China-Bangladesh economic partnership keeps deepening

 China-Bangladesh economic partnership keeps deepening

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TRADE
Liu Zhenhua
30 September, 2020, 09:30 pm
Last modified: 01 October, 2020, 11:59 am
Celebrating the 45th anniversary of the establishment of diplomatic relations between China and Bangladesh

File photo of Xi Jinping and Sheikh Hasina/Collected
Since China and Bangladesh formally established diplomatic relations on October 4, 1975, the friendly bilateral relations between the two countries have been developing in a sound and stable manner over the past years. This year of 2020, marks the 45th anniversary of the establishment of diplomatic relations between China and Bangladesh, has become an excellent opportunity to further deepen the friendship and partnership between our two countries.

China and Bangladesh traditionally have been enjoying friendly bilateral relations. Looking back on the past 45 years, the leaders of the elder generation in the two countries have created the friendly relations, and with the series of high-level visits, especially President Xi Jinping’s visit to Bangladesh in October 2016 and Prime Minister Sheikh Hasina’s visit to China in July 2019, the bilateral relations between China and Bangladesh have been further strengthened and elevated to the strategic partnership of cooperation. Against this background, we are all delighted to see that China-Bangladesh economic and trade cooperation has achieved tangible and fruitful results in this golden development period.

Bangladesh has experienced the fastest growth rate in the Asian Pacific region and is one of the most dynamic countries in the world, maintaining a GDP growth rate of above 6% in a decade and achieving remarkable development attracting worldwide attention. In order to realize the dream of “Amar Sonar Bangla” and the “Vision 2021” and “Vision 2041″of stepping into the categories of middle income countries and developed countries, the government of Bangladesh has been implementing tremendous infrastructure constructions to boost economic development. During this process, China spares no efforts and supports Bangladesh to carry out infrastructure constructions continuously through various means, including concessional loans, investment cooperation, project contracting and China-aid projects. Since 2016, the amount of the concessional loans provided by the Chinese Government to Bangladesh has amounted to about $10 billion, which tops the amount among the development partners of Bangladesh. And Bangladesh has been one of the countries utilizing the largest amount of Chinese concessional loans in three consecutive years.

Major infrastructure projects are the basis for cooperation

A number of major infrastructure projects have been implemented by Chinese enterprises in the fields of transportation, energy, power and communications in Bangladesh, making positive contributions to the economic and social development of the two countries.

In the field of transportation, since 1986, the Chinese Government has helped Bangladesh to build seven bridges under the China-aid framework, which were named as the 1st to 7th Bangladesh- China Friendship Bridge. The 8th Bangladesh-China Friendship Bridge was started to be built in 2017. Traffic congestion has been effectively alleviated and flood losses have been greatly reduced by these bridges in Bangladesh. Padma Bridge Rail Link Project, financed by concessional loans from the Chinese Government, is currently the largest G-to-G project under “Belt and Road Initiative”, with a cost of $3.1 billion. The Multilane Road Tunnel under the River Karnaphuli Project is the only tunnel under river in South Asia, which is also financed by concessional loans from the Chinese Government. In addition, projects such as the Padma Bridge and the Cox Bazar Railway are being undertaken by Chinese companies. When completed, these projects will greatly facilitate the travel of local people and enhance regional connectivity.

In the field of power, with the completion of a number of major infrastructure projects, such as Gulashao 365MW, Payra 1,320MW, S Alam 1,320MW, Patuakhali 1,320MW and Barishal 350MW power plants, they will play an important role in making up the power gap and alleviating the power crisis in Bangladesh.

In the high-tech field, the Establishment of IV Tier National Data Center, funded by concessional loans of the Chinese Government, is the most advanced data storage center in Southeast Asia and South Asia. Installation of Single Point Mooring with Double Pipelines Project will directly import crude oil from ocean ships into Chittagong Refinery by means of undersea oil pipelines, saving crude oil transportation cost and crude oil loss of about $500-800 million annually. Power Grid Network Strengthening Project under PGCB, Expansion and Strengthening of Power System Network under DPDC Area, will realize the intelligent operation of power grid in Bangladesh.

