According to the joint statement issued on the visit of Chinese President Xi Jinping, various agreements were signed between China and Bangladesh. They have "elevated" their cooperation to a "Strategic Partnership" in bilateral, regional and international spheres, under the umbrella of "the Belt and Road Initiative" (OBOR). This certainly is an important regional development as Bangladesh formally joined OBOR during the visit, first by a Chinese head of state in the past 3O years.
Introduced in 2013, the OBOR is the centerpiece of China's modern economic diplomacy from which emanate other agreements like Silk & Maritime routes, China Pak Economic Corridor, BCIM and GMS Corridors. OBOR refers to building a Silk Road Economic Belt and the 21st Century Maritime Silk Road aimed at building a trade and infrastructure network, connecting Asia with Europe and Africa including revival of ancient trade routes between China and the rest of the world. Bangladesh is latest addition in the strings proving the success of Chinese Multi-pronged economic diplomacy being implemented with a lot of fun-fare by new (5th) generation of leadership in modern China.
Silk Road fund and AIIB and bilateral/institutional investments are important supporting actions by China. Ultimate purpose is building strategic linkages for facilitating trade and investment and geostrategic goals. The initiative is all the more significant given the existing strategic alignments in Asia where global wealth is shifting and competing interests of stakeholders are causing regional blocks and partnerships to achieve their respective national interests.
The strategic context Bilateral trade is modest standing around $7 billion. To avoid realistic response about upcoming cooperation, PM Hasina tactfully states that Bangladesh wants friendly cooperation with all countries but such overtures with major thrust on economic diplomacy do not constitute a zero-sum game for Bangladesh and China. Bangladesh is a strategic factor on China's geopolitical agenda for more accessible sources of energy including its natural gas reserves, coal mining & access to Chittagong port for expanding the outreach to the Indian Ocean.
Sheikh Hasina's government is focused on increasing investment opportunities, both domestic and foreign, in order to create more job opportunities and produce import-substituting goods and establishing industries through creation of 'Special Economic Zones (SEZs); China is potential candidate for such assistance given its varied experience and can bring in $5-7 billion in Chinese investment that speaks of scale benefits from China. Indian investment in BD could fetch one billion dollars after 2010 initiatives. The current multi-billion agreements are certainly Big Pocket games which always attract the people around the world in the era of dwindling Overseas Development Assistance/FDI by developed countries after global economic and financial crisis 2008.
Actions like starting the feasibility studies on the establishment of China-Bangladesh Free Trade Area are the developments that will adversely impact the competitiveness of Indian goods in Bangladeshi market vis-à-vis Chinese products and increased investment because labour costs in China are six times higher than Bangladesh. It would be possible if there is a balancing act for cultivating economic ties with China and rather more strategic relations with India without losing much needed investment from China. Perhaps both Bangladesh and India realise the strategic implications of such assistance by China.
The overriding aim of OBOR is to boost development process in other countries and consequently their trade with China and its investment in designated regions. There are trans-regional aspects also. Dhaka gave its consent to a Chinese proposal for the construction of a transnational highway, connecting the Indian state of West Bengal and the south-western Chinese city of Kunming, via Myanmar and Bangladesh, coastal zones & Padma rail-road Bridge that have no small strategic implications for all the BCIM countries.
India is best poised to benefit from the Bangladeshi market, but it is worthwhile to state that increase Chinese investments would certainly ultimately may succeed in bringing Bangladesh, Iran and Afghanistan on her side, while Pakistan is already a trusted friend of China, hence isolation of India in the region may appear a far cry but can't be ruled out in medium to long term.
Maritime cooperation is equally important in view of forthcoming transport and logistics corridors. China-Bangladesh agreement cover this while Indian companies have also expressed interest in funding the construction costs of deep-sea port which could turn out to be strategically significant for India once the country is granted transit access.
Although India has multi-pronged efforts and always successfully capitalised on its own strategic and economic ventures in Bangladesh. But it is known fact that given the explosive nature of Bangladeshi politics and projects like Teesta water pact and the land boundary agreement delayed due to domestic politics in India are some of the irritants that can turn the things turtle more so if their bilateral relations are not consolidated.
Future scenario will very much hinge upon the management of the affairs by Bangla leaders that appear to be sound on such matters and better than many regional countries. It is yet to be seen as to whether these overtures will simply mean the start of a more multi-faceted outreach with China in other sectors like defense affairs as a strategic partner while simultaneously Bangladesh can balance its ties with India etc with ostensible purpose of reducing dependency on it. Still the developments are very significant in the region.
The case of Pakistan is now different in the new regional scenario and India-Bangladesh cooperation.Unlike India, Pakistan never expressed its anger over building of such corridors by China with India etc. But unfortunately our statements and response to India's objections on CPEC don't contain the references to BCIM and GMS and other corridors and initiatives between India and China.
The new Chinese overtures could be a small opportunity when CPEC is also in the field with large stakes and needs to be completed under all circumstances. Pakistan need to strategically review the major contours of Chinese multi-facetted and multi-pronged economic diplomacy for creating some room to maneuver in region in general and for regaining the ground lost recently in bilateral relations with Bangladesh in particular in due course of time. The diplomacy is always an art of making possible the things which ordinarily appear impossible.
(The writer is a freelancer and an ex-diplomat)