The geopolitical trajectory of Bangladesh experienced a paradigm shift during the Monsoon Revolution in August 2024, as Sheikh Hasina was removed from power and replaced by an interim government led by Nobel laureate economist Dr. Muhammad Yunus.
Dhaka’s foreign policy approach during the interim government is broadly characterized by ‘Hasina’s increasing dependence on India’ to ‘emphasis on developing relations with the United States (US) and the European Union as well as within the region’. Scholars are observing a visible shift in the balance of power and geopolitical reconfiguration in South Asia as a result of the change of regime in Bangladesh, located in a critical geostrategic position of South Asia.
A substantial facet of this reconfiguration was the Hasina administration’s growing reliance on India contributed to China’s discontent. This frustration was evident during her July visit to Beijing, coinciding with at the onset of opposition movements against her rule in the country. Expecting billions in aid, she was instead met with China’s refusal, prompting her early departure.
The visit revealed the Hasina government’s growing estrangement from China, despite its unwavering support in three consecutive controversial elections—2014, 2018, and 2024—due to increasing alignment with India. Amid regional tensions with India and the US in South Asia, China’s expanding engagement with Bangladesh is evident through various diplomatic, economic, and strategic strategies, particularly in the aftermath of the government’s fall in Dhaka.
Since 2009, the phenomenon of Bangladesh’s foreign policy, ‘India-friendly diplomatic posture’, has been a matter of apprehension for the Chinese policy-making community. Therefore, one of the reasons for China’s increased attention to Bangladesh in the post-Hasina period is as a greater regional strategy to counter India’s dominance and influence in South Asia, a region traditionally dominated by India’s sphere of influence. In response to the fall of Bangladesh’s pro-India government, China is striving to bridge the diplomatic foothold in both Bangladesh and India, aiming to strengthen its presence in Dhaka.
Unlike India and the US, which exercised caution, China welcomed the new Yunus-led interim government in Bangladesh immediately after its formation. At the same time, the Chinese Foreign Ministry’s regular briefing expressed a firm commitment to increase collaboration between the two governments, and to cooperate on all kinds of reforms of the interim government in the country.
The Bangladesh Nationalist Party (BNP), as a key political entity, engaged with Islamists, other parties, and civil society, visited China hosted by the Communist Party to reinforce ties with Beijing amid shifting political landscapes. The visit aimed to exchange expertise on China’s economic progress, technological innovations, education, government model, and cultural development to foster bilateral relations. Following the collapse of the ruling government, the Awami League, previously prioritized under Sheikh Hasina, saw a decline in influence due to its fragile political position. Diplomatic analysts note that both the BNP and Awami League have pursued parallel engagements with China for investment, while Beijing now prioritizes inclusive engagement with all parties irrespective of ideological divides owing to the absence of a democratically elected government in Dhaka.
The Indo-Pacific region has emerged as a key geopolitical competition, while regional and global powers are intensifying their strategic focus. As the China-India and China-U.S. rivalries escalate, Bangladesh, as a Bay of Bengal littoral state has faced China’s concerns in multiple times. Since the launch of the U.S. Indo-Pacific Strategy and the formation of QUAD, China has recurrently urged Bangladesh to distance itself from joining to counter Chinese national interests in the region. Moreover, as a strategic partner in China’s Belt and Road Initiative (BRI) within the Indian Ocean region, Bangladesh is being diplomatically encouraged to align with China’s broader geopolitical goals, particularly through ‘infrastructure diplomacy’ initiatives such as CMEC, BCIM and MSR.
China is deepening strategic engagement with Bangladesh’s new administration, prioritizing high-level dialogue. Bangladesh will join the Boao Forum for Asia this month, marking 50 years of ties, and Chief Advisor Dr. Yunus is set to meet President Xi Jinping. The special flight sent by the Chinese President as part of the visit conveys why Bangladesh is strategically important to China. This high-level bilateral visit marks a significant diplomatic milestone as the first direct engagement between China and chief of Bangladesh’s interim leadership.
