March 2025: A Diplomatic Reset in Beijing

On March 28, 2025, Bangladesh Chief Adviser Muhammad Yunus met Chinese President Xi Jinping at the Great Hall of the People in Beijing — making it his first official bilateral foreign visit since the political transition that ended Sheikh Hasina's fifteen-year rule in August 2024. The symbolism was deliberate. In South Asian diplomatic convention, a new leader's first bilateral visit typically goes to New Delhi. Yunus went to Beijing instead. By the time the four-day visit concluded, Bangladesh had signed eight memoranda of understanding and one agreement on economic and technical cooperation, and secured $2.1 billion in investments, loans, and grants. Total Chinese investment in Bangladesh reached nearly $42 billion by fiscal year 2024-25. The 50th anniversary of Bangladesh-China diplomatic ties was being celebrated — and Dhaka's foreign policy orientation was being openly recalibrated.

The March 2025 visit brought several concrete outcomes. China committed $400 million for the modernization of Mongla Port, Bangladesh's second-largest, on the Bay of Bengal. It pledged $350 million for the development of the China Industrial Economic Zone in Chattogram, and $150 million in technical assistance. China agreed to extend zero-tariff access to Bangladeshi goods through 2028 — two years beyond Bangladesh's anticipated graduation from least-developed-country status — and proposed initiating negotiations for a free trade agreement and an investment agreement. Beijing agreed in principle to extend loan repayment periods and consider lowering interest rates from the current 3 percent toward the 1-2 percent that Dhaka requested. China also expressed interest in relocating manufacturing industries — particularly in textiles, pharmaceuticals, and renewable energy — to Bangladesh, and discussed the potential sale of multi-role combat aircraft.

What BRI Has Built in Bangladesh

Bangladesh joined the Belt and Road Initiative in 2016, during President Xi Jinping's visit to Dhaka — a visit that produced agreements covering more than $9.45 billion in Chinese-financed projects. Between 2016 and 2023, Chinese companies constructed or financed 12 highways, 21 bridges, and 27 power and energy projects in Bangladesh. Landmark deliverables include the Padma Bridge Rail Link — a 169-kilometer connection between Dhaka, the country's central regions, and the southwestern port of Payra, valued at $3.3 billion — and the Karnaphuli River Tunnel, the first underwater tunnel in South Asia, connecting both sides of Chattogram. The Padma Bridge itself — funded under a combination of Chinese and domestic financing — is assessed by economists to have the potential to add 1.2 percent to Bangladesh's GDP through improved connectivity between Dhaka and the southwest.

China has also constructed parts of both Chattogram and Mongla seaports, and built the Payra coal-powered thermal power plant. It financed upgrades to Bangladesh's national ICT network and power grid. Chinese companies have created an estimated 550,000 employment opportunities in Bangladesh across these projects. As Bangladesh's largest trading partner, China now accounts for a major share of Bangladesh's import bill — with imports from China rising from $1.54 billion to $1.92 billion between August 2024 and August 2025 alone, a 25 percent increase. Bangladesh's exports to China grew 44 percent in the same period, reaching $130 million — a significant jump though still modest compared to the import imbalance.

The Debt Question

Bangladesh's debt to China has grown substantially. In 2022, then-Finance Minister Mustafa Kamal publicly warned developing countries to think carefully before taking additional BRI loans — at which point Bangladesh owed China approximately $4 billion, representing about 6 percent of its total foreign debt. By 2025, that figure had nearly doubled to approximately $7 billion, and analysts tracking Yunus's Beijing visit suggested the $5 billion soft loan under discussion could raise the total toward $12 billion. Bangladesh has simultaneously canceled or paused several proposed BRI projects — including a major highway project declined in 2024 over financial risk concerns — and has been renegotiating terms on existing loans.

The Sri Lanka and Pakistan precedents hang over this conversation. Sri Lanka's Hambantota Port, built with Chinese financing, was leased to a Chinese state company for 99 years after Colombo defaulted on its debt in 2017 — the case that gave "debt-trap diplomacy" its most vivid illustration. Pakistan's China-Pakistan Economic Corridor has locked Islamabad into energy payments that strain the government's fiscal position. Bangladesh's finance establishment has watched both cases closely. Yunus's request in Beijing — to reduce interest rates from 3 percent to 1-2 percent and waive commitment fees — was an acknowledgment that existing terms create fiscal pressure. Beijing agreed in principle to consider the adjustments but made no firm commitment on rates.

Academic analysis complicates the simple debt-trap narrative. Researcher Jeremy Garlick has argued that BRI lending terms are not demonstrably worse for developing country debt than Western lending frameworks, including IMF programs and Paris Club arrangements — many of which have also failed to reduce debt burdens in developing economies. Bangladesh's total external debt stood at 14.3 percent of GDP in the pre-pandemic period, a level economists consider manageable, and the country has a generally strong track record of servicing external debt. The specific terms of BRI loan agreements — interest rates, grace periods, collateral requirements — are often not publicly disclosed, which makes independent assessment difficult and compounds political anxiety about what commitments have actually been made.

