The meeting held on March 28, 2025 between Bangladesh Interim Government leader Yunus and Chinese President Xi Jinping, marks an important diplomatic event with far reaching implication for South Asian geopolitics. As Bangladesh balances its relationship with regional powers post Hasina, this bilateral engagement underscores the importance of evolving political situation. Historically, the diplomatic relations between Bangladesh and China has evolved considerably over five decades, characterized by growing economic cooperation and trade volume increasing from $ 12 Billion in 2018 to approximately $25 Billion by 2024. The Bangladesh – China relationship gained significant momentum when Bangladesh officially joined the China’s Belt & road initiative (BRI) in 2016 followed by a visit of Xi Jinping to Dhaka. This partnership marked the beginning of substantial Chinese investments in Bangladesh’s major infrastructure projects, such as the Padma Bridge Rail Link Project, the Karnaphulli Tunnel, and several energy infrastructure projects, like the Payra Power plant, etc.
Bangladesh Perspective of the Meeting
From Yunus’s standpoint, the meeting was a calculated move aimed at securing China’s backing for the interim government and reinforcing economic cooperation. Establishing legitimacy and securing economic alliances for the interim government was very much needed following the political transition marked by Sheikh Hasina’s resignation.
Yunus approached the talk with the intention of tackling Bangladesh economic challenges by attracting heightened investments from China, particularly in major sectors like manufacturing and infrastructure. Manufacturing forms the backbone of Bangladesh’s economy, particularly the textile industry which contributes a substantial export earning to the country. Therefore, encouraging Chinese firms to invest in this sector can boost production efficiency and diversify the export basket. Meanwhile, infrastructure developments remains essential for sustaining long – term economic momentum and Chinese involvements in this can ease out the existing infrastructure constraints.
His agenda also involved advocating for more favorable loan conditions, such as removing commitments fees tied to Chinese- funded projects and reduced interest rates. Like many other countries to fund the developing projects, Bangladesh too relies on external financing. Therefore, by negotiating for more favorable loan terms, Yunus aimed to reduce the financial burden on Bangladesh by ensuring the sustainability of its debt. This reflects Yunus’s broader strategy to minimize potential risks associated with debt accumulation .
Yunus also positioned Bangladesh as an appealing destination for Chinese manufacturing firms exploring relocation options, potentially mitigating the effects of tarrifs imposed by the United Stated on Chinese products. Many Chinese manufacturing companies are seeking alternative locations to relocate their position amidst rising labor costs and trade tensions. By attracting Chinese firms to relocate to Bangladesh due to its competitive labor costs and advantageous geographic position, Yunus sought to create employment opportunities, boost industrialization, and drive economic growth. These efforts by Bangladesh reflect a strategy to leverage international partnerships, achieve sustainable economic developments and enhance country’s regional standing.
Significance of this Meeting for India
Yunus’s decision to visit China ahead of the BIMSTEC summit, suggests a potential recalibration of Bangladesh’s foreign policy priorities. Traditionally, India has been a key ally of Bangladesh, especially during the leadership of Sheikh Hasina. However, with the change in the leadership in August 2024, there are clear signs of a strategic shift marked by efforts to broaden Bangladesh diplomatic relations with China.
Tensions between India and Bangladesh emerged with India’s remark on Bangladesh’s internal affairs – which include the treatment of minorities, the release of certain alleged extremists and the country’s broader regulation and order situation. In Bangladesh, these were perceived as unwarranted and undue interference in another country’s domestic matters, leading to distrust and therefore promoting partnership and reassurance from other regional and global powers for economic support. A prime example of this is Bangladesh’s receptiveness to Chinese involvement in the Teesta River project, which was once under consideration for joint collaboration with India. While India has expressed willingness to support a large-scale development on this river project, tangible progress has remained elusive. In contrast, China’s willingness to assist in the project has been met with a warm response from Dhaka, signalling a shift in strategic choices to achieve critical national goals.
The deepening of alliance between Bangladesh and China also raises several security considerations for India. One of the Primary concerns is China’s growing military presence in Bangladesh, specifically in the military hardware sector which accounts for approx. 72% of Bangladesh imports between 2019-2023. These imports consists of weapon systems like submarines, anti – ship missiles and naval guns, permitting Bangladesh to strengthen its presence in the Bay of Bengal. In addition to supplying arms, China has helped Bangladesh to build key naval infrastructure. The prime example of this is the contribution of the BNS Sheikh Hasina Submarine Base close to Chittagong, which was inaugurated in 2023. Another key concern for India is increased instability along the India- Bangladesh border and the rise of religious radicalization in Bangladesh, coupled with the influx of illegal immigrants into India, poses a threat to India’s internal security.
Therefore, China’s growing influence in Bangladesh poses a significant security concern for India, demanding a recalibrated approach to ensure regional stability. Whether its water sharing dispute, trade imbalance, strengthening of economic ties, connectivity projects, joint venture, investments or sub regional initiative in Bangladesh- India needs to adopt a nuanced and proactive strategy to address all these concern and to maintain its influence and relevance in the evolving geopolitical landscape of South Asia.
