Chinese development cooperation uncertain!

Rabiul Haque: China has given a blind support in last election to Sheikh Hasina targeting to create an influence on Bangladesh, subsiding India. They have also given several commitments for huge investment, project and budgetary support, Teesta Project, etc. but the last visit of Sheikh Hasina to China has cleared that it was a stand to testify Sheikh Hasina over India issue, whether she supports China or India. China understands that Sheikh Haisna or her party Bangladesh Awami League never give up China over India. Rather Chinese Prime Minister has indicated to work with other political parties in Bangladesh.
Various analyzes are now going on about how much has been achieved through Prime Minister Sheikh Hasina’s much-discussed visit to China. A few days before the visit to China, various media and officials of Bangladesh had given the idea that this visit would be very important. Various media also reported about getting development cooperation and loans of $ 5 billion. However, China has only pledged one billion yuan in aid. There is disappointment in various circles about this.

According to sources, China has not provided any major financial assistance or loan assistance to Bangladesh in the past few years. In the last 12 years, the country has contracted a debt of only $ 107 billion. But the discount is more than half. And in the past more than a century, China has given Bangladesh only $1146 million yuan or about Tk 1800 million. Besides, Bangladesh was promised a loan of $24 billion in 2016, but only $5.5 billion received from it.
Incidentally, before Sheikh Hasina’s visit to Beijing, it was thought that some issues could be discussed with China from Bangladesh’s side. China may play a role not only in negotiations, but also in resolving Dhaka’s expectations on various issues. These include the Teesta project, the Rohingya issue, trade, investment and China’s debt to resolve the economic crisis.
Although the joint statement published by the two countries at the end of the visit, there is no mention of the Teesta Master Plan. Besides, there is no big promise from China in terms of trade, investment or infrastructure development. In this context, many people are trying to compare the achievements with the expectations of Bangladesh.
According to the Economic Relations Department (ERD), from January 2012 to last May, the loan agreement with China was $7.253 billion in12.6 years. Most of this is in the Chinese currency Yuan. The last loan agreement was in March 2023 for the RajshahiWasa water treatment plant construction project. China’s debt relief has been $3.86 billion in almost 12.6 years until last May. Of this, only $361 million were deducted in the 11 months till May of the last financial year. Earlier, in 2022-23 fiscal year, China’s loan waiver was $221 million.
There have been three summit tours between Bangladesh and China in the last decade. Prime Minister Sheikh Hasina visited China in 2014 and 2019. On the other hand, Chinese President Xi Jinping visited Dhaka in 2016. During Xi Jinping’s 22-hour visit in October that year, the two countries signed 27 agreements and memorandums of understanding (MOU). Under this, China pledged $24 billion in loans for 34 projects, most of which were to be used for infrastructure.
Although Bangladesh has not received even a quarter of that promise in the last 8 years. At this time, the loan agreement was signed for $5.61 billion. Apart from this, the process of China’s borrowing for the construction of Dhaka-Sylhet four-lane, Dhaka-Chittagong high-speed railway line, Dhaka-Chittagong expressway, Joydevpur-Ishwardi double line railway, Akhaura-Sylhet double line railway, Joydevpur-Mymensingh double line railway has progressed.
According to sources, Bangladesh sought a $ 5 billion loan from China to prevent the fall in foreign exchange reserves during the Prime Minister’s visit. The Governor of Bangladesh Bank, Abdur Rauf Talukder, had informed before the visit that the two parties are discussing this matter. He said this in an interview with Bloomberg.
The governor had said at the time that the loan would be denominated in the Chinese currency Yuan. Bangladesh can use this money to meet the cost of importing goods from China. However, loan negotiations are still at a technical stage; The final decision has not been made. The report also said that the debt issue is expected to be discussed during the visit of Prime Minister Sheikh Hasina to Beijing.
However, China has pledged only 1 billion yuan in financial aid, which is only a quarter of $1.4 billion. The stakeholders are very disappointed as the receipts are much less than the expectations. Although China has always been in the back row in terms of assistance to Bangladesh. The country has given only 1.146 billion yuan in grants to Bangladesh over the past century. Of this, the country last donated 500 million yuan in 2020.
On July 4, the Chinese ambassador appointed in Dhaka, Yao Wen, told reporters that Bangladesh has sought China’s help to reduce the shortage of reserves. Yao Wenalso indicated that the announcement may come during Prime Minister Sheikh Hasina’s visit. A day before that, Bangladesh Bank’s Governor Abdur Rauf Talukdar was quoted by the international media Bloomberg as saying that Bangladesh wants a loan of $5 billion from China. But Sheikh Hasina’s visit to China did not show any reflection of that.
According to the executive director of the Center for Policy Dialogue (CPD), Dr. Fahmida Khatun that ‘Bangladesh has not achieved anything economically. China has been providing a large economic support to Bangladesh for the past few years. From that point of view, it can be said that the expectations of the Bangladesh government before the visit have been disappointed. We have been saying that China is a development friend for Bangladesh. In fact, we have moved away from that position.
Former ambassador Humayun Kabir also thinks that the achievement is not very attractive in the light of expectations. He told, “Maybe we could not agree on many issues.” That’s why I don’t see much gain from economic point of view. Perhaps there has been a lapse somewhere in the recent understanding between the two countries. It is an expression that they are not happy with us.
Humayun Kabir also mentioned that earlier China had given big promises and funding but in the last one year no help has come, “The Chinese delegation came, the Chinese ambassador talked about financial help.” Chinese people don’t say things that don’t have substance. Surely the discussion regarding financial assistance had progressed up to a certain stage.’ He felt that it was not fruitful for some reason.
Incidentally, China has always given loans on strict terms. An analysis of the terms of loan agreements signed in the last 12 years shows that China’s loan interest rate is two to three percent. There is also a service charge of 0.20 to 0.25 percent. China offers a typical five-year grace period on 15-year loans. And almost all of the country’s debt is buyers’ credit.