Ports, the Bay of Bengal, and Strategic Geometry

China's $400 million commitment to Mongla Port is not only an infrastructure investment. Analysts at the Small Wars Journal and Observer Research Foundation have both noted that Chinese investment in Bangladesh's port infrastructure — Chattogram in the north of the Bay of Bengal, Mongla in the south — fits a recognizable pattern. China's "String of Pearls" strategy involves building or financing port facilities across the Indian Ocean rim: Gwadar in Pakistan, Hambantota in Sri Lanka, Kyaukphyu in Myanmar, and now expanded presence at both major Bangladeshi ports. In October 2024 — before the Yunus-Xi summit — a Chinese naval fleet including the ships Qi Jiguang and Jing Gangshan made a goodwill visit to Chattogram Port, with bilateral meetings explicitly focused on naval cooperation. That visit preceded the $400 million Mongla commitment by five months.

The Bay of Bengal matters to China as an alternative to the Malacca Strait — a chokepoint through which roughly 80 percent of China's oil imports pass, and which could theoretically be blockaded in a conflict scenario. Access to deepwater ports in Bangladesh provides China with options in the northwestern Bay that do not depend on navigating narrow straits. India is acutely aware of this dynamic. China's growing footprint at Mongla creates direct tension with the 2017 agreement under Sheikh Hasina that allowed India to use both Chattogram and Mongla for trade transit to its northeastern states — an agreement Yunus's government has handled more cautiously, and which Beijing's port investment implicitly competes with.

The Teesta Project and the India Dimension

One of the most geopolitically sensitive items in the Yunus-Xi discussions was the Teesta River. Bangladesh has long sought a water-sharing agreement with India over the Teesta, a river flowing from Sikkim through West Bengal into northern Bangladesh — but negotiations with New Delhi have stalled for over a decade, blocked partly by the political opposition of West Bengal's state government. China has offered to step in with the Teesta River Comprehensive Management and Restoration Project: a multi-billion-dollar initiative involving dredging, flood control, and water management infrastructure.

In October 2025, a mass rally at Chittagong University demanded immediate implementation of the Chinese Teesta project. Protests have spread across the Rangpur division in northern Bangladesh, where farmers and communities dependent on the river experience its seasonal extremes most acutely. The Ganga Water Sharing Treaty with India, which governs a separate river, is set to expire in 2026 — and strained Dhaka-New Delhi relations cast uncertainty over its renewal. Yunus requested a 50-year water management master plan from China in Beijing, framing it as a technical matter. India and regional analysts have described it as a sovereignty and strategic-alignment question.

China's courtship of Bangladesh has not been limited to the interim government. The Chinese Ambassador to Bangladesh met with Jamaat-e-Islami chief Shafiqur Rahman in September 2024 — the first foreign diplomat to visit Jamaat's Dhaka office since 2010 — and publicly described Jamaat as a "well-organised political party." A 14-member Bangladeshi Islamist delegation visited Beijing in December 2024. The Chinese Embassy hosted a Jamaat delegation in July 2025, and a senior Chinese foreign affairs institute delegation met Jamaat leaders in Dhaka that September. Beijing is hedging across Bangladesh's political landscape, investing in relationships with parties and actors beyond whoever holds government — a standard Chinese approach to long-term influence management.

What Bangladesh Actually Gets — and What It Pays

The case for Bangladesh's BRI engagement is not manufactured. The Padma Bridge Rail Link is real infrastructure with real economic value. The Karnaphuli Tunnel opened a second crossing at Chattogram that the city genuinely needed. The power plants Chinese companies built addressed Bangladesh's chronic electricity deficit. Chinese manufacturing relocation — if it materializes in textiles, pharmaceuticals, and clean energy as discussed — could accelerate Bangladesh's industrial diversification beyond RMG at a moment when that diversification is strategically urgent as LDC graduation approaches. Zero-tariff access to the Chinese market through 2028 provides a meaningful buffer as Bangladesh loses preferential EU and US trade terms.

Against this, the costs are structural and compounding. A debt portfolio rising toward $12 billion from a single creditor, at terms that are not fully transparent and that Dhaka is already seeking to renegotiate, creates leverage that is not imaginary. The trade imbalance — $1.92 billion in imports from China versus $130 million in exports — is not self-correcting. The port investments serve Chinese strategic interests in the Bay of Bengal as well as Bangladeshi development interests, and the two do not always point in the same direction. Bangladesh's military dependency — over 80 percent of defense hardware sourced from China — adds a dimension that purely economic analysis understates.

Bangladesh is not Sri Lanka. Its debt management record is stronger, its GDP base is larger, and its political establishment is more alert to the risks than Colombo was in 2007. But the question Dhaka must continuously answer — whether each tranche of Chinese financing advances Bangladesh's development on Bangladesh's terms or incrementally deepens a dependency that reduces future room for maneuver — does not get easier as the debt total rises and the strategic stakes in the Bay of Bengal increase.

win-tk.org is a wintk publication covering global affairs and culture for Bangladeshi and South Asian audiences.