New Delhi: Amid the trade war with the US, the Export-Import (Exim) Bank of China has agreed to back Chinese private sector investments in Bangladesh, especially in the manufacturing sector, in a bid to use Dhaka as an export hub. The issue was discussed on the second day of Bangladesh interim government head Muhammad Yunus’s Beijing visit.
The development assumes significance since it comes in the backdrop of the Trump White House slapping steep tariffs on goods exported to the US from Chinese soil.
While the Chinese Exim Bank has previously financed Chinese infrastructure and energy projects in Bangladesh, this marks the first instance of it facilitating private sector investments in the country.
Chinese Exim Bank chairman Chen Huaiyu made the announcement Thursday during a meeting with Yunus on the sidelines of the Boao Forum for Asia Annual Conference 2025.
Chen Huaiyu, Chairman, The Export-Import Bank of China called on Chief Adviser Professor Muhammad Yunus at Bo'ao State Guest House, Hainan, on Thursday on the sideline of Bo'ao Forum for Asia Annual Conference 2025. pic.twitter.com/MGEnjY9Q8U
— Chief Adviser of the Government of Bangladesh (@ChiefAdviserGoB) March 27, 2025
While China is Bangladesh’s largest trading partner, exports remain low, with a trade deficit of $16.45 billion in the last financial year. China has invested heavily in Bangladesh’s infrastructure and energy sectors through the Belt and Road Initiative (BRI).
“Bangladesh can be complementary to China as far as manufacturing is concerned,” Yunus reportedly said during his meeting with the chairman of the Chinese Exim Bank.
Experts view Yunus’s invitation to top Chinese manufacturers to relocate their factories as part of a broader strategy to integrate Bangladesh into the global supply chain while providing significant incentives, including trade corridors, for these manufacturers.
“These discussions and subsequent import of Chinese products into Bangladesh might lead to pressure from the West but China diversifying the supply chain via Bangladeshi outsourcing is a win-win situation for both countries,” Dr Mubashar Hasan, an analyst at the Sydney Policy and Analysis Centre, told ThePrint.
Bangladesh-China ties and a geopolitical gambit
Yunus and the chairman of the Chinese Exim Bank also discussed key infrastructure projects, with Bangladesh negotiating for lower interest rates on existing loans and longer repayment terms.
Yunus also raised the possibility of expanded cooperation in defence technology transfer, which could strengthen the country’s domestic defence industry, said a press statement issued by the office of the chief adviser to the interim government of Bangladesh. The fast-tracking of a Chinese Special Economic Zone (SEZ) to be set up in Chattogram to attract Chinese manufacturers, was also reportedly discussed during the meeting.
Yunus further highlighted the importance of Bangladesh’s new ports, which he is believed to have said not only support the country’s economy but also serve landlocked nations including Nepal, Bhutan, and India’s northeastern states.
Experts view Yunus’s Beijing visit as part of a broader diplomatic strategy, particularly in the context of Bangladesh’s shifting geopolitical stance and chill in ties with India.
China’s growing interest in Bangladesh, they say, could extend beyond manufacturing to include sectors such as healthcare. “China showed interest in investing in Bangladesh’s medical infrastructure, an area where India has traditionally dominated,” Monzur Hussain, research director at the Bangladesh Institute of Development Studies, told ThePrint.
‘Protecting its front yard’
On Friday, Yunus is to meet Chinese President Xi Jinping. The two leaders will discuss bilateral relations and opportunities for collaboration on various projects, including manufacturing, business, energy, and infrastructure, according to an official statement.
“What Yunus is essentially doing is continuing the Bangladesh-China relationship that Hasina built. China provided significant support to Hasina during her tenure, but after her ouster, it decided to align with Yunus due to its policy of non-interference in politics.
“This shift is part of China’s strategy to strengthen business ties amid a diplomatic strain with India” Hassan said.
Adding, “India somewhat snubbed Yunus, prompting him to shift his focus to other global powers. Bangladesh is simply trying to protect its front yard in this geopolitical landscape.”
(Edited by Amrtansh Arora)
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