Clueless elephant, hidden dragon

Posted in China, economics, foreign policy, India, macro, trade by jrahman on September 14, 2011

Despite the two countries’ shared history and geography, India is not even among Bangladesh’s top-ten foreign investors. India may have close political ties with its eastern neighbour. But China wins the economic competition in Bangladesh hands down. China is Bangladesh’s biggest trading partner, as well as its primary supplier of military equipment. And it seems that not a month goes by without Chinese companies winning contracts to build power stations, roads, telecoms and other infrastructure in Bangladesh.

That’s from Tom Joehnk’s piece in the lead up to Dr Singh’s Dhaka trip.  Let’s see if we can unpack that a bit more.

In 2003, Bangladesh’s imports from China and India were roughly equal.  By 2010, the Chinese figure was more than double that of India.

Source: CEIC Asia.

According to the Board of Investment, Chinese foreign direct investment into Bangladesh in 2009-10 comprised of 12 projects worth $21b.   Indian investment was worth $8.5 billion, comprising nine projects.

Of the 77 combat aircrafts of the Bangladesh Air Force, 54 are Chinese made.   All of Bangladesh army’s over 475 tanks are Chinese made.  None of the country’s military hardware comes from India.

Last year, Sheikh Hasina’s India trip lasted barely two days.  She spent five days in China, achieving as much if not more in Beijing than in New Delhi.  And there is bi-partisan continuity in the Sino-Bangla relationship.  Governments of all types have formally committed to Chittagong-Kunming connectivity, for example.

And yet, the Sino-Bangla relationship garners no headlines.  Whereas Indian envoys make headlines,the Chinese ones quietly apply pressure to cancel shows on Tibet.  Neither Mahmudur Rahman nor Shahrier Kabir will write about the Uighurs.

Prime Minister’s garrulous advisors like to say that Bangladesh has lost 40 years when it comes to India.  They are clueless.  As is India.  Because it’s India that has lost 40 years when it comes to Bangladesh. 

And the failed summit last week makes it clear that this is not about to change.

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4 Responses

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  1. tacit said, on September 14, 2011 at 8:09 pm

    The Board of Investment link seems to be inoperative.

    • jrahman said, on September 15, 2011 at 7:43 am

      BoI site seems to be down.

  2. Diganta said, on September 18, 2011 at 8:49 pm

    Power of India and China are not in the same area and they won’t be so in near future. Indian growth engine is services and this data does not cover those. So, the merchandised trade between India and Bangladesh is supposed to have a lower growth effect. However, garnering headlines is different. The long cultural relationships (both and good) are major reasons behind it. Again, this should not change in years to come.

  3. ঢাকাশহর said, on September 19, 2011 at 4:44 am

    “Prime Minister’s garrulous advisors like to say that Bangladesh has lost 40 years when it comes to India. They are clueless. As is India. Because it’s India that has lost 40 years when it comes to Bangladesh. ”

    Well said. Of course, I understand your hesitation in characterising these advisors as “crouching tigers” with its sexual connotations ….

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