Geopolitics in focus as PM Hasina arrives in China

Prime Minister Sheikh Hasina was received at the Beijing Capital International Airport on 8 July 2024, at the presence of chain Chinese prime ministerPID

Prime minister Sheikh Hasina will be holding separate meetings with Chinese president Xi Jinping and prime premier Li Qiang on Wednesday in a fresh perspective.

The bilateral relationship between Bangladesh and China has elevated to a new level over the past decade as Bangladesh joined China's Belt and Road Initiative (BRI) while China has financed various mega projects including Padma Rail Bridge and Bangabandhu Tunnel projects.

However, this time the meetings between the top leaders of two countries at Beijing’s Great Hall will not be limited to the issue of bilateral relationship. Geopolitics and geo-economy will relevantly get importance amid the changing regional and global perspectives.

Diplomatic sources said economic cooperation will get priority as usual during the bilateral talks between the prime ministers of two countries. However, announcement on elevating a ‘close strategic partnership’ may come as a qualitative change in overall relationship. Beijing may also clarify its role on the large-scale economic journey through China’s involvement in the coordinated development in the southern region of Bangladesh.

It was scheduled in advance that prime minister Sheikh Hasina would visit China after her India visit. China’s proposal on the recent much-talked-about greater Teesta project is not progressing for the time being because India has already expressed interest in transboundary rivers and announced sending a technical team.

In addition to the Teesta project, China was more interested in the involvement of Bangladesh in the Global Development Initiative (GDI), one of the major plans formulated by Chinese president Xi Jinping.

Both countries were even prepared to sign a memorandum of understanding (MoU) on it during Sheikh Hasina’s visit, but Bangladesh all of a sudden backtracked from the GDI in the last week of June.

Prime Minister Sheikh Hasina arrived in Beijing on Monday afternoon. She is scheduled to hold a bilateral summit with Chinese premier Li Qiang at the Great Hall of the People on Wednesday morning and meet Chinese president Xi Jinping in the afternoon.

The prime minister's 91-member entourage includes finance minister AH Mahmood Ali, foreign minister Hasan Mahmud,

The prime minister's entourage includes adviser to the prime minister on private industry and investment Salman F Rahman, state minister for power, energy and mineral resources Nasrul Hamid, state minister ministry of posts, telecommunications and information technology Zunaid Ahmed Palak and state minister for commerce Ahasanul Islam Titu. A separate 59-member business delegation is also in China on this visit.

Future of GDI

When Chinese foreign minister Wang Yi visited Dhaka in 2022, China requested Bangladesh to join in two global initiatives -- the Global Development Initiative and the Global Security Imitative (GSI), launched by president Xi Jinping. Later, China sent the necessary documents to Bangladesh to sign memorandum of understanding.

Dhaka, however, conveyed a message to Beijing at the beginning that they were reluctant to sign GSI. Bangladesh showed interest in GDI but decided to take time before signing anything. China was also interested that Bangladesh at least joining the GDI associate forum if the country inks no MoU. Even China invited Bangladesh to the ministerial meeting of GDI last year. China requested Bangladesh to sign the joint statement after the meeting, but Bangladesh did not sign it due to strategic reasons.

A senior government official said China may at last use GDI as the bargaining chip for $5-billion loans. If China provides loans accepting the terms and conditions of Bangladesh, in that case, Dhaka might announce its participation in GDI through the joint statement at the last moment.

Diplomatic observers said there are not many obstacles for Bangladesh to join GDI as it is mainly a development-centric initiative, but there is doubt over how much Bangladesh can negotiate over it to secure loans from China.

President of the Bangladesh Institute for Peace and Security Studies (BIPSS) Major General (retd) ANM Muniruzzaman told Prothom Alo that the prime minister’s ongoing visit is not confined to just bilateral issues. This visit would feature the strategic conflict between China and US and its allies in different parts of the world including the Indo-Pacific region. As a result, Bangladesh will have to take into consideration this new reality to maintain a balanced relationship. Bangladesh will face a stiff challenge in gaining economic leverage from China while safeguarding its own interests. Bangladesh will have to advance keeping its own interest in mind defying pressures from all quarters.

Teesta not on the agenda

The fate of Teesta water sharing has been in limbo since 2011. After a bilateral meeting in Delhi in 2017, the PM Hasina and her Indian counterpart Narendra Modi announced that Teesta water sharing agreement would be inked during their respective tenures. The agreement is yet to see light. In the wake of the situation, Bangladesh in 2019 conducted a survey for a mega-project on Teesta.

After the completion of the survey, Bangladesh proposed to China to finance the project, which the latter acquiesced. China gave a proposal to fund the project. Since 2020, India has been expressing its reservations about China's interest in the project. Bangladesh and China held discussions on the project several times and even amended the proposal.

China expected to get a positive thrust on the project after the last general election. But the discussion from Bangladesh’s side has stalled in the last several months while the Chinese expectation to fund the project has all but bleak after PM Hasina’s recent India visit. The Teesta water management issue is not even on the table in this visit.

Asked about the issue, the foreign minister Hasan Mahmud on Wednesday told journalists that the Teesta issue would be discussed only if China broaches the issue. He said India has already given Bangladesh a proposal on water management of transboundary rivers, which Bangladesh will consider.

Fate of China’s loans

While China focuses on Teesta and GDI, the major priority of Bangladesh so far is a loan facility of USD 5 billion from China.

Diplomatic sources said discussions are focused more on the period of repayment of loan and grace period more than the issue of interest rate. Bangladesh wants the loan repayment period of at least 30 years and grace period of at least 10 years. The Chinese side wants a loan period of 20 years and grace period of five years if the interest rate is 1 per cent. If the loan repayment period remains 30 years and grace period 10 years as per Bangladesh’s wish, China wants the interest rate to be 2 per cent. Discussions on this point at an official level saw no headway, but progress is not unlikely at political level.

The interest rate of the erstwhile Chinese loans had more or less two per cent. The rate of interest is almost similar for loans of the World Bank, Asian Development Bank, JICA and other development organisations. But the repayment time for organisations such as the World Bank or JICA is usually 30-40 years.

The tenure of Chinese loans is less in comparison. Excluding five years of grace period, usually the recipient sides get 10-15 years to pay the whole loan. As a result, bigger installment creates pressure while repaying the loan.

Former diplomat and research organisation Bangladesh Enterprise Institute’s (BEI) president M Humayun Kabir told Prothom Alo China is under pressure on the global stage over One China Policy, South China Sea, Taiwan and trade. As a result, China will strongly seek Bangladesh support. An so the purview of the PM’s visit extends beyond bilateral issues.

This report appeared in the print and online editions of Prothom Alo and has been rewritten in English by Hasanul Banna and Galib Ashraf