China tops India's $2 bn for Bangladesh with $24 bn loan

The Chinese President is visiting Bangladesh on his way to a BRICS summit in Goa, India. Photograph:( Getty )

Dhaka, Bangladesh Oct 14, 2016, 07.52 AM (IST)

China will sign off on loans adding up to over $24 billion to Bangladesh during Chinese President Xi Jinping's visit to the country, the first by a Chinese head of state to the country in 30 years, Reuters reported Friday.

The loans are Dhaka's biggest line of credit to date and will be used to help strengthen Bangladesh's infrastructure.

Indian Prime Minister Narendra Modi had in May last year offered Bangladesh a $2 billion line of credit. 

The Chinese President is visiting Bangladesh on his way to the BRICS summit beginning October 16 in Goa, India. 

The money will be used to invest in 25 infrastructure projects, including a 1,320 MW power plant. The funds will also be used to develop highways and information technology, and build a deep sea port, Bangladesh junior finance minister MA Mannan told Reuters. 

"Our infrastructure needs are big, so we need huge loans,” Mannan said. 

Zero sum game

The move has led to speculation of a zero-sum being played out between India and China over Bangladesh.  

According to Zhao Gancheng, director of South Asia Studies at the Shanghai Institute for International Studies, however, “Bangladesh welcomes both Chinese and Indian investment”, Reuters reported.  

Bangladesh has also expressed support for "China's One belt, One Road” initiative, which aims to enhance connectivity and increase trade among countries between China and the rest of Eurasia, which India sees as a power-seeking move. 

(WION with inputs from Reuters)