Bangladesh urges China to reduce trade gap, speed infrastructure delivery

By Joe Cash

BEIJING, June 26 (Reuters) – Bangladeshi Prime Minister Tarique Rahman urged Chinese leader Xi Jinping to help narrow the trade gap between the world’s No.2 economy and the South Asian state and help with the delivery of key infrastructure projects, during talks in Beijing on Friday.

Rahman is on his first visit to China since taking office in February, and faces the task of balancing ties with Beijing – one of its biggest creditors – while also maintaining stable relations with neighbouring India, as the two regional rivals compete for influence.

During a meeting at Beijing’s Great Hall of the People, Rahman told Xi that “to reduce the trade gap, we request help to diversify our exports to China,” singling out fresh mangoes, jackfruit, guava, aquatic products, raw leather and pharmaceutical products, among other goods, according to a media pool report.

“(Bangladesh) need China’s support in implementing our major signature projects and upgradation and modernisation of our existing industrial units,” Rahman added.

China bought $1.3 billion worth of Bangladeshi goods last year, according to Chinese customs data, with $153 million of human hair for wig making the top export, followed by $80 million of cotton yarn and $78 million of jute products.

The two sides also discussed stepping up defence cooperation, Rashed Al Mahmud Titumir, one of Rahman’s advisers, told Reuters, but “no specific agreement was signed.”

INFRASTRUCTURE SPENDING

China’s foreign ministry said in a statement that it was willing to support Bangladesh advance the development of the China-Myanmar-Bangladesh Economic Corridor – aimed at connecting China’s Yunnan province to the two countries – and explore cooperation in artificial intelligence, green and low-carbon development, healthcare and education, among other areas.

Bangladesh joined China’s Belt and Road Initiative in 2016, Xi’s flagship infrastructure and development strategy aimed at connecting Asia, Africa and Europe.

Guo Jiakun, a foreign ministry spokesperson, told reporters at a regular news conference that the two countries had also agreed to cooperate in port and water projects.

“The comprehensive management and restoration of the Teesta River is a livelihood project to which the Bangladeshi side attaches great importance, and China is willing to provide assistance and support to the best of its ability,” he added.

CAUTIOUS FINANCING

Rahman met Premier Li Qiang on Thursday and they signed multiple cooperation agreements to solidify bilateral ties, state media reported.

Bangladesh owes China $6.2 billion, World Bank data shows, with the Beijing-based Asian Infrastructure Investment Bank having lent a further $2.3 billion. Delhi has lent its neighbour just $1.6 billion. 

Meanwhile, Chinese firms have invested a further $7.7 billion, around half of which was in Bangladesh’s energy sector, data from the American Enterprise Institute think tank shows. 

China has become more cautious about financing, said Chim Lee, senior analyst at the Economist Intelligence Unit in Beijing.

“Not least because it tends to be looking for key logistics corridors these days that can be scaled up, and Bangladesh is a bit tricky because it just doesn’t provide the same kind of corridor as say Central Asia or Myanmar,” Lee said.

(Reporting by Joe Cash in Beijing Ruma Paul in Dhaka; additional reporting by the Beijing newsroom; writing by Farah Master and Joe Cash; Editing by Muralikumar Anantharaman, Lincoln Feast and Raju Gopalakrishnan)