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How China's Belt and Road changing Bangladesh's infrastructures


Dec 31, 2010
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How China's Belt and Road changing Bangladesh's infrastructures


Abbas Uddin Noyon
01 October, 2023, 12:15 pm
Last modified: 01 October, 2023, 12:57 pm

How China's Belt and Road changing Bangladesh's  infrastructures

From road to rail to seaport and airport, under-river tunnel to elevated expressway, water utility to e-governance, coal to solar energy, China makes its presence felt everywhere in Bangladesh with funds, technology, and expertise.

According to an estimate by the American Enterprise Institute (AEI), a US think tank, the total investment from China in Bangladesh is $7.07 billion. In addition, Chinese companies have received construction contracts worth $22.94 billion in different sectors.

In the last 10 years, China has released $4.45 billion for 35 projects under the Belt and Road Initiative (BRI), said Chinese Ambassador to Bangladesh Yao Wen.

At a recent programme in Dhaka, the Chinese envoy said the BRI investments in Bangladesh are contributing to the improvement of people's living standards.

China is implementing 21 bridges and 27 power projects in Bangladesh. Around 670 Chinese companies have invested in the country. China will participate in many of Bangladesh's 100 economic zones.

Apart from the government, Bangladesh's private sector has also taken loans from China. According to data from the Bangladesh Bank, the status of Chinese loans in the country's private sector is slightly higher than $2.33 billion. The majority of the loans go to the power and energy sector.

BRI fuelled investment
Chinese President Xi Jinping launched both the Silk Road Economic Belt and the 21st Century Maritime Silk Road initiatives in 2013. Afterwards, these together were termed the Belt and Road Initiative.

The initiative's objective is to build connectivity and cooperation across six main economic corridors, including the Bangladesh-China-India-Myanmar (BCIM) Economic Corridor.

During President Xi's visit in 2016, a number of Memoranda of Understanding (MoUs) and agreements were signed between Bangladesh and China. Under the BRI, Bangladesh will receive $26 billion for BRI projects and $14 billion for joint venture projects, totalling a $40 billion package.

Bangladesh has primarily seen BRI projects in the energy and transportation sectors, with infrastructure investment needs projected to reach 1.5% of GDP by 2040.

"The 12 highways and 21 bridge projects, symbolised by the Padma Multipurpose Bridge, serve as extensions of the modern-day 'Silk Road' within Bangladesh," Yao Wen said at an event in Dhaka organised to mark the 10th anniversary of the BRI.

He highlighted 27 power and energy projects, municipal initiatives, manufacturing, and agricultural ventures as "lighthouses" guiding the enduring cooperation between the two nations.

China has significantly contributed to Bangladesh's road transport infrastructure, including the impressive Padma Bridge and the ground-breaking Bangladesh Karnaphuli River Tunnel Project.

Notable road and bridge projects include the Paksey Bridge, Bangladesh-China Friendship Bridge, Dhaka Bypass, Dhaka-Khulna (N8) Project, Dhaka Elevated Expressway, and Dhaka-Ashulia Elevated Highway Project.

Additionally, there are seven railway lines, including the Padma Bridge Rail Link Project, the Tongi to Bhairab double-track line, and the Dohazari to Cox's Bazar Railway.

Chinese enterprises have played a significant role in 27 power and energy projects; their investments span diverse energy fields, including coal, solar, and wind power plants, thus promoting a diversified energy mix. Notable projects include the Payra 1320MW ultra-supercritical coal-fired power plant.

Among the BRI projects, the most notable are the Dasherkandi Sewage Treatment Plant Project in Dhaka, the Single Point Mooring (SPM) with Double Pipeline Expansion project at Maheshkhali, and Cox's Bazar Airport.

Abdur Razzak, chairman of the private research organisation RAPID, said, "There are 70 countries under the BRI. We want to benefit from this investment. We have a lack of infrastructure. More development is needed in that area. China has maintained its position in world trade. We have to utilise this opportunity."

He also said the country's GDP will increase by 2% to 4% if $10 billion is invested in the BRI projects. If the project is implemented globally, Bangladesh's commercial expenses will decrease in 75 countries.

Job creation and beyond

Ke Changliang, president of the Chinese Enterprises Association in Bangladesh, which includes over 670 Chinese firms operating in various sectors.

In the EPZ area, about 25% of investors are Chinese; so far, these enterprises have created approximately 600,000 employment opportunities for Bangladeshis, he added.

In recent times, the investment of Chinese companies in Bangladesh has increased significantly.

According to the Bangladesh Investment Development Authority (Bida), at least 15 Chinese companies have brought direct investment to Bangladesh in the last year alone. Besides, another $1.5 billion worth of FDI proposals came last year.

Data from the Bangladesh Bank shows the country's yearly growth in FDI from China stood at 13.5%. In 2015, FDI from China was only $56 million, which in seven years has increased 11.5 times.

"We are tirelessly working to bring in big investments from China, and we are getting good responses," said Lokman Hossain Miah, executive chairman of Bida.

Bangladesh will see increased investment in the textile and clothing sectors in the coming days as the business environment has marked tremendous improvement in recent years, said Calvin Ngan, president of the Overseas Chinese Association in Bangladesh (Ocab).

China a major trade partner

China is now Bangladesh's largest trading partner. The trade volume between the two countries is about $25 billion. Bangladesh mainly imports capital machinery and raw materials from China.

On the other hand, Bangladesh exports vegetables, frozen and live fish, leather and leather products, textile fibres, paper yarn and woven fabrics, garments, and apparel items to the country.

China implemented duty-free facilities on 97% of Bangladeshi products on 1 July 2020. Later, it was increased to 98%. The export of crabs and eels to China resumed last July. By exporting these two items, Bangladesh earns about $50 million a year from China.

Commerce Minister Tipu Munshi said, "China is Bangladesh's largest trading partner. Leather, ICT, and light engineering sectors can be potential sectors for Chinese investors.

Govt establishing special economic zone for Chinese firms

To give special benefits to Chinese investors, the government is establishing a special economic zone on about 783 acres of land in the Anwara upazila of Chattogram.

When the project is completed, it is expected that employment opportunities will be created for approximately two lakh people.

Shaikh Yusuf Harun, executive chairman of the Bangladesh Economic Zones Authority, said many Chinese companies have already shown interest in investing here.

Al Mamun Mridha, acting secretary-general of the Bangladesh China Chamber of Commerce and Industry, also said they are trying to bring large investments to the Chinese Economic Zone.

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