China Boosts Engagement with Bangladesh amid COVID Crisis

Bangladesh was reported as the fastest growing economy of South-Asia in 2019. It had been growing at seven percent for the last five years and was hoping to receive the status of developing country by 2024[1]. This target now seems impossible with the current COVID-19 pandemic which has affected the economy of the country very badly. According to the latest World Bank Report it is estimated that the growth rate of Bangladesh will be between 2-3 percent in 2020 and will further drop 1.2-2.9 percent in 2021.[2] The road ahead for the country’s economic situation looks tough. In this crisis time, one country which has been in constant touch with Bangladesh and has helped Bangladesh in every form is China.

The relationship between Bangladesh and China has transformed over the years and in 2016 these two countries became ‘strategic partners’[3] and in the same year, Bangladesh signed China’s Belt and Road Initiative (BRI). Since then the level of engagement has increased in various sectors such as infrastructure, power, technology, culture, and tourism. Both have them have also enhanced their relationship in the defence sector. Bangladesh is the second highest importer of arms from China after Pakistan as 20 percent China’s arms sales are to Bangladesh.[4]

China has come to Bangladesh’s help in terms of medical equipment and doctors, loan and granted a trade waiver. The Communist Party of China has also offered to help with technical and financial support to Bangladesh during this pandemic and other pandemics if Bangladesh agrees to the sister-city alliance proposal between both the country.

Mask Diplomacy and Health Philanthropy

China’s ‘charm offensive’ during the pandemic has been employed through the donation of medical aids across the globe. The donation of medical testing kits, masks, ventilators, personal protective equipment (PPE) kits which are vital for fighting the COVID-19 has been termed as ‘mask diplomacy’ and this diplomacy has been carried out by Chinese governments and Chinese companies in Bangladesh.

In Bangladesh, the first three COVID-19 cases were reported on 8th March 2020 by Institute of Epidemiology, Disease Control and Research (IEDCR).[5] China since then has provided Bangladesh with 3 million surgical and N-95 masks, 1,10,000 sets of personal protective equipment (PPE) kits, sanitizers, testing kits, thermometer guns, and ventilators.[6]  It has sent a 10 member medical team to Bangladesh in June for two weeks to provide consultation and train Bangladeshi medical professionals on pandemic control, patient treatment, and laboratory tests.[7]

Along with mask diplomacy, health philanthropy has also been employed by various Chinese companies towards China’s allies during this pandemic. In Bangladesh, Jack Ma Foundation and Alibaba Foundation donated 40,000 testing reagents and 3,00,000 masks to Bangladesh.[8]  Power China Chengdu Engineering Corp Limited has also donated 30,000 surgical masks, 3,000 K-90 face masks, and 545 sets OF PPE kits, thermometer guns and goggles to Dhaka Water Supply and Sewage Authority.[9]

Financial Help and Trade Waiver

The economy in Bangladesh has been hit badly due to this pandemic as readymade and garment (RMG) industry which is the backbone of its economy has been affected badly. This sector contributes 14 percent to Bangladesh’s gross domestic product and played a crucial role in poverty alleviation in the country as this industry provides jobs to 3.5 million women and 4.1 million in total.[10] The impact on the RMG industry will be felt by the large sections of the society due to a drop in demand which will result in a close down of factories and job losses. This will push a large number of people below the poverty line.

To aid Bangladesh, China-backed Asia Infrastructure Investment Bank (AIIB) announced that it will co-finance a loan with Asian Development Bank (ADB) USD 250 million loans.[11] As per the statement by the AIIB, this loan aims to provide Bangladesh with budget support to help the most vulnerable of the society, provide social safety nets to those who have lost jobs in the informal sectors.

China also announced a tariff exemption for 97 percent of export products of Bangladesh.[12] This will allow a total of 8,256 goods exempted from the Chinese tariff from 1st July. This tariff exemption will help Bangladesh’s economy in a big way. It will help Bangladesh’s exports which have been badly hit due to a fall in the demands of its RMG industry products form the USA and Europe. It will also help in mitigating job losses. This move will reduce the trade deficit between the two countries. This move will aid the leather industry in a big way. At present, this industry is the second highest exported item[13] to China despite under the tariff list. Now with the exemption, the export of leathers to China will increase and have a positive effect on 8,50,000 people[14] who are directly or indirectly employed in this industry.

