By the Blouin News Business staff

China’s growing investments in Bangladesh suit both

by in Asia-Pacific.

A Bangladeshi woman works in a garments factory in Ashulia on June 23, 2010. AFP PHOTO/MUNIR UZ ZAMAN

A Bangladeshi woman works in a garments factory in Ashulia on 6/23/10. AFP PHOTO/MUNIR UZ ZAMAN via Getty Images

Relations between Bangladesh and China are blossoming. On Wednesday, Road Transport and Bridges Minister Obaidul Quader announced that China will construct two more “friendship bridges” in Bangladesh, bringing the total number to ten. The announcement was one of several agreements reached during Chinese Commerce Minister Gao Hucheng’s working visit to Dhaka, the Bangladeshi capital, from Tuesday to Wednesday.

China also offered to invest $350 million in Bangladesh’s apparel sector on Tuesday. Bangladeshi garment exports to China rose 26% year-on-year to $304.24 million in fiscal year 2014-15. China is still the world’s largest apparel supplier, but it has shifted its focus to producing high-end clothing and sophisticated technological items. So Bangladesh’s cheap garments (most of which are duty-free) have become increasingly popular in China’s $178 billion domestic apparel market.

Source: The Daily Star, 8/23/15

Source: The Daily Star, 8/23/15

Beijing is also providing Bangladesh nearly $87 million in grants to build the Bangladesh-China Friendship Exhibition Centre in Dhaka. Additionally, China has expressed interest in other infrastructure projects in Bangladesh — and not out of altruism. Minister Gao called for Chinese companies to be given the responsibility to operate such facilities after their completion. “It would benefit in two ways. The facilities built with Chinese assistance would be better managed and the second the Chinese contractors would be more careful about quality of the work,” he added. Bangladesh is positively considering the Chinese proposal.

Following Prime Minister Sheikh Hasina’s visit to China in June 2014, all of Bangladesh’s economic proposals were accepted. Particularly for geostrategic imperatives, China can afford to be generous with Bangladesh, with which it has a highly favorable trade balance. In fiscal year 2013-14, Bangladesh imported $7.54 billion worth of goods from China while exporting only $746.2 million worth of goods in return.

Meanwhile, India is keeping a wary eye on China’s encroachments in its “backyard.” Ties between Delhi and Dhaka had recently improved with the passage of the historic Land Border Agreement, enacted on August 1. The two neighbors swapped 160 small enclaves with some 50,000 de facto stateless people, thus ending decades of enmity over the illogical, contested border. This, along with other cooperative agreements, finally secured a long-standing Indian economic and security goal: being allowed overland transit through Bangladesh to India’s remote, landlocked northeast provinces.

Looking ahead, Chinese President Xi Jinping is likely to visit Bangladesh in October, noted Minister Quader. “During the visit, Dhaka-China is likely to ink six development agreements,” he added. Without having to choose one over the other, Bangladesh is reaping the benefits of having both India and China compete for its favor.