Breakthrough expected during CA's Beijing visit

China's financial assistance to Bangladesh remained almost stalled for about two years, and the upcoming visit of Chief Adviser Professor Muhammad Yunus to Beijing could make a breakthrough in this regard, sources said Wednesday.
They said China's financial support to Bangladesh had not seen any visible progress for long, although some top policymakers and the past prime minister visited Beijing to improve economic relations between the two nations.
"We have contacted China's foreign ministry over the months. We are trying to set up a meeting, but they are yet to reply," said a senior Ministry of Finance (MoF) official.
He also said, "We are still trying to hold a meeting before the chief adviser's visit. We are waiting for a reply from Beijing."
Amid the slow progress, the chief adviser is scheduled to visit China on March 25-28. During the visit, he is likely to have a meeting with Chinese President Xi Jinping on March 28, officials said.
China on May 10, 2023, provided loans of $276.25 million to Bangladesh to develop water supply and sewerage systems in Rajshahi, which was its last financial assistance for the South Asian country, official data show.
Earlier on October 28, 2021, Beijing confirmed $1.1 billion in credit to construct the Dhaka-Ashulia Elevated Expressway.
The East Asian development partner confirmed $2.67 billion in loans for building the Padma railway-link line in April 2018.
At least three to four projects, which are at the final stage of implementation, have been facing complexities for the last two to three years for delays in getting financial-assistance confirmation from China, finance ministry officials said.
Earlier in October 2016, Dhaka requested Beijing to provide financial support for 27 priority projects.
Following the request, the Chinese president, during his visit to Bangladesh, promised about $20 billion in foreign aid. This was the largest amount committed by a bilateral development partner of Bangladesh and was to be spent on implementing the 27 projects till 2020.
"However, except for a few, China has yet to confirm support for the remaining projects despite Bangladesh's requests," said another finance ministry official.
The then Bangladesh Prime Minister, Sheikh Hasina, visited China on July 8-10, 2024 when she requested Beijing to expedite the development assistance China pledged in 2016 for 27 projects, said officials at the Economic Relations Division (ERD).
After taking over office by the Professor Yunus-led interim government in August last year, Foreign Adviser Touhid Hossain in January this year visited China but could not to make any headway on the stalled assistance.
Officials at the MoF said they are yet to get any response regarding the outcome of the foreign adviser's visit to China.
During a bilateral meeting with Mr Touhid Hossain, Chinese Foreign Minister Wang Yi agreed in principle to extend the loan-repayment period.
Both sides had agreed to extend the loan-repayment period for Bangladesh from 20 years to 30 years for both the Preferential Buyer's Credit (PBC) and the Government Concessional Loan (GCL).
At the meeting, Mr Touhid requested China to reduce interest rates from 2-3 per cent to 1.0 per cent, waive commitment fee and extend loan-repayment period from 20 years to 30 years for both the PBC loan and GCL.
"We have so far received no written assurance from Beijing about the reduction in interest and extension of loan-repayment period by 10 more years," said a senior ERD official.
He said they had already requested China repeatedly to hold a bilateral meeting on the economic potential cooperation but received no reply yet.
"We are waiting for the reply as we need financial support for developing our infrastructure and socioeconomic condition," the official said.
Another senior official at the ERD, who preferred not to be named, acknowledged that the delays about the loan deals happened particularly from the Chinese side. These delays are associated with a number of factors, including project review to the signing of the loan deals, he added.
China's share in the total outstanding loan is about $6.0 billion, constituting some 8.60 per cent of the total outstanding amount, ranking fourth, according to an ERD document.

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