In addition, the successful completion of the Bangabandhu International Conference Center, built with Chinese assistance in 2002, and the forthcoming China-Bangladesh Friendship Exhibition Center and other large functional landmark buildings have served social and economic development of Bangladesh in a favourable way, and have also become the witness of the enduring and ever new friendship between China and Bangladesh.

Trade and investment cooperation further expands and deepens

The vitality and huge potential of Bangladesh’s economy are attracting more and more Chinese investors. Especially in the past decade, investment from China to Bangladesh has achieved high-quality development. In terms of growth rate, according to the data of Bangladesh Bank, China’s FDI stock in Bangladesh at the end of 2011 and 2019 was $70 million and $833 million respectively, achieved an increase of 10.9 times and an average annual compound growth of 36.3% in 8 years. For the three consecutive fiscal years since FY2018, the net inflow of investment from China to Bangladesh ranked first among all the FDI sources of Bangladesh. In terms of investment areas, the focus of China’s investment in Bangladesh has shifted from light industry such as garments, shoes and hats to infrastructure such as power plants and highways. Chinese investors have also invested in Bangladesh’s finance, mobile payment, and automotive industries. In the future, the strong momentum of China’s investment to Bangladesh will continue.

Over the past 45 years, China-Bangladesh trade cooperation has also made considerable progress. In the year when diplomatic relations were established, the bilateral trade volume was only $3.06 million. In 2019, the bilateral trade volume reached $18.33 billion, which has undergone earth-shaking changes compared with that of 44 years ago. China has become Bangladesh’s largest trading partner, and Bangladesh has become China’s second largest trading partner in South Asia. In the past 5 years, the bilateral trade volume has maintained a relatively high speed of growth, with an increase of 24.6%. In particular, China has granted preferential tax rate of zero to 97% of tax items originating in Bangladesh from July 1, 2020, which will not only help alleviate the trade imbalance, but will also promote the recovery of bilateral trade from the pandemic and provide continuous impetus to the social and economic development of Bangladesh in the era of post-pandemic.

Human resources cooperation enjoys broad prospects

Bangladesh and China started the human capacity building cooperation under the China-aid framework in 2013. China has been providing training of human resources including short-term training programmes and degree programmes in the areas of public administration, science and technology, agriculture, healthcare and arts. China also provides government scholarships for Bangladeshi students to study in China. The training programmes offered by China to Bangladesh aims at improving managerial skills and practical techniques for government officials, senior managerial personnel and specialized technicians of Bangladesh. From 2013 to 2019, nearly 3,000 officials and technical staff received short-term training under the China-aid framework. About 100 Bangladeshi officials and young scholars have been successfully recommended to study for a higher degree in China.

Nowadays, those trainees are playing an important role in bilateral economic and trade cooperation and long friendship. With the knowledge they have acquired in China, they are contributing to economic development in Bangladesh, while playing a role in deepening the friendship and cooperation forged between the two countries. In 2020, due to the Covid-19 pandemic, the training programmes are facing some difficulties. However, under the support of Bangladeshi colleagues, China is actively exploring new approaches to realize the human resource cooperation and seeking the possibility of conducting virtual training.

Great potential for China-Bangladesh economic and trade cooperation

As a good neighbour, good friend and good partner of Bangladesh, China sees the high growth potential of Bangladesh in the future, and maintaining such growth requires timely development of infrastructure and further improvement of the investment environment. China will continue to promote the infrastructure building in the region, while more and more Chinese investors will sincerely participate in the economic development of Bangladesh. At the same time, on economic and technological cooperation, China and Bangladesh have infinite potential to explore the cooperation in the fields of climate change, poverty reduction, public health, human resource development and so forth.

Today, on the occasion of the 45th anniversary of the establishment of diplomatic relations between the two countries, looking forward to the future, China will continue to stand firmly with the people of Bangladesh and continue to support the sustainable development of Bangladesh to bring our economic and trade cooperation to a higher level. 

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