Crisis in Bangladesh: Is China seizing the opportunity?

Under Prime Minister Sheikh Hasina, China struggled to advance its political, economic, and strategic interests in South Asia, using Dhaka as a potential base. However, with Hasina's ousting and the establishment of an interim government led by Nobel laureate Muhammad Yunus, Bangladesh seems to have become a playground for China’s questionable politics.

Shortly after Chinese Ambassador to Dhaka, Yao Wen, met with leaders of the Bangladesh Nationalist Party, the hardline Islamist group Jamaat-e-Islami, and students who played pivotal roles in Hasina's removal, Chinese Navy ships docked in Bangladesh from October 12-15. This visit signals Beijing’s intentions to influence the shifting geopolitical landscape in the region.

The docking of the Qi Jiguang and amphibious dock landing ship Jingganshan at Chittagong Port marked a notable event for the new interim government. China’s Defense Ministry described the three-day visit as a goodwill gesture aimed at strengthening cooperation with the Bangladesh Navy and fostering “a maritime community with a shared future.”

Prior to this, Chinese Foreign Minister Wang Yi met with Chief Adviser Muhammad Yunus at the UN Headquarters on September 26, 2024. Although Yunus reported discussions on bilateral relations and solar panel investments, experts suggest that defense and strategic issues were likely also on the agenda.

Historically, even during Hasina's administration, Bangladesh facilitated Chinese defense engagement. In 2016, China provided two refurbished submarines to the Bangladesh Navy for $205 million, and in May 2024, the countries conducted their first bilateral military exercise, ‘Golden Friendship.’ Moreover, a $1.21 billion submarine base was commissioned in Cox's Bazar to accommodate multiple submarines and warships.

Notably, Hasina’s government had previously resisted any moves that could destabilize regional security. In November 2020, Bangladesh declined a visit from the Chinese Defense Minister after his trip to Nepal. Additionally, Dhaka's Indo-Pacific strategy, released in April 2023, emphasized adherence to the United Nations Convention on the Law of the Sea (UNCLOS) and advocated for a free and open Indo-Pacific, which Beijing viewed as a shift toward the US-led Quad.

Bangladesh's geopolitical significance is amplified by its location connecting South and Southeast Asia. With the interim government now in place, China sees an opportunity to expand its influence, akin to its actions in Myanmar following the 2021 military coup.

China has invested over $25 billion in various projects in Bangladesh, making it the second-largest investor in South Asia after Pakistan. These projects include bridges, roads, railways, airports, and power plants, primarily funded through loans under the Belt and Road Initiative. By the end of 2023, Chinese investments in Bangladesh had reached approximately $1.4 billion, with around 700 Chinese companies operating in the country.

On the trade front, China is Bangladesh's largest trading partner. Bilateral trade surged from $3.3 billion in 2009-10 to over $22 billion in 2023, with a slight increase in the early months of 2024.

Given its current economic challenges—including a high financial account deficit, negative balance of payments, and dwindling foreign exchange reserves—Bangladesh seems increasingly reliant on Chinese support. The recent hosting of Chinese naval ships underscores this reality, suggesting that a crisis-hit Bangladesh may be compelled to align closely with China’s interests.