In view of Bangladesh’s lack in modern medical infrastructure, strong synergy can be drawn in this area.
MEDICINE: China’s Yunnan has played an important role in medicinal invention, cancer prevention and therapeutic treatment in southwest China and southeast Asia. Mutual cooperation between pharmaceutical industries of Bangladesh and Yunnan can be expedited. In this connection, business-to-business meetings, and visit to factories producing raw materials for medicine, will help create the path for building a strong technological foundation for this industry in Bangladesh.
TOURISM: In recent years, Bangladesh has identified the tourism industry as a priority area for development. Bangladeshi travel agencies provide hospitality and tour guiding training, but the overall practical skills level is still short of the demand.
Given China’s experience in tourism development, the two countries can establish a joint think-tank to improve tourism sector research focusing on culture, training of tourism professionals and other areas.
There are of course more avenues of cooperation and mutual benefits between the two countries. In the era of changing geopolitics, trade and investment cooperation is key to adding value to the existing bilateral relations. So, Dhaka should apply fresh thoughts to strengthen the Sino-Bangladesh relations.