The agenda for the upcoming visit of the Chief Advisor encompasses several critical issues, including the expansion of Bangladeshi exports to China, attracting more foreign direct investment and extending the repayment period of loans. Besides trade, investment and economic cooperation, approximately a dozen memorandums of understanding (MoUs) are expected to be signed on infrastructure, energy and economic cooperation.
Economically, China has been providing financial and engineering assistance to Bangladesh, especially in the implementation of numerous mega projects, including the Padma Bridge. Furthermore, China has made substantial investments in Bangladesh’s critical infrastructure, particularly in power generation, transportation, and connectivity. For the past two decades, China as a reliable partner has consistently maintained a long-standing commitment to foster economic and development ties with Bangladesh. Chinese firms operate within the country alongside Bangladeshi business entities, facilitating economic and infrastructural growth.
During the visit of the interim government’s foreign affairs advisor, as part of the negotiations for restructuring the debt taken from China, a request was made to reduce the interest rate on both the Preferential Buyers Credit (PBC) and Government Concession Loan (GCL) from 2-3 percent to 1 percent, eliminate the commitment fee, and increase the repayment period from 20 years to 30 years. In response to the request, Beijing responded positively by increasing the repayment period of the Chinese loan by 10 years to 30; there was also an assurance that it would consider reducing the interest rate.
Drawing parallels with Vietnam, when foreign advisor proposed the relocation of Chinese manufacturing plants to Bangladesh, particularly to the Special Economic Zones (SEZs) of China in Chittagong, along with the establishment of direct air connectivity between Chittagong and Shanghai. In response, Chinese policymakers affirmed their recognition of Bangladesh as a viable destination for industrial relocation.
For almost two decades, China has maintained its position as Bangladesh’s largest trading partner. In a meeting with Bangladesh’s trade advisor, Chinese Ambassador to Bangladesh Yao Wen expressed hope that the two countries’ trade gap could be reduced. In 2020, China provided duty-free benefits to 97 percent of Bangladeshi products, which was increased to 98 percent in 2022. Moreover, China’s decision to grant 100 percent duty-free trade benefits starting from December 1 marks the anniversary of their diplomatic relations since December 1, 1975, reflecting a strategic move to deepen economic cooperation.
Under the Awami League government, China’s concerns over Sheikh Hasina’s reliance on India intensifies, particularly after India secured Mongla Port’s management bypassing Chinese interest and blocked China’s Teesta River barrage proposal. After 12th controversial national polls, Sheikh Hasina’s visit to China, following her trip to India, highlighted economic cooperation, but China prioritized political engagement. However, the major loan agreement did not materialize due to this bargaining reality.
Militarily, China has long been a major supplier of defense apparatus to Bangladesh’s armed forces, accounting for more than 70% of Dhaka’s military imports. The interim leadership correspondingly seeks to strengthen defense cooperation with Beijing. Concerning this matter, a group of Dhaka based diplomats contemplate that China will not take any strong steps in the military field unless an elected government is formed.
Bangladesh has long been dependent on China for all categories of weapons, although there are doubts about China’s quality around the world. However, recently, several Western countries, including the US and Turkey, have been added to this list. The main reasons for buying military equipment from China depict cost savings, technical support, and long-term defense strategy. In addition, China provides Bangladesh with technical assistance and training, snowballing its weapons management capabilities in the long term. A group of security analysts have suggested diversifying to address long-term military dependency by ‘over-reliance on China for arms’. Essentially, China is keen on military arms trade with Bangladesh for strategic and economic reasons in South Asia.
The recent diplomatic deadlock between ‘India-locked’ Bangladesh and India has presented a strategic opening for China, fostering a further strengthening of Dhaka-Beijing relations. India has traditionally considered China a threat to its strategic calculus in South Asia. As Dhaka’s largest trading partner and a key supplier of military equipment, Beijing’s growing influence has faced consistent objections from New Delhi since the Hasina administration. Given China’s close ties with the current interim government, Dhaka is experiencing mounting pressures from major powers in the Indo-Pacific Strategy and the QUAD alliance, including India and the US, to maintain its previous strategic hedging.
