Venkatesh Iyer

Bengaluru: Amid Sino-Indian border row, state-run Bangladesh Power Development Board (BPDB) and The People Republic of China’s Huadian Hong Kong Company Limited recently entered a 50:50 joint venture to set up a 1,320-megawatt plant.

Bangladesh PM Sheikh Hasina and Chinese President Xi Jinping.

The company will set-up a coal-based power plant at Moheshkhali Island in Cox’s Bazar district, around 260 miles South-East of Dhaka.

This is being seen as China’s attempt to woo Bangladesh after Nepal began to toe its line. But many have warned Dhaka against this ‘debt-trap’ laid carefully by Beijing, citing examples of how Sri Lanka, Malaysia and other countries have rejected Chinese overtures and cancelled projects for fear of losing their independence to Beijing.

In South Asia, Bangladesh is currently the third-largest trade partner of China as bilateral trade between the two countries has soared to US $10 billion.

Bangladesh is trying to strike a balance between India and China, but Beijing is encouraging Dhaka with a host of concessions to woo it. For example, The Tariff Commission of the State Council of Ministry of Finance, China, has offered to relinquish 97% tariff on 5,000 items favouring Bangladesh as a “Least Developed Country” (LDC).

This will change the status of 1.05 lakhs products as duty-free. Bangladesh for long has been seeking this concession from China. Beijing took the decision soon after the gruesome Galwan Valley clash between the Chinese and Indian forces in a clear indication of the reason behind it.

This concession is in addition to the already existing 3,100 products under the Asia-pacific Trade Agreement (APTA) to remove trade and tariff barriers from commodities imported from Bangladesh. This progress will lead to a deepening of ties in the Bangla-China relations.

Despite good neighbourly relations with India, Bangladesh is wary of New Delhi after the announcement of India’s National Registry Citizens (NRC) and the Citizenship Amendment Act, 2019.

However, China’s dubious offer of tariff concession has made some people smell the rat. Many Bangladeshis staged protests in Dhaka raising slogans against China as they feel their country is closer to India because of its social fabric and democracy.

Apart from trade, China and Bangladesh have also deepened support in the field of health. This week, a delegation of doctors from China’s National Health Commission attended a farewell after assisting Bangladeshi doctors for a fortnight during the Covid-19 pandemic. In May, Prime Minister Sheikh Hasina Wajed, in a telephonic conversation with President Xi Jinping, had described China as “the truest associate” of Bangladesh.

Bangladesh also has a defence treaty with China as Dhaka is dependent on Beijing for the supplies of arms. This has made the Bangladesh Army a great supporter of China which also trains them.

Taking advantage of this support, China has carefully sought Bangladeshi endorsement to  Beijing’s entry as an ‘observer’ into the South Asian Association of Regional Cooperation (SAARC), and also convinced Dhaka to join Beijing’s ambitious Belt Road Initiative (BRI).

Bangladesh is trying to reduce its dependence on India and open up newer boulevards of collaboration with China and other South East Asian countries. China sees in Bangladesh, having a population of 16 crore, a supplier of cheap labour and as an outsourcing destination for its manufacturing industries. This also gives Beijing a fillip to its increasing presence in South Asia.

But Bangladesh has an umbilical relationship with India. It is often termed as India’s backyard. Its strategic location ensures access to the Indian markets for its products. The dynamics of these relationships appear as interdependence on the surface, but are driven by long-term political, economic, cultural and strategic interests.