China to sign $24 billion in loans to Bangladesh, overtakes PM Modi’s $2 billion credit line

Xi's trip, the first by a Chinese president in 30 years, is aimed at boosting China's involvement in infrastructure projects at a time when India is pushing investments of its own in Bangladesh, a country New Delhi considers its area of influence.

By: Reuters | Dhaka/beijing | Updated: October 14, 2016 3:45 pm
china, xi jinping, indo china trade, jinping in bangladesh, narendra modi, indo china relations, chinese investment in india, bangladesh, jinping bangladesh visit, india news Prime Minister Narendra Modi and Chinese President Xi Jinping before delegation level talks, in New Delhi. (Express File Photo by Anil Sharma)

China is set to sign off on loans worth over $24 billion to Bangladesh during President Xi Jinping’s visit on Friday, Dhaka’s biggest foreign credit line to date that will help it build power plants, a seaport and railways.

Xi’s trip, the first by a Chinese president in 30 years, is aimed at boosting China’s involvement in infrastructure projects at a time when India is pushing investments of its own in Bangladesh, a country New Delhi considers its area of influence.

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Japan, helped by India, has also got involved in Bangladesh, offering finance at low interest rates to build a port and power complex, sharpening competition for influence in the country of 160 million people located on the Bay of Bengal.

China plans to finance around 25 projects, including a 1,320 megawatt (MW) power plant, and is also keen to build a deep sea port, Bangladesh junior finance minister M.A. Mannan said.

“Xi’s visit will set a new milestone. (A) record amount of loan agreements will be signed during the visit, roughly $24 billion,” he told Reuters.

Among the proposed projects are highways and information technology development, he said. “Our infrastructure needs are big, so we need huge loans.”

China’s Jiangsu Etern Co Ltd signed a deal worth $1.1 billion to strengthen the power grid network in Bangladesh, the company said on Thursday. Beijing is especially keen to revive a plan to build a deep sea port in Sonadia which has been on hold for years, officials said. Xi is visiting Bangladesh on his way to a BRICS summit of the world’s leading emerging economies in Goa, India.

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His trip comes at a time when Prime Minister Narendra Modi is leading efforts to boost ties with neighbouring countries, from Sri Lanka to Nepal, by offering them a share of India’s fast-growing economy. Last year PM Modi announced a $2 billion credit line during a visit to Dhaka, but China looks set to go well beyond that.

Zhao Gancheng, director of South Asia Studies at Shanghai Institute for International Studies, said both India and China supported development in Bangladesh, and that it did not have to be one or the other. “I really don’t think there is a zero sum game going on in Bangladesh between China and India. Bangladesh welcomes both Chinese and Indian investment…” said Zhao.

Bangladesh has backed Xi’s “One Belt, One Road” initiative to boost trade and transport links across Asia and into Europe, seeing it as an opportunity to lift growth. India has reservations about the plan, amid worries that it is an attempt to build a vast zone of Chinese influence.

Beijing had proposed an economic corridor linking Bangladesh, Myanmar, China and northern India, but New Delhi did not seem keen on the idea, Zhao said. “Bangladesh has an enormous need for investment, and I don’t think it’s going to become a site for strategic competition, a game between the great powers or a pawn,” he said.

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  1. M
    Mr Barry
    Feb 2, 2017 at 6:37 pm
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    Reply
    1. A
      Ajit
      Oct 14, 2016 at 10:53 pm
      So Bangladesh got 60% of what stanis got without wagging of tail or compromising on National interest. s are too cheap and give Punjabis bad name everywhere. The only concern is that Xi is like Aurengzeb and not sure if he will see it through before things starts happening in Beijing.
      Reply
      1. T
        Trun
        Oct 14, 2016 at 1:22 pm
        Isnt it a surgical strike by Chinese ?
        Reply
        1. R
          Rattihallirao
          Oct 14, 2016 at 3:19 pm
          China is already in stan's doorstep and us leaping un to the eastern part that is Vietnam, myanmar and Bangadesh. For sure China will have a major stake or influence in east and west of India. PM is playing with Dragon which has firm grip in the region. Such gimmicks can do only eye wash for the electorate. Indian economy in doldrums and no solid proposal or action is coming forth. Media is busy in focussing stan almost daily. Some surgical strike is required to mitigate this falsehood.
          Reply
          1. J
            John
            Oct 14, 2016 at 11:50 am
            Let us consider facts. Proposals are like BHUMI POOJA...call me when the building is ready. What happend to40B loan to PAK from China? What about 24B investments in India? China had to shut down their own STOCK ExCHAnge to prevent complete CRASH, one year ago. They are shutting down many plants due to pollution, excess capacity and UN- employment though not alarming is rising. THIS IS JUST A BIG DRAMA...
            Reply
            1. V
              Virendra Sason
              Oct 14, 2016 at 7:52 am
              US says no alloy as 21st centuary will of business interests. It seems to me that after 100 years there will be one religion MONEY, MONEY, MONEY, MONEY, MONEY instead of HINDU, MUSLIM, CHRISTIAN, SIKH, BUDHIST....
              Reply
              1. W
                W.R.
                Oct 14, 2016 at 2:36 pm
                Cow Ur!ne drinker Modi should take back $2bn and should build some toilets for poor in India. He is making Indians look like fool at international level. No one takes him seriously.
                Reply
                1. D
                  Deeptanshu Verma
                  Oct 14, 2016 at 10:14 pm
                  It is amazing how China is trying to outmaneuver India with Bangladesh by showering money and some Indians here see this only as a personal defeat for Modi. All this "feku shown his place" talk. Do you think Modi is personally going to be impacted if China muscles into Bangladesh. What is happening with people's sense.
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