China View: The Strategic Importance of Bangladesh
Financial Times
The People’s Republic of Bangladesh is a South Asian country considered of terrific importance for China’s influence in the region. Almost entirely surrounded by India, Bangladesh recounts a long history of internal struggles, often product of events related to the colonial era and Pakistani dominion in the region. After a long period viewing Bengalis under the rule of the Portuguese and British naval powers, indeed, from 1947 to 1971 Bangladesh was formally recognized as “East Pakistan.” Due to a Muslim majority, the former Bengal territory was partitioned in such a way that Indian religious communities would be separated from Muslim groups, therefore the Muslim Bengalis were automatically affiliated with their Pakistani counterparts. Bangladesh will only be recognized as such in 1972.
Complex relations with India were, already then, easily predictable due to the numerous cultural and language differences. However, Bangladesh is still considered a strategic area to India, which has for decades influenced the developing potential of the country. Interestingly, China and Bangladesh both share the title “People’s Republic of,” and while their systems of governance essentially oppose, this might have been a predictor of the excellent bilateral relations these countries participate in during modern times.
Bangladesh is part of the vision created by the Chinese-led Belt and Road Initiative (BRI) to enhance international cooperation via investments. Particularly, Bangladesh is part of the project giving birth to the Bangladesh-China-India-Myanmar Economic Corridor (BCIM EC), connecting the Chinese province of Yunnan to the Indian City of Kolkata via Mandalay (Myanmar) and three cities in Bangladesh, including the capital of Dhaka. Through the BCIM EC, both sides are willing to improve their mutual friendship in fields such as trade, infrastructure, and regional security (both cyber and non-cyber). According to the Belt & Road News, Chinese companies have helped to boost the textile and clothing industry by building factories or even by relocating former Chinese enterprises. While creating a significant amount of jobs, Bangladesh is especially grateful to China because it gave Bengalis a chance to be interconnected deeply in South Asian economic dynamics. Earlier, Bangladesh had been heavily reliant on India, which still struggles to let go of the tight grip it had on the country for many years.
The BRI is a serious challenge to India, which opposes China’s growing power in Asia and still fiercely attempts to keep up the competition in hi-tech and related fields. Recently, in July 2020, Bloomberg reported that India’s richest man, Mukesh Ambani, is teaming with U.S. Silicon Valley giants against Huawei and its threatening 5G monopoly in Asia. With over 400 million customers and a project to expand this market, Ambani’ Jio Platforms Ltd. has indigenously built its own 5G technology, closely supported by U.S. Secretary of State Pompeo, sharing the Huawei-free vision. Where does Bangladesh stand in this Tech Cold War between China and India?
Sources believe Bangladesh may be benefiting from the China-India rivalry because the more these are competitive in South Asia, the greater they are going to invest in countries like Bangladesh. Before the announcement of the BRI, China had already become Bangladesh’s top trading partner in 2015, replacing the 40-year-long position held by India. In response to this, two years later India announced it would invest US$ 5 billion in loans for Bangladesh. According to The Diplomat, “Bangladesh is seizing the opportunity and using both China and India to fill its FDI deficit.” Being Bangladesh in a strategic geopolitical situation surrounded on three borders by India, letting Chinese investment win in Bangladesh would mean to give the Chinese the keys to India’s doors.
This balance of power is therefore extremely precarious, but Bangladesh, on its part, is not too concerned with game theory. The South Asian country is rather worried about its poor energy supply, which since 2014 has affected over 100 million people with numerous blackouts due to the lack of appropriate and avant-garde infrastructure. In this sense, China’s promptness to invest in Bangladesh keeps attracting local authorities. However, the Bangladeshi government understands that it should never anger one or the other. As Dr. Saha, a professor in Public Administration, stated in an interview, “It is very important for Bangladesh to keep both countries happy by providing the same business opportunities for Indian and Chinese companies that have vested interests in Bangladesh.” This way, it would ensure a prosperous development of Bangladesh without necessarily taking on a difficult diplomatic position that will eventually compel Bangladeshi to choose who to stand with.
This, however, does not necessarily imply China-Bangladesh relations are win-win. In fact, there may be high costs to the significant investments China is carrying out in the South Asian country. Recently, for example, China has announced the tariff exemption for 97% of Bangladeshi exports. This deal, valid since July 1st 2020, was made because Bangladesh is a major importer of Chinese goods but, on the contrary, China has a very low record of importing goods from Bangladesh. This certainly is an attempt to try making this relationship equal, but thinking an economic giant invests billions in one’s home without asking for anything back might be unrealistic. Experts are particularly worried the public debt of Bangladesh may only be deepening. As discussed from a previous Modern Treatise article on Sri Lanka, the latter had not been able to repay the debts for the construction of a Chinese-funded port, ending up leasing it to the Chinese owned enterprise for 99 years. This could easily happen in Bangladesh too, considering its impossibility to keep up with global development and provide for the local population on its own. This would mean to have a stable and settled powerful community of Chinese tycoons in the country.
While this is a high risk, Bangladesh has little option but to act carefully when dealing with Chinese investment. The strategies it has been taking part in are overall beneficial to Bangladesh, but some of them may be immediate rather than sustainable. Bangladesh may need to think ahead and question the role it would prefer to have in the region decades from now.
