Bangladesh urges China to reduce interest rate on loan, China expresses support for sovereignty of Bangladesh

Chinese Foreign Minister Wang Yi. File
| Photo Credit: Reuters

Bangladesh has urged China to reduce interest rate on loans and requested Beijing to extend loan repayment period from 20 to 30 years. The discussion in this regard took place between Chinese Foreign Minister Wang Yi and the Adviser on Foreign Affairs of the interim government of Bangladesh Touhid Hossein who visited China this week where both sides expressed commitment for “continued cooperation” under the Belt and Road Initiative (BRI).

“Bangladesh has requested China to reduce interest rate from 2-3% to 1%, waive commitment fee and extend loan repayment period from 20 years to 30 years for both the Preferential Buyer’s Credit (PBC) loan and Government Concessional Loan (GCL),” said the Ministry of Foreign Affairs (MoFA) of Bangladesh in a statement.

Mr. Hossein is paying a four-day official visit to China, his first since the interim government took charge in August. Significantly, China expressed support for “sovereignty and territorial inteigrity” of Bangladesh. Mr. Hossein’s visit is the first since China announced plans to build a mega dam on Yarlung Tsangpo which flows into India as Brahmaputra which is known as Jamuna and Meghna in Bangladesh.

The two sides signed an MoU on sharing of hydrological information of the Tsangpo and Jamuna.

“Recognising Bangladesh’s strategic position, two sides emphasised continued cooperation under the Beltand Road Initiative (BRI). They expressed their willingness to work closely on proposed Chinese funded projects,” said the Foreign Ministry in a statement.

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Mr. Hossein also sought closer cooperation between the two sides to ensure access to quality health care for citizens of Bangladesh.

Responding to Dhaka’s request, Foreign Minister Wang said China has decided to “especially designate 3 to 4 recognised hostpitals in Kunming for treatment of Bangladeshi parents”. Mr Wang welcomed Bangaldesh’s proposal of establishing  “a specialized tertiary level Chinese hospital” in Dhaka. Mr. Wang gave positive response to Bangladesh’s requests for financial, technical and capacity building in areas such as railway, education, agriculture, water resource management, livestock, fisheries, shipbreaking, sustainable and renewable energy.

Bangladesh and China also discussed plans to hold celebrations for the 50th anniversary of the establishment of bilateral relation. Foreign Minister Wang Yi reminded the visiting Bangladeshi delegation that the people of Bangladesh have given “important responsibility to Professor Yunus” and expressed support for the interim government’s reform programme.

“China would continue supporting projects conducive to the livelihood of the people of Bangladesh,” Foreign Minister Wang Yi declared. Both sides reviewed various China-funded projects like Dasherkandi Sewage Treatment Plant, Upgradation and Modernisation of Mongla Port, establishing digital connectivity.

Mr. Wang and Mor. Hossein also discussed the Rohingya crisis. Since the fall of the Sheikh Hasina government in August, China has reoriented itself and has reached out to many political groups that were earlier considered outside the realm of Awami League-centric politics of Bangladesh. Earlier last year, Beijing hosted delegations from Jamaat-e-Islami Bangladesh.