The visit of Bangladesh’s Chief Advisor Muhammad Yunus to China from March 26 to 29 was significant for several reasons. It was his first official bilateral visit abroad since the political transition in Bangladesh in August 2024. More importantly, it signaled a growing Bangladeshi reliance on China as its lead economic partner.
During the 15 years of Awami League rule, Prime Minister Sheikh Hasina was close to India on economic and security matters, even as she tried to walk a tightrope between India and China. Since her resignation on August 5 last year, following weeks of mass protests, things have changed not only in Bangladesh’s domestic politics but also its foreign policy. Yunus’ visit has signaled that the interim government will not hesitate to lean towards China.
With Indian Prime Minister Narendra Modi neither inviting Yunus to Delhi nor meeting him on the sidelines of global events in the seven months since the political transition in Dhaka, Yunus headed to China. The primary objective of his visit was to strengthen bilateral ties by attracting investment, advancing economic and technical cooperation, and securing commitments in key sectors such as infrastructure, health and manufacturing, particularly through the establishment of Chinese factories in Bangladesh.
In addition to an agreement on economic and technical cooperation, Bangladesh and China signed eight Memorandums of Understanding. They made five announcements relating to investment in infrastructure and technology. These covered a range of sectors, including cultural exchange, collaboration in the fields of media and health, and exchange of hydrological data concerning the Yarlung Zangbo-Yamuna River.
The Chinese government and businesses have pledged $2.1 billion in loans, investments, and grants to Bangladesh, with some 30 Chinese companies committing investment worth $1 billion for the Chinese Industrial Economic Zone in Chattogram in Bangladesh. China will extend $400 million in loans for the Mongla port modernization project, $350 million for the development of the China Industrial Economic Zone, and $150 million as technical assistance.
The two nations also discussed setting up Chinese factories in Bangladesh, particularly in textiles, pharmaceuticals, and renewable energy. Such projects will create employment avenues, encourage industrialization, and drive Bangladesh’s economic growth. China has already created 550,000 employment opportunities in Bangladesh.
Among the major issues discussed was Bangladesh’s water management system, which is plagued by a variety of challenges owing to the country’s intricate river system. Yunus praised China’s achievement in water management and sought China’s assistance in developing a 50-year master plan to improve Bangladesh’s water management skills. Besides water management, the two sides will work together in disaster prevention and climate change mitigation. This is significant for Bangladesh, which is not only among the countries most vulnerable to global warming but also already witnessing the impact of climate change.
Importantly, China will participate in the Teesta River project works. The project will contribute to boosting trade and connectivity in Bangladesh.
China’s participation in the Teesta project marks a shift in regional dynamics, as India has long been involved in discussions over Teesta’s water-sharing but failed to finalize an agreement with Bangladesh. With Beijing’s investment, Dhaka aims to improve irrigation, flood control, and river management, aligning with China’s broader infrastructure push in South Asia.
This move challenges India’s traditional influence, as the Teesta is crucial to both West Bengal and northern Bangladesh. While India may see China’s role as a strategic concern, Bangladesh is leveraging this rivalry to secure better infrastructure deals, balancing both powers to its advantage.
China also pledged duty-free access and quota-free access to the Chinese market for 99 percent of products until 2028.
During his visit, Yunus urged China to reduce interest rates on Chinese loans from 3 percent to 1-2 percent and waive commitment fees on Chinese-funded projects, a request that Foreign Adviser Touhid Hossain made during his visit to China in January. In response, Beijing agreed in principle to extend the repayment period and assured Dhaka it would consider lowering interest rates to ease Bangladesh’s foreign debt burden.
The two leaders also discussed the sale of China’s multi-role combat aircraft to Bangladesh. The two countries are also exploring the possibility of increasing agricultural exports from Bangladesh to China. President Xi Jinping showed interest in importing fresh mangoes, jackfruits, guava and other high-quality agricultural products to China’s vast market.
A Chittagong-Kunming direct flight is set to be introduced, offering a new option for Bangladeshis who have struggled with Indian visa issues in recent months. This will also help those seeking medical treatment abroad. Cultural and educational exchanges are also poised to increase with plans for expanded student exchange programs, research collaborations, and language training.
In addition to meeting Xi in Beijing on March 28, Yunus addressed the Boao Forum annual meeting in Hainan and met a group of Chinese traders and investors for a high-level round table in Beijing.
Additionally, both sides reaffirmed their support for addressing the Rohingya refugee crisis, with China committing to continue supporting Bangladesh’s efforts to repatriate displaced people from Myanmar. Yunus also highlighted the need for China’s involvement in facilitating a peaceful solution to the crisis, emphasizing the importance of international cooperation to resolve the issue.
This visit demonstrated the evolving nature of Bangladesh’s foreign policy. This year marks the 50th anniversary of diplomatic relations between Dhaka and Beijing. Through agreements on infrastructure, trade, water management, and agriculture, Bangladesh is setting the stage for long-term economic growth and strategic alignment with one of the world’s largest economies.
However, Yunus’ visit, while important, did not significantly surpass the outcomes of Hasina’s 2024 visit to China, when the two countries signed 21 agreements and MoUs, and announced seven projects.
Several of the agreements, such as those on infrastructure, water management, and trade, that were reached during Yunus’ visit, largely mirror issues discussed during Hasina’s tenure.
Except for the $2.1 billion in investments and loans pledged by China, as well as the Mongla Port modernization and the Teesta River restoration, the rest of the discussions were central themes that had been discussed during Hasina’s visit.
Although Yunus’ invitation to China to work on the Teesta project marks a pivotal move, much of the outcome of his visit seems more like a continuation of Hasina’s diplomatic efforts rather than a setting in motion of groundbreaking new initiatives. The agreements on cultural exchanges and hydrological cooperation, while valuable, are also extensions of existing partnerships rather than major shifts in the bilateral relationship.
Moreover, although Bangladesh has been granted duty-free access to the Chinese market until 2028—it was till 2026 as per the past agreement—it has already enjoyed duty-free access on 99 percent of its products from 2022. However, it did not lead to an increase in Bangladeshi exports, as besides readymade garments, there are no products in Bangladesh’s export basket,
Yet Yunus’ visit is significant in the context of Bangladesh’s post-Hasina diplomatic landscape. With Bangladesh’s relationship with India currently strained, particularly in the aftermath of the political transition, the visit underscores a strategic pivot towards China as the more stable and reliable partner. It highlights the interim government’s turn to China to maintain economic growth and regional influence.