Bangladesh’s Pivot to China: From Balance to Realignment

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On 19 October 2025, a massive rally was held at Chittagong University, Bangladesh, demanding the immediate implementation of China’s Teesta River Comprehensive Management and Restoration Project, to ensure that Bangladesh receives its "fair share" of the river water. This agitation comes as a wave of such demonstrations erupts across the Rangpur division in northern Bangladesh, with the Ganga Water Sharing Treaty with India set to expire in 2026. Strained ties with New Delhi have cast apprehensions about the terms of its renewal. The dispute over sharing water from the Teesta River is the longest-standing point of contention between Dhaka and New Delhi. It is also the sternest criticism levelled against the former Bangladesh administration led by Prime Minister (PM) Sheikh Hasina, for her prioritisation of the neighbourhood and insistence on resolving the issue in collaboration with India, despite the Chinese offer to manage the crisis. This contributed to her ouster from power in August 2024. Amid this climate of uncertainty, Dhaka’s new leadership is redefining its external alignments.

Not only is Bangladesh, with its developing economy and burgeoning youth population, a sizeable market for Chinese products, but it also holds strategic potential for Beijing.

Nonetheless, a year into the regime change, Bangladesh's foreign policy is in transition, with a pronounced tilt towards China, replacing the Awami League’s earlier ‘diplomacy of balance’ with India. Upon his appointment as the Chief Adviser of the interim government, Muhammad Yunus chose China as the destination for his first official visit. The tour was strategically significant as the interim government relies considerably on Chinese investments to not only develop the country but also strengthen its standing in a politically turbulent environment. The March 2025 visit, marking the 50th anniversary of diplomatic ties between the nations, culminated in Bangladesh securing US$2.1 billion worth of investments and grants from China, bringing the total Chinese investment in Bangladesh to nearly US$42 billion by the Fiscal Year (FY) 2024–25. Yunus requested that the interest rates of Chinese loans be reduced and that a waiver of commitment fees be implemented on Chinese-funded projects. For enhanced economic cooperation and the latter’s green transition, he also requested that Beijing facilitate the relocation of Chinese manufacturing industries to Bangladesh. 

China responded with alacrity to Bangladesh’s diplomatic outreach, with President Xi Jinping personally greeting the Chief Adviser and hosting a high-level discussion at the Great Hall of the People in Beijing. However, Beijing’s efforts for increased engagement have not been limited to exchanges with the interim government alone, which, after all, is a temporary arrangement. It has been steadily engaging with several power centres that are increasingly gaining ground in the country. Most prominent among them is the Jamaat-e-Islami (JeI), a political party reported to be “rabidly anti-India”,  “stridently pro-Pakistan”, and one which has reportedly never criticised China for its treatment of Uyghurs. In September 2024, the Chinese Ambassador to Bangladesh, Yao Wen, met with Jamaat's Ameer (Chief), Shafiqur Rahman, marking the first visit by a foreign diplomat to the party's Dhaka office since 2010. He publicly referred to the group as a "well-organised political party". Soon after, in December 2024, a 14-member delegation of Islamist party leaders from Bangladesh, led by a top JeI official, visited China. In July 2025, the Chinese Embassy in Dhaka hosted a reception for a JeI delegation. Two months later, in September, a high-level delegation from the Chinese People's Institute of Foreign Affairs met with leaders of the JeI in Dhaka.

Given these frequent interactions, it is not surprising that China is being viewed favourably by a large section of Bangladesh’s youth, especially as the Islami Chhatra Shibir—the student wing of the JeI—has recently won student elections in important academic institutions of the country, including Dhaka University and Chittagong University. Coupled with raging anti-India sentiments fanned by opposition to the former Awami League government, the Chittagong demonstrations for implementing China’s Teesta Project, even at the cost of India’s strategic sensitivities, showcase the success of Beijing’s diplomatic manoeuvres. 

China and Bangladesh’s All-Round Strategic Partnership

Not only is Bangladesh, with its developing economy and burgeoning youth population, a sizeable market for Chinese products, but it also holds strategic potential for Beijing. Situated at the peak of the Bay of Bengal, with India’s Northeast and the Himalayan countries of Nepal and Bhutan as its hinterland, Bangladesh is ideally located to provide a maritime access to China’s landlocked western provinces. Furthermore, it provides a foothold in the Bay of Bengal to ascertain freedom of navigation along the important shipping routes that are vital for the Chinese economy, especially as Beijing suffers from the ‘Malacca Dilemma’. The United States' (US) renewed interest in South Asia—especially Bangladesh, Japan’s efforts to forge ties with Bangladesh via developmental partnerships, and India’s natural partnership with the country as neighbours—have further spurred China to bolster its influence in Bangladesh. Thus, China places a high value on its ties with Dhaka. 

