Chinese president Xi Jinping addressed a high-level symposium on the Belt and Road Initiative (BRI) in Beijing on November 19, 2021. While addressing the symposium, president Xi asserted that the BRI should aim for high-standard, sustainable, and people-centered progress. China has signed cooperation documents on jointly building the Belt and Road with 140 countries and 32 international organizations, as the BRI was proposed by president Xi in 2013.
Bangladesh is one of the most important members of the BRI. Some questions remain pertinent, however: Why does China make such advocacy arrangements at the present moment? What are the main aspects of the new developments of the BRI? How could the new developments influence the BRI? What are the implications of the BRI for Bangladesh?
Some believe that the BRI will dramatically expand Beijing’s influence in the world, particularly in China’s neighborhood. Others feel the BRI will be hindered by many insurmountable challenges, and its failure is almost guaranteed.
Bangladesh and China established official diplomatic relations in the 1970s. Since then, the bilateral relations have grown significantly stronger over the years. Today, China is more deeply involved in Bangladesh than it has ever been.
The BRI involves countries spanning Central Asia, South Asia, Southeast Asia and Oceania, Central and Eastern Europe, West Asia, and North Africa, over 900 projects, and close to $1 trillion as of mid-2018 (Yuan, 2019). The strategy of the BRI, a historically integrated concept in China’s periphery policy, is a well thought-out global and grand strategy that the Chinese leadership has formulated to reclaim its geopolitical dominance in Asia, and to fulfill the goal of the China dream.
As a policy-oriented initiative, the BRI has great potential to benefit many lower- and middle-income developing countries that are not adequately served by existing infrastructure, and are strapped for new investment (Rana & Ji, 2020). The BRI intends to build connectivity and cooperation across six main economic corridors: (1) New Eurasia Land Bridge; (2) China-Mongolia-Russia (CMR) Economic Corridor; (3) China-Central Asia-West Asia Economic Corridor; (4) China-Indochina Peninsula (ICP) Economic Corridor; (5) China-Pakistan Economic Corridor; (6) China-Bangladesh-India-Myanmar Economic Corridor.
The BRI aims to establish cooperation in five major areas: Trade and investment facilitation; policy coordination; infrastructure development and connectivity; financial coordination and integration; and people-to-people ties and connectivity. The BRI consists of the following two components:
- Land-based: The Silk Road Economic Belt (SREB)
- Sea-based: The Twenty-First Century Maritime Road Initiative (MSRI)
China started the construction of high-speed rail in 2008, and ranks first in total operating mileage in the world up till now. The construction of high-speed rail improves geographical proximity by reducing the travel time and cost between areas.
In other words, the rail connections under the BRI serve the national interests of China.
As an unprecedented endeavour to develop a social and economic nexus that connects China and the rest of the world, in November 2014, Xi Jinping, the Chinese president, announced plans to create a $40bn Silk Road Fund to support private businesses investing in the BRI projects. Several institutions and organizations such as the Asian Infrastructure Investment Bank (AIIB), the Shanghai Cooperation Organization, and the New Development Bank etc have been created to finance the different projects of the BRI. Basically, there are five types of financial resources in China supporting BRI construction. They are pure aid, preferential loans, development finance, commercial loans, and various special funds.
Areas of Bangladesh-China cooperation
The BRI expands the horizons of connectivity, trade, and infrastructure in Bangladesh. The Chinese economy is also expected to exceed US economy and account for 25% of global economy by 2050.
Trade and investments: During president Xi’s 2016 official visit to Bangladesh, China promised about $40 billion investment in Bangladesh. A total of $24.45 billion was in bilateral assistance for infrastructure projects, and $13.6 billion in joint ventures. In addition, USD 20 billion in loan agreements was committed. To counter Beijing’s initiative, the Indian government provided a $5bn line of credit and other economic assistance to Bangladesh during Prime Minister Sheikh Hasina’s visit to New Delhi in April 2017.
Bangladesh has now become China's third-biggest trade partner in South Asia, while China is the largest source of Bangladesh's imports (DCCI 2016). The trade volume reached from $913.4m in the year 2000 to $14,708.5m in 2018; around 16 times more than that of 2000.
Bangladesh has a huge trade deficit with China. It is mentionable that China imported goods worth $2.4tn in the 2019-20 fiscal year, and Bangladesh's share was very insignificant (0.05%). A report in the China Daily indicates that in the next 10 years, China is expected to import a total of $22tn worth of goods.
