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Economy

Xi pledges $20bn to Bangladesh for infrastructure, dwarfing Indian offer

NEW DELHI -- Chinese President Xi Jinping on Friday promised Bangladesh some $20 billion in loans for infrastructure projects, one-upping an Indian aid package from last year in a bid for greater regional influence.

Xi met with Bangladeshi Prime Minister Sheikh Hasina while visiting the South Asian country, signing 27 agreements on cooperation and aid for such infrastructure projects as power plants, ports and railroads. The two leaders also witnessed the unveiling of six projects, including a multilane tunnel beneath the Karnaphuli River in Chittagong, from the prime minister's office in Dhaka.

The $20 billion in financing from China, revealed by an official at Bangladesh's foreign ministry, is 10 times the size of a $2 billion package promised by Indian Prime Minister Narendra Modi on a visit last year. Bangladesh managed to extract the aid by offering cooperation on China's Belt and Road Initiative to create new overland and oceanic trade routes to Europe.

Xi's visit was the first by a Chinese head of state to Bangladesh in three decades and came ahead of a summit in the Indian state of Goa on Saturday and Sunday by the BRICS nations of Brazil, Russia, India, China and South Africa. The Chinese are apparently revving up economic exchange efforts with countries on the Indian Ocean to counter India's influence in the region. On a visit to Pakistan last year, Xi promised $46 billion in funding for such projects as power plants and construction of the China-Pakistan Economic Corridor traversing the nation.

Xi and Hasina agreed to elevate the Sino-Bangladeshi relationship from a "closer comprehensive partnership of cooperation" to a "strategic partnership of cooperation" and to "increase high-level exchanges and strategic communications so that our bilateral relations will continue to move ahead at a higher level," the Chinese leader told a joint news conference after the meeting. He said the countries will look into the possibility of a bilateral free trade agreement.

"We have reiterated our commitment to support the 'One China' policy," Hasina said. The two sides have "agreed to work closely and support each other on regional and international issues of mutual interest," she said.

Hasina is under pressure to produce significant results ahead of a general election in 2019. Infrastructure is to play a leading role in the government's achievements, a diplomatic source in Dhaka said, noting that work on highways, bridges and railways in the country is picking up pace.

Additional reporting by contributing writer Syed Tashfin Chowdhury in Dhaka. 

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