China is set to sanction loans worth over $24 billion (Rs 1,60,000 crore) to Bangladesh on Friday, as President Xi Jinping visits the country for the first time. The money, which is the highest amount Dhaka has ever received from a foreign country, will be used to develop 25 projects, including power plants, a deep sea port and railways.
Junior Finance Minister MA Mannan told Reuters, “Jinping’s visit will set a new milestone. Our infrastructure needs are big, so we need huge loans.” Among the upcoming projects, China’s Jiangsu Etern Co Ltd has already signed a deal worth $1.1 billion (Rs 7,000 crore) to improve the power grid network in Bangladesh. Besides, the deep sea port will come up at Sonadia.
According to experts, Bangladesh has become a hot spot for investment and competition among bigger powers. Last year, Prime Minister Narendra Modi sanctioned Rs 2 billion (Rs 13,000 crore) credit line to Dhaka while Japan has also offered loan at a very low interest rate to build a port and power complex.
While the $24-billion loan may seem to be a way for China to exert control in South Asia, Zhao Gancheng, director of South Asia Studies at Shanghai Institute for International Studies, rejected such theories. "I really don't think there is a zero sum game going on in Bangladesh between China and India. 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,” said Gancheng.
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