Conclusion

China’s engagement with Bangladesh during the pandemic has to be multifaceted from mask diplomacy to economic and cultural diplomacy. These moves show that it is taking the maximum advantage of this crisis to increase its engagement with Bangladesh in as many areas as possible. Bangladesh is fighting a two-front crisis, one on the health front due to its weak health infrastructure and other on the economic front due to a drop in exports and subsequent job losses. China knows that Bangladesh is looking for support to fight this pandemic. By giving loans and exempting tariffs on a large number of export items China’s help will directly benefit the common peoples and generate a positive image about China.

These efforts will also benefit China’s relations with Bangladesh’s government and will also aid its BRI projects in the country. The motive behind these efforts during this time seems clear. China wants it to be remembered in Bangladesh as a country that helped it the most during its COVID time and not as a country that mishandled the pandemic in its own country.

End-Notes

[1] “Bangladesh eligible for UN ‘developing country’ status”, BDnews24.com, 17 March 2018, Available on: https://bdnews24.com/bangladesh/2018/03/17/bangladesh-eligible-for-un-developing-country-status, Accessed on : 20 June 2020

[2] World Bank, South Asia Economic Focus, 2020, Report on Impact of COVID-19 on South Asian Economies, Available at:  https://www.worldbank.org/en/region/sar/overview, Accessed on : 22 June 2020

[3] “Is the Strategic Partnership With China Luring Bangladesh into a Debt Trap?”, The Wire, 12 July 2019, Available on: https://thewire.in/south-asia/china-bangladesh-relationship-debt-trap, Accessed on : 22 June 2020

[4] SIPRI, Trends in International Arms Transfers, 2019, Report on International Arms Trends and Transfers, Available at: https://www.sipri.org/publications/2020/sipri-fact-sheets/trends-international-arms-transfers-2019, Accessed on : 19 June 2020

[5] Kamran Raza Chowdhury, “Bangladesh Confirms First COVID-19 Cases on Its Territory”Benar News, 8 march 2020,  Available at: https://www.benarnews.org/english/news/bengali/first-coronavirus-cases-03082020144800.html, Accessed on : 21 June 2020

[6] “Chinese medical expert team arrives in Bangladesh to help fight COVID-19” 8 June, 2020, Available at: http://www.xinhuanet.com/english/2020-06/08/c_139124099.htm, Accessed on: 21 June 2020

[7]  Ibid

[8] “Bangladesh receives medical supplies from Jack Ma, Alibaba foundations to fight COVID-19”, Available at http://www.xinhuanet.com/english/2020-03/29/c_138928560.htm, Accessed on: 21 June 2020

[9] “Chinese firm offers medical supplies to Bangladesh for COVID-19 fight” , Available at:  http://www.xinhuanet.com/english/2020-04/07/c_138955230.htm, Accessed on : 21 June 2020

[10] Bangladesh Bureau of Statistics, Quarterly Labor Force Survey Bangladesh (2015–16), Available at  http://bbs.portal.gov.bd/sites/default/files/files/bbs.portal.gov.bd/page/96220c5a_5763_4628_9494_950862accd8c/QLFS_2015.pdf, Accessed on: 21 June 2020

 [11]“ China-backed AIIB approves $250 million loan for Bangladesh’s COVID-19 response” Reuters, 21 May 2020, Available at https://in.reuters.com/article/us-health-coronavirus-aiib-bangladesh/china-backed-aiib-approves-250-million-loan-for-bangladeshs-covid-19-response-idINKBN22X08Z, Accessed on : 21 June 2020

[12] “China offers Bangladesh tariff exemption for 97% of exports from Dhaka amid tensions with India” 20 June 2020, Available at: https://www.businessinsider.in/policy/foreign-policy/news/china-offers-bangladesh-tariff-exemption-for-97-of-exports-from-dhaka-amid-tensions-with-india/articleshow/76482640.cms, Accessed on : 21 June 2020

[13] Bangladesh Bank, Annual Review of Export Receipt, 2015-2016, Available at: https://www.bb.org.bd/econdata/openpdf.php?i=7, Accessed on : 21 June 2020

[14] Leathergoods & Footwear Manufacturers & Exporters Association of Bangladesh, Investment Prospects in Bangladesh Leather Section, 2014, Available at:  http://lfmeab.org/old/images/krc/Investment_Prospects_in_Bangladesh_Leather_and_Footwear_Sector_KRC_LFMEAB.pdf Accessed on : 21 June 2020