Bangladesh plans to request $20 billion in new loans during Prime Minister Sheikh Hasina's July 8-10 visit to China, a move Beijing believes could significantly enhance their bilateral relationship.

The proposed loans include $15 billion for infrastructure development and $5 billion in yuan to streamline payments for imports from China, multiple sources from the prime minister's office told Anadolu Agnecy of  Türkiye. Just two weeks after her first state visit to India following her fourth consecutive term as Hasina's upcoming trip to China, Bangladesh's largest trading partner, is seen as a strategic balancing maneuver.

Prime Minister Sheikh Hasina of Bangladesh is set to embark on an important three-day state visit to China from July 8 to 10 at the invitation of Premier Li Qiang. This visit, anticipated to be a significant milestone, aims to enhance the bilateral relationship between the two nations, which have enjoyed a long-standing friendship and strategic partnership. Beijing views this trip as a potential ‘game changer’ that could elevate cooperation and collaboration to unprecedented levels, according to an article published in eurasiantimes.com.

“During President Xi Jinping’s 2016 visit to Bangladesh, he expressed China’s desire to upgrade its relationship with Bangladesh from a ‘strategic partnership’ to a “comprehensive strategic cooperation partnership,” writes Salah Uddin Shoaib Choudhury

A Memorandum of Understanding (MoU) was signed in the presence of President Xi and Prime Minister Hasina regarding Bangladesh’s participation in the Belt and Road Initiative (BRI). Additionally, decisions were made about China’s debt and financing several mega projects in Bangladesh.

Over the past eight years, China’s role as a key development partner has grown, with current bilateral trade between the two countries standing at US$23 billion.

Bangladesh will seek additional loans amounting to US$20 billion during this visit, according to the Ministry of Foreign Affairs. US$15 billion will be allocated for infrastructural development projects, and the remaining US$5 billion will be disbursed in Chinese yuan to facilitate payments for imports from China.

In light of global economic shifts, Bangladesh is also expressing a willingness to switch to alternative currencies instead of relying solely on US dollars.

The Ukraine war and Western sanctions have posed several obstacles for dollar-based economies and transaction systems, causing significant challenges for countries like Bangladesh.

By exploring transactions in Chinese yuan and other currencies, Bangladesh aims to mitigate these economic hurdles and enhance its financial stability and independence.

The Embassy of the People’s Republic of China in Bangladesh stated in a social media post that Foreign Ministry Spokesperson Mao Ning announced Prime Minister Sheikh Hasina’s visit from July 8 to 10.

Following this announcement, Hubei Media Group inquired about the program and China’s expectations for the visit, as well as the current state of China-Bangladesh relations.

Mao Ning responded: “This will be Prime Minister Sheikh Hasina’s first visit to China since her new term began and five years after her last visit to China. During the visit, President Xi Jinping will meet with Prime Minister Sheikh Hasina. Premier Li Qiang will hold a welcoming ceremony and have talks with her.

The two prime ministers will attend the signing ceremony of cooperation documents. Leaders of the two countries will have an in-depth exchange of views on how to deepen traditional friendship, expand mutually beneficial cooperation, and discuss regional and international issues of mutual interest.

Prime Minister Hasina will also attend the Summit on Trade, Business, and Investment Opportunities between China and Bangladesh.

Bangladesh’s Ministry of Foreign Affairs stated that Dhaka will seek support from Beijing for the Southern Integrated Development Initiative (SIDI), which centers on the Payra Port in the southern district of Patuakhali. This project will be an integrated development plan for the southern region of the country, involving projects on transport and communication, ICT, power and energy, logistics, and a special economic zone.

The Finance Ministry added that SIDI will see the establishment of an electric vehicle plant, a hi-tech park, and a logistics hub at a strategic location. In addition, Bangladesh will also seek loans from China for the implementation of the Dhaka Mass Rapid Transit Development Project (Line 2), the Bhanga-Kuakata rail line, a bridge over the Kocha river at Pirojpur, the renovation of Dhaka Medical College Hospital, and the Maheshkhali-Matarbari and Bakhrabad 3rd parallel gas transmission pipeline.