China was hesitant to establish strategic alignment with Bangladesh due to Sheikh Hasina’s India-friendly foreign policy. China has now openly intensified its efforts to expand its influence in Bangladesh, especially through diversification of military and economic cooperation, which is scholarly regarded as a counterbalance strategy of India in South Asia.
After the transfer of state power in Dhaka through mass movements, tensions caused by border killings and public protests on both sides of the border, the creation of public anger against India through various propaganda about Bangladesh in various Indian media, the violation of the Vienna Convention through the attack on the Bangladesh Assistant High Commission in Agartala, India, and the former Prime Minister’s asylum in India, various unequal agreements with India with the previous government came to light. Due to the widening divide between Dhaka and New Delhi, the previously preeminent relationship has deteriorated to its lowest level.
Several issues can be identified as major obstacles to India’s diplomatic relations with the current interim government, such as the atrocities against religious minorities, including Hindus, in Bangladesh, the ‘gradual deterioration’ of the law-and-order situation in Bangladesh, and doubts about the ‘inclusive’ and ‘participatory’ nature of the next elections in Bangladesh. Moreover, Pakistan and Bangladesh have become closer since Sheikh Hasina was ousted, which is acting as a general ‘anti-India sentiment’ in the politics of both nations. Many New Delhi based analysts claim that Beijing prompted as a match-maker in crafting this new chapter in Dhaka’s relations with Islamabad. Meanwhile, regular briefings of the Indian Ministry of External Affairs emphasize that the prospect enhancing bilateral ties is contingent upon the formation of an elected government in Dhaka.
In 2023, India’s ‘medical tourism’ sector generated about 9 billion US dollars in revenue, which plays a major role in the country’s economy. After August 5, the number of Bangladeshi patients has decreased significantly due to the 80 percent reduction in visas for Bangladeshis. Owing to this development, the total number of foreign patients in Indian hospitals has come down by almost half. Against this backdrop, China has welcomed Bangladesh’s proposal to build a 1,000-bed Bangladesh-China Friendship Hospital in Purbachal, Dhaka as an ‘alternative healthcare destination’ for Bangladeshi patients. Since the construction of the new hospital will take several years, considering the visa ban in India, the political situation and the needs of the people, China has agreed to Dhaka’s request to designate at least four hospitals in Kunming for the treatment of Bangladeshi citizens, while first group of Bangladeshi patients, doctors, travel agencies had already departed for China last week.
While China’s growing involvement creates diplomatic, economic and strategic opportunities for Bangladesh, it also poses significant risks. Despite the ups and downs of Bangladesh’s diplomatic relations with India, Bangladesh’s relations with China have been positive under all democratic and military governments. A recent study by the Dhaka based think tank, the Center for Alternatives, highlights the China’s national image in Bangladesh, with approximately 90 percent of Bangladeshi respondents expressed a positive stance toward China. Moreover, there is a consensus among all political parties in Dhaka on establishing and maintaining all sorts of relations with China.
Precariously, over-reliance on Chinese debt could increase the risk of falling into a ‘debt trap’ like Sri Lanka and Pakistan, which could weaken Bangladesh’s economic stability, state capacity and sovereignty. Since Bangladesh under Hasina has not joined any US-led alliance in the region to deter China’s dominance, created diplomatic obstacles with Western allies. In addition, efforts to increase military cooperation with China and Pakistan are increasingly distancing itself from its larger neighbor, India, which could increase regional tensions and pose strategic challenges for Bangladesh. Moreover, China’s regional geopolitical ambitions limit its involvement in resolving the Rohingya crisis, which may discourage major powers from supporting Bangladesh, particularly if Dhaka deepens its alignment with Beijing. In light of all these realities, Bangladesh should carefully navigate China’s diplomatic, economic and strategic interests and make foreign policy decisions wisely.