Sino-India War: China Bags Bangladesh In Chinese Side

Key Points

  • Trade volume between Sino-Bangla amounted to $14.68 billion in fiscal 2019
  • Bangladesh imported $13.86 billion of goods from China, but it exported only $831 million to China
  • A total of 8,256 goods from Bangladesh will be exempted of Chinese tariffs
  • Bangladesh is the second largest user of Chinese arms

China has provided a huge trade boost to Bangladeshi businesses by granting duty-free access to a total of 97% of Bangladeshi imported products, effective July 1.

Bangladesh’s Foreign Ministry said the measure was approved by the State Council of the Chinese Finance Ministry.

All About Timing

Friday’s announcement is expected to help Bangladesh cushion the economic impact of the pandemic and also emerge as a possible beneficiary alongside Vietnam and Chile of the U.S.-China trade war.

Amid tensions between China and India, Chinese communist party leaders and policy makers always kept Chinese interest at heart promoting arms deal under the cover economic development. China has surrounded India by promoting Chinese-backed government in Bangladesh, Sri Lanka, Myanmar, Nepal, Maldives and Pakistan through political donations and interferences. Tariff examption for Bangladesh is another example that would irk India.

Trade Imbalance Favors China

Bangladesh has a huge trade imbalance with China. The Federation of Bangladesh Chambers of Commerce and Industries said the trade volume between the two countries amounted to $14.68 billion in fiscal 2019. However, while Bangladesh imported $13.86 billion of goods from China it exported only $831 million to China.

“We still import more than [we] export from China, [the new tariff exemptions] will create more possibilities to minimize the trade deficit,” said Obaidul Azam, a senior official at the Bangladeshi Commerce Ministry.

Mohammed Touhidul Islam, senior information officer of the Ministry of Foreign Affairs said Bangladesh “already receives tariff-exemption for 3,095 items under the Asia Pacific Trade Agreement. As a result of the latest announcement, a total of 8,256 goods from Bangladesh will be exempted of Chinese tariffs.”

The decision emerged only one month after Bangladesh Prime Minister Sheikh Hasina and Chinese President Xi Jinping held a discussion to upgrade their bilateral relations during the pandemic.

China, A Friend With Sinister Intentions

Joyeeta Bhattacharjee, senior fellow at the Observer Research Foundation, an independent think tank based in India, noted that China has been deeply involved in Bangladesh, most recently offering help to alleviate the covid-19 pandemic.

Bangladesh has recorded at least 100,000 covid-19 cases, though the actual figure is believed to be much higher.

Debt Traps

China has also offered to invest about $24 billion in Bangladesh, under terms of the Belt Road Initiative, Beijing’s massive global infrastructure development strategy.

One of China’s most important ongoing infrastructure projects in Bangladesh is the Padma Bridge – which, when completed, is expected to link almost 30 million people in Bangladesh’s southwest to the rest of the country, and increase regional trade and collaboration.

The multipurpose road-rail bridge is being built across the Padma River and will eventually be the largest bridge in Bangladesh.

The bridge will be about four miles long and cost nearly $4 billion.

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