Md Mazadul Hoque: China, known as the world’s second largest economy, is gradually approaching with its Belt and Road Initiative ( BRI) initiated by Chinese visionary president H.E.Xi Jinping IN 2013. China gives top priority to neighboring countries in its foreign policy and pursues amity, sincerity, mutual benefit and inclusiveness in building relations with them. BRI is undoubtedly ambitious project in the world. As of June, 2023, China has signed more than 200 cooperation documents on Belt and Road cooperation with 152 countries and 32 international organizations. The move definitely helps them speeding up their economic development. It is to be noted that Bangladesh is the first country in South Asia that joined BRI.
In today`s world, the way of doing business is changing fast. Economic corridors as a vehicle of trade expansion are drawing much of the attention these days. It is easier to enter international markets through economic corridors. Four Asian nations, Bangladesh-China-India-Myanmar signed an agreement to inaugurate economic corridor known as BCIM-EC. However, Bangladesh is lucky enough that China never ignored the country in this particular arena. Certainly, the pace of economic growth largely depends on infrastructure development and China is supporting it in many ways in this connection.
The countries belonging to BRI project are in three continents and they are home to 4.4 billion people who will enjoy benefits of the trillion dollar BRI projects. The economies under OBOR constitute around 40 per cent of global gross domestic product (GDP). Xi Jinping launched both the Silk Road Economic Belt and the 21st Century Maritime Silk Road initiatives under OBOR in 2013. The objective of the New Silk Road initiative is to develop connectivity apart from support in infrastructure development in a bid to improve trade and economic relations with the ASEAN, central Asian and European countries..
There are six economic corridors under OBOR. They are: (1) New Eurasia Land Bridge (NELB); (2) China-Mongolia-Russia (CMR) Economic Corridor; (3) China-Central Asia-West Asia (CAWA) Economic Corridor; (4) China-Indochina Peninsula (ICP) Economic Corridor; (5) China-Pakistan (CP) Economic Corridor, (6) China-Bangladesh-India-Myanmar (BCIM) Economic Corridor. Besides, China came up with large chunk of investment package in a bid to develop ports infrastructure. In the last decade, China made investment in nine sea ports belonging to different countries. The ports, which came under Chinese investment, are Colombo and Hambantota port of Sri Lanka, Gwadar port of Pakistan, Mombasa and Lamu port of Kenya, Port of Djibouti, Pireas port of Greece, Antwerp port of Belgium.
It is to be noted that BCIM economic corridor, one of the major routes under BRI, runs through Bangladesh. Actually, it connects China`s Yunnan province with Bangladesh, Myanmar and Kolkata in India through road, rail, water, and air links. Through the BCIM economic corridor, the trade volume of Bangladesh in the region will increase many times. The BCIM, endorsed during the first inter-governmental study group meeting in Kunming in December 2013, targets better regional integration, connecting the sub-regions of South Asia, Southeast Asia and East Asia. It is expected to change the infrastructure development landscape of Bangladesh within the shortest possible time.
Some Memorandum of Understandings (MoUs) were signed between Bangladesh and China in presence of Chinese President Xi Jinping in 2016 during his short stay in Dhaka. China promised to invest about $40 billion in Bangladesh. An amount of $24.45 billion was in bilateral assistance for infrastructure projects and $13.6 billion in joint ventures. In 2016, Bangladesh and China signed deals on eight projects costing more than $ 9.45 billion financed by China. Of the eight, the Padma Bridge rail link project involves $ 3.3 billion, the power plant project in Payra $1.9 billion, digital connectivity project $1.0 billion and the power grid network strengthening project $1.32 billion. From 2009 to 2019, China made investments worth $9,750 million in various transportation projects in Bangladesh. Around 56 per cent of China`s total investment was made in the energy sector in Bangladesh.
Bangladesh`s energy and transportation sectors need huge investments in order to achieve economic targets set in the second Perspective Plan 2021-2041. Investments to the tune of around 1.5 per cent and 1.0 per cent of GDP respectively will be needed by 2040 in these two sectors. It is gratifying to note that BRI projects are linked with energy and transportation sectors in Bangladesh. The BRI projects will help bridge the infrastructure gap. Besides, the BRI projects are focusing on cultural exchange between China and Bangladesh.
The Chinese nationals, who are widely known as business conglomerates in Bangladesh, are trying their level best to tighten business relations between the two nations. Currently, more than six ( 06) hundred Chinese enterprises are in Bangladesh, that are really doing encouraging works for betterment of the two nations. Happily saying that most enterprises are the members of Chinese Enterprises Association in Bangladesh ( CEAB). Furthermore, another platform named “ Bangladesh China Chamber of Commerce and Industry ( BCCCI) is actively engaged in displaying Chinese contribution in Bangladesh. Recently, CEAB and BCCCI jointly organized China-Bangladesh Business Excellence Award 2023 where a number of 27 business groups of Bangladesh and China was awarded. The gala program signifies that economic activities between the two nations are expected to rise in the days to come. Chinese enterprises are playing a vital role in developing and upgrading infrastructures in Bangladesh. The Padma Bridge, Karnaphuli Tunnel, Padma Bridge Rail Link, Dasherkandi STP, Single Point Mooring, Tier IV National Data Center, Patuakhali 1320 MW power plant are contributions of Chinese enterprises. There is a plan of giving assistance in the area of renewable energy, ICT, green infrastructure from Chinese enterprises. Under the rule of current CEAB president Mr Ke Changliang, China became more focused to the Bangladeshi policymakers and business conglomerates for showing his outstanding leading and performances.
If Bangladesh is able to make investment worth $20 billion in infrastructure development, around $300 billion is expected to be injected into its economy by foreign entrepreneurs in the next 20 years. Vietnam spent about 10 per cent of its GDP on infrastructure development over the past one decade. In the last five years, Vietnam had been able to attract $60 billion in FDI compared to Bangladesh`s $3-4 billion. So there is no alternative to infrastructure development. The under-construction special economic zones would provide a great relief for Bangladesh in attracting FDI in near future. So, financial assistance from China-led BRI project should be utilized properly and timely. In absence of China’s assistance, it would be tough for Bangladesh to see economic growth. The countries in Asia region have been struggling for financial support for a long period in respect of infrastructural development. The Asian Development Bank estimated that the region faces a yearly infrastructure financing shortfall of nearly $800 billion. If Asia region is being funded more for infrastructure development from BRI project, the region must be able to expand its intra-trade volume in coming years. China’s engagement in business world is timely demand. Since 2026, the year of joining BRI, trade volume between China and Bangladesh has increased from 15.3 billion dollar in 2016 to 27.8 billion dollar in 2022. It is estimated that BRI will help Bangladesh’s real GDP growth by at least 2.1 per cent. BRI is expected to reduce extreme poverty by 1.3 per cent by generating additional 5.1 per cent employment. In getting poverty and hunger free Bangladesh in 2041, BRI is good enough among others projects.
Author: Md Mazadul Hoque is Director ( Research) of Centre for East Asia Foundation. mazadul1985@gmail.com.