Bangladesh’s major export items, ready-made garments and others including leather goods, jute and jute goods, agricultural products, frozen and live fish, pharmaceutical products, plastic, sports goods, handicrafts, and tea have a strong competitive edge in the international market. China has provided duty-free access to 97% of Bangladeshi products (a total 8,256 products) since July 2020. China has vast consumers for such products. Bangladesh would need to study the changing preferences and perceptions for the Chinese consumers and grab the opportunities for exports to the Chinese market.
So the countries could initiate some innovative programs to minimize the deficit and boost up bilateral trade and investments.
BCIM tourism: The coronavirus pandemic has caused irreparable damage to the worldwide tourism sector. Tourism is often regarded as a key driver of growth in emerging economies. It is vital for the economic growth of underdeveloped countries. The Bangladesh-China-India-Myanmar Economic Corridor (BCIM-EC) intends to connect Bangladesh, China, India, and Myanmar. The BCIM-EC seeks to build a 2,800km economic corridor connecting 20 major BCIM cities and towns, starting in Kolkata, West Bengal, and ending in Kunming, China's Yunnan Province, via Bangladesh's Jessore, Dhaka, and Sylhet; Manipur's Imphal and Assam's Silchar; and Myanmar's Ka Lay, Monywa, Mandalay, Lashio, and Muse. This sub-region may become a regional center for tourism, developing markets, agro-food, and inter-cultural exchange. The BCIM-expansion EC's will help tourism.
Bangladesh offers several tourism spots. Cox’s Bazar, for example, has a 120km-long sandy, straight, and drivable beach. Teknaf (Bangladesh's southernmost point), Ramu, Sonadia, Himchhari, and St Martin Island are all within easy reach of Cox's Bazar. The Chittagong Hill Tracts (CHT) are also rich in natural resources and beauty, especially Rangamati, Khagrachari, and Bandarban. The BCIM-EC has the potential to build a regional energy grid through cooperative use and development of water and natural resources, such as gas. The BCIM-EC may facilitate economic cooperation, commerce, investment, and tourist growth. The BCIM-EC has a lot of potential, as it covers 40% of the world's population and has a combined GDP of almost $14tn.
Defence: Bangladesh's President Abdul Hamid met with visiting Chinese State Councilor and Minister of National Defence, Wei Fenghe, in Dhaka, Bangladesh, on April 27, 2021. During the meeting, our president said Bangladesh and China are time-tested friends and reliable strategic cooperation partners.
Energy: As an emerging global power and the world’s second largest economy, China’s energy consumption has been rapidly growing over the last two decades. China’s growing need for energy and its dependence on international trade makes the region of South Asia a sphere of great interest for China.
South Asia is a very significant region for China to facilitate its trade and energy corridors throughout the region that China can access. Dependence on foreign energy poses a number of challenges to China’s energy security. Around half of the oil imported to China, for instance, is from the Middle East -- a region plagued with instability and terrorism. Although the Chinese government has managed to diversify its oil import sources, unstable regions including the Middle East and Africa are still dominant sources of China’s imported oil. Therefore, China intends to encounter the Strait of Malacca dilemma through the routes of the BRI countries.
Constraints and challenges
The debt trap diplomacy is often projected as intended to exert undue political influence over sovereign nations that borrow from China under the BRI. However, there is no consensus among scholars on the question of debt trap diplomacy. Several global and regional players such as the US, Japan, India, and Australia are apprehensive of the real intentions of the BRI, because of its ambiguity, lack of transparency, lack of consultation with the relevant stakeholders, and growing military presence in the Indian Ocean, Asia Pacific, Indo-Pacific, and the South China Sea.
The BRI projects have adverse impacts on the global environmental and climatic issues. The lack of coordination is also a major hurdle to the BRI projects. Another issue of contention is the geopolitics centering on the trade disputes between the US and China. The outbreak of Covid-19 is one of the biggest problems causing the decline of China’s image at the global stage. The virus may hinder the growth of the BRI. China has developed networks of global trade, investment, and financial integration.
The BRI is a manifestation of the global emergence of China. The changing nature of the BRI population dynamics, production forces, trade networks, and consumptions could merit future scholarly attention. However, until now, there is still not enough research being done on how the Covid-19 pandemic has affected the global trading environment.
Saleh Shahriar, PhD is an Adjunct Assistant Professor at the Department of History & Philosophy, North South University.
