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After India’s $500 million loan, Bangladesh tightens the screws on Chinese companies

Akshay Narang by Akshay Narang
19 December 2021
in Trending
Bangladesh, China, India, Sheikh Hasina, PM Modi, Xi Jinping
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Bangladesh is changing and getting closer to India. Recently, when the President of India, Ram Nath Kovind visited Bangladesh, the restored Ramna Kali Mandir was inaugurated in Dhaka. The historic temple had been destroyed by barbaric Pakistani forces in 1971, as it was one of the focal points of Bangladeshis’ rebellion in Dhaka.

The inauguration of the temple was a signal—relations between India and Bangladesh are going to improve drastically at the expense of inimical powers like Pakistan and China. And Bangladesh is actually doing it now, by getting rid of predatory Chinese investments after India extended a $500 million line of credit to Dhaka. 

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Read more: In a tight slap to Islamists, Indian President Ram Nath Kovind inaugurates Ramna Kali Mandir in Bangladesh

Bangladesh tightens the screws on Chinese companies:

China is back to doing what it does best—cheat governments of other companies on the pretext of building infrastructure. As per Bangladesh Live News, authorities in the country have discovered that China Road & Bridge Corporation (CRBC) is involved in tax evasion while importing construction material for government projects. 

CRBC is a subsidiary of the Chinese State-owned China Communications Construction Company (CCCC), and was involved in the construction of roads and bridges in Bangladesh. In 2020 also, the National Board of Revenue (NBR) had launched an investigation into ZTE Bangladesh, a subsidiary of the Chinese ZTE Corporation on allegations of tax evasion.

Let me tell you, China’s track record in Bangladesh is so poor that it even had to withdraw from three infrastructure projects in the country after the allegations of misappropriation of funds to escalate project costs. 

China’s BRI ambitions to face a setback:

With Bangladesh identifying corrupt Chinese business practices and also deciding to crack down on them, it is China’s Belt and Road ambitions that are likely to face a major setback. 

Bangladesh is one of the world’s fastest-growing economies and this is why Chinese President Xi Jinping has invested heavily in BRI projects in the South Asian country. Dhaka joined the Belt and Road Initiative (BRI) in the year 2016, and as per Dhaka Tribune, China invested an estimated $9.75 billion in the country from 2009 to 2019. 

Presently, there are nine active BRI projects in the country, including the mega Padma Bridge rail link project, Bangabandhu tunnel under the Karnaphuli River, and Dasher Kandi Sewerage treatment plant. However, the success of such projects is said to be highly dependent on their economic viability and sustainable financing. 

Now, with allegations of Chinese companies causing losses to the exchequer, Dhaka is likely to develop cold feet towards Chinese BRI projects. As a result, Chinese ambitions of making Dhaka a hotspot of BRI investments and finding a presence in the Bay of Bengal region close to India are likely to face a major setback.

Why is there a sudden backlash against corrupt Chinese business practices?

So, Bangladesh is suddenly rising against corrupt Chinese business practices. And it isn’t as if one fine day, Bangladeshi regulatory authorities thought—let’s crackdown on some Chinese companies today. There is an angle here.

Recently, it was announced that India is extending a $500 million line of credit to Bangladesh, under which Dhaka will soon import Indian defence equipment. With this, India will end an era of large-scale sales of faulty defence equipment by Beijing to Dhaka.

Let me explain, what has transpired in Bangladesh. India extended a $500 million line of credit to Bangladesh and signalled that it doesn’t like the growing Chinese presence in the region. Dhaka, which is close to India, both culturally and geographically, didn’t want to antagonise New Delhi for the sake of Chinese investments. After all, India is literally Bangladesh’s oldest friend in the world.

Therefore, Bangladesh decided to pull the plug on Chinese companies. From here on, Bangladesh will keep on blackmailing China. Since we all know how Chinese businesses work, Dhaka will bring up an act of Chinese corruption and embezzlement, every time Beijing comes up with a new proposal in the South Asian country.

Read more: India’s $500 million line of credit to Bangladesh cancels Turkey and China’s grip on Dhaka

India has, thus, managed to get Bangladesh to throw the Chinese out of its economy. 

Tags: #BangladeshChinaIndiaPM ModiSheikh HasinaXi Jinping
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