From supporting West Pakistan in the Liberation War of 1971 and vetoing Bangladesh's entry to the United Nations (UN), China has warmed up to the country, with official ties established in 1975. Economic cooperation has primarily driven this partnership, with China surpassing India in 2006 to become Bangladesh's largest trading partner. This shift was noteworthy as India and Bangladesh share the fifth-largest border, and trade occurs via both formal and informal means. Between August 2024 and August 2025, the period of the regime change, Bangladesh’s imports of Chinese goods increased from US$1.54 to 1.92 billion (25 percent), while its exports to China increased significantly from US$90.4 to 130 million (44.1 percent). Bangladesh enjoys zero-tariff access to 99 percent of its goods in the Chinese market under the Asia-Pacific Trade Agreement. However, it is set to lose its Least Developed Country (LDC) status and its support measures next year. Nonetheless, China has agreed to extend the zero-tariff policy till 2028.

Furthermore, China is also Bangladesh's largest developmental partner. Since 2016, when Dhaka joined Beijing’s flagship Belt and Road Initiative (BRI), it has constructed 12 roads, 21 bridges, and 27 power plants in Bangladesh (till 2023). It has helped build parts of the Chattogram and Mongla seaports. It has also helped construct the Padma Bridge, which is expected to boost Bangladesh's Gross Domestic Product (GDP) by 1.2 percent, and has reportedly generated 550,000 new jobs in the economy. The pledge by Chinese firms to invest US$2.1 billion in the developing Chinese Industrial Economic Zone (CIEZ) has bolstered Dhaka’s trust in the Chinese economy. Not only has the interim government fast-tracked the development of the CIEZ, but it is also planning to establish two more economic zones exclusively for Chinese investors. 

Beyond trade and development, Bangladesh also signed the landmark defence pact with China in 2002, marking its first defence cooperation agreement with any country. Since then, Bangladesh has purchased missile launchers, fighter aircraft, two Ming-class submarines, and several weapons systems, making China the biggest arms supplier to Bangladesh. Between 2019 and 2023, China supplied 72 percent of Bangladesh’s arms. Beijing has also built Bangladesh's first submarine base, the BNS Sheikh Hasina, between 2018 and 2023. Bangladesh is on the short list, maintained by the US Department of Defence, where China is likely to establish overseas military facilities. After the regime change, Pakistan has upped its efforts to compel Bangladesh to purchase the 12 J-10C fighter jets from China. However, Dhaka is trying to diversify its defence partnerships, owing to recent disappointments with the quality of Chinese weaponry it received. 

However, with the interim government’s proclivity towards China, the already-strained ties with New Delhi may begin to fray, especially if Dhaka overlooks India’s strategic sensitivities, which are closely tied with Beijing’s growing presence in the region.

True to the Chinese pattern of engaging with government and the people, cultural relations are instrumental in fostering Sino-Bangladesh ties. Most Chinese businessmen learn to speak colloquial Bengali fluently before engaging in trade with the people of Bangladesh. As an act of reciprocal kindness and to leverage any future job opportunities that may arise, the Bangladeshi government seems interested in advancing the Chinese language in Bangladesh. Learning Mandarin has received a renewed focus since Yunus's interview with China Global Television Network (CGTN). Currently, there are two Confucius Centres in Bangladesh, one at Dhaka University and the other at the North South University. Yunus seeks to establish more such centres. The Chinese success with the people of Bangladesh is also largely due to a popular perception that Beijing follows a policy of non-interference in their internal political affairs—a contrast often drawn with India’s more visible engagement. 

Future Prospects

Following Hasina’s exit, Bangladesh appears to have adopted a new direction in its foreign policy of “reaching out to everybody.” However, its clear prioritisation of China raises a question on the country’s neighbourhood policy. India was Bangladesh’s all-weather friend, a necessity more than a convenience, as the two countries share not only land and maritime borders but also common resources and people who share familial bonds, common language, culture, and heritage. Naturally, New Delhi and Dhaka had a mutual and organic inter-dependence that ranged from trade in essentials to foreign direct investments, developmental partnerships, medical tourism, and forging connectivity links. 

However, with the interim government’s proclivity towards China, the already-strained ties with New Delhi may begin to fray, especially if Dhaka overlooks India’s strategic sensitivities, which are closely tied with Beijing’s growing presence in the region. This is the reason why Hasina opted to settle the Teesta issue with India, as accepting the Chinese offer would have brought Beijing too close to the Indian border. It is unlikely that the interim government will make the same choice, especially since it has already sought Chinese loans worth approximately INR 47.6 billion to fund the Teesta project. Nevertheless, whether its decision will truly reflect the will of the majority of the Bangladeshi populace, and not only a few factions, remains debatable, as it is an unelected government, despite some popular support. As Bangladesh charts new pathways in foreign policy, it must refrain from overt dependencies on any single power to avoid a debt-trap and retain its strategic autonomy, adherent to the dictum of “reaching out to everybody,” in principle and practice.

Sohini Bose is an Associate Fellow at the Observer Research Foundation.

Ayush Bhardwaj is a Research Intern at the Observer Research Foundation

• International Affairs
• India
• Bangladesh
• China
• Debt Trap Diplomacy
• India

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