Bangladