Chinese President Xi Jinping visited Bangladesh in October 2016.
Diplomatic relations between the Peoples Republic of Bangladesh and the Peoples Republic of China were established in 1976, five years after Bangladesh gained independence. The present-day Sino-Bangladesh relationship is characterized by close political, economic and military ties.
The matrix of Dhaka- Beijing relations permeates multiple avenues, ranging from strategic to commercial, from energy security to infrastructural. Of these the strategic ties are one of the most salient. Chinese ventures into infrastructure building and port development are aimed at consolidating Beijing's vision for a maritime corridor extending from the South China Sea to the Indian Ocean via the Bay of Bengal.
This corridor will help resolve the Malacca Dilemma by ensuring lesser reliance on the narrow Malacca Straits, which see transit of 80 per cent of China's oil supplies. In this context China is helping to develop the Chittagong port along the coast of Bangladesh. It is significant that Chittagong is in proximity to Kyakpiu, a Myanmarese port from where an oil pipeline is being built to Kunming.
If an oil pipeline is built from Chittagong, it can be parallel to the Myanmarese energy transit route originating from Kyakpiu and Sittwe, thus expanding a valuable energy corridor for China. Bangladesh too desires enhanced infrastructure. Dhaka has sought Chinese assistance in constructing a highway passing through Myanmar to Yunnan province of China.
China's current strategy in the Indian Ocean is to make its presence felt through building a credible connectivity strength. Being the world's second largest economy and having very high dependence on imported oil-all of which passes through the strategic channels located in the Indian Ocean-China is in a better position to have close ties with littoral states in the Bay. China is gradually expanding its economic and political influence among states in the region.
Despite the power gap between China and Bangladesh, the two countries have shown clear commitment over the years to building "a positive, cooperative and comprehensive relationship" that will surely pick up the momentum in the coming years. Indeed, Bangladesh's relations with China over the next decade clearly present a host of opportunities.
Never in history has the Middle Kingdom emerged as an indispensable economic partner to Bangladesh as it does today. Many people think that Bangladesh's comprehensive economic partnership with China could help Bangladesh become a manufacturing- trading nation pushing the latter's growth trajectory to a new height. Bangladesh is the third largest trade partner of China in South Asia.
But, the bilateral trade between them is highly tilted in favor of Beijing. Under the auspices of the Asia-Pacific Free Trade Agreement (AFTA), China removed tariff barriers to 84 types of commodities imported from Bangladesh and is working to reduce tariffs over the trade of jute and textiles, which are Bangladesh's chief domestic products. China also offered to construct nuclear power plants in Bangladesh to help meet the country's growing energy needs, while also seeking to aid the development of Bangladesh's natural gas resources.
China's mainly imports raw materials from Bangladesh like leather, cotton textiles, fish, etc. China's major exports to Bangladesh include textiles, machinery and electronic products, cement, fertilizer, tire, raw silk, maize, etc. China being the largest trade partner of Bangladesh, an imbalance in the bilateral trade relations in favor of China exists.
For example in 2006-2007, while Bangladesh's imports from China were as high as $3 billion, its exports to China amounted to just $200 million. In order to bridge this huge trade gap China has not only provided economic aid to Bangladesh but also signed the Asia - Pacific Free Trade Agreement (AFTA) to remove tariff barriers from commodities imported from Bangladesh.
China has also taken the initiative to develop natural gas resources and nuclear power plants in Bangladesh. The landlocked Yunan province of China has sought to engage in economic cooperation with Bangladesh to rectify its own regional inequalities and gain access to the Bay of Bengal. Bangladesh too, has offered to set up a Special Economic Zone for China. The 'Agreement on economic and technical cooperation' and the 'Framework agreement' on a concessional loan provided by China to Bangladesh are two other significant treaties signed by the two nations.
However, Economic Diplomacy has been a central aspect of both Bangladesh and Chinese foreign policy. During its remarkable economic rise, China has had used economic diplomacy primarily through trade, and the use of carrots as a means to accumulate or attract soft power. This was a part of the broader strategy formulated by think tanks in the PRC during the 1990s titled the new security concept.
It is referred to in the West as the period of "China's peaceful rise ". Bangladesh, too, with her major shift in foreign policy stance known as "Look East policy" has given economic diplomacy over traditional way of looking at each other a chance for economic development through establishing connectivity, an inclusive policy rather than feeling cold but cordial connections.
This stance for both the economy has been reflected in meeting in Kunming last year to advance discussion on regional cooperation in finance and investment. It is timely and appropriate that private sector is considering possible options of cooperation in finance.
In December 2013, in Kunming, Bangladesh, China, Myanmar and India together launched the BCIM process, at the inter-governmental level. It marked a significant point in moving BCIM Economic Corridor to the next level.
In a few weeks since the Kunming Meeting, there was an initiative to launch Pan Asia Stock Exchange, which was later abandoned to the establishment of Kunming Silk Road Stock Exchange. South Asian Federation of Exchanges (SAFE) led by Bangladesh (Chittagong Stock Exchange) has been in coordination for the process.
Currently, all four countries are undertaking detailed assessment, within respective countries, to assess and weigh possible options and modalities of engagement within BCIM. Cooperation in trade, investment and finance is one of the seven key areas in the scheme of things.
By early September 2015, the BCIM countries were supposed to meet at the second Meeting of the BCIM Joint Working Group, in Bangladesh. Bangladesh finalized their studies, synthesizes all aspects on a regional template and eventually worked on frameworks of cooperation.
The inter-governmental frameworks became ready sometime in 2015. These details for much of these are aimed at creating space for private sector in BCIM - to engage, utilize those and carry forward much of the countries' agenda.
In June 2014, Bangladesh Prime Minister Sheikh Hasina visited China. During her interactions with Chinese leadership and Chinese private sector, she echoed the same perspective and expectations. She proposed for deepening and developing regional value chain; establishment of investment forums; consideration of 'early harvest' in regional connectivity, trade and investment.
She also referred to look at possible 'quick impact' projects. Reflections on some result-oriented, time-bound collaboration would therefore become pertinent. The visit of Chinese President Xi Jinping to Bangladesh in 2016 heralded a new era of economic relations between the two republics.
Given Bangladesh's experience in regional cooperation, it could be underlined that even if initial initiatives are modest in size and scope, those would be important in building confidence and demonstrating the utility, potential and even gaps in implementation and coordination. Enterprises might help the Governments look at spaces where countries may need to work further - within and among governments - to facilitate movement of goods, services, investment and finance across the region.
Cross-border collaboration is an uncharted area and often may not be easy. Yet, within the Asia-Pacific, some of the regions have already made significant foray. Experience of ASEAN or GMS and even MERCOSUR may be worthy to look at.
You may assess how countries engaged and collaborated in spite of much diversity in levels of development. It would be useful to see how IT, related service sectors and broader development actors could be engaged to collaborate on finance and investment. Development and utilization of advanced IT-related technologies may be in order, especially to explore if certain innovation in finance could be developed to apply in the context of BCIM region.
The writer is former Secretary to the Government and