Chinese President Xi Jinping signed loans and investment deals with Bangladesh worth about $20 billion on Friday, seeking to increase Beijing’s influence in a country closely allied to rival regional power India.
Xi hailed what he called a “historical turning point” in relations with the impoverished South Asian nation after talks with Prime Minister Sheikh Hasina.
A senior minister who attended the closed-door talks said the loan agreements from Beijing, which will fund key infrastructure projects such as roads and railways as well as a new industrial park, totalled around $20 billion.
“Bangladesh and China have also identified other projects, whose total loans and investment will surpass $50 billion,” he told AFP on condition of anonymity.
Xi said both sides had agreed to look into a free-trade agreement and expressed hopes the visit would “chart the course for the future growth of China-Bangladesh relations”.
It is the first visit in more than three decades by a Chinese president to Bangladesh, which lies firmly within New Delhi’s sphere of influence.
Impoverished Bangladesh needs tens of billions of dollars of investment in its transport infrastructure and energy production to boost its flagging economic fortunes and create jobs for its 160 million people.
But analysts said Hasina would have to maintain a careful balancing act between cultivating economic ties with China, already the country’s largest trading partner, and maintaining good relations with India.
New Delhi has long backed Hasina and held off from criticising her re-election in January 2014 in a contest that was boycotted by the opposition and dismissed as “not credible” by Western nations.
“Bangladesh is in India’s sphere of influence,” said Ali Riaz, political science professor at Illinois State University in the United States.
“Understandably, India is watching Bangladesh’s growing ties with Beijing. But Bangladesh is improving ties with China carefully so that it does not jeopardise its relations with India,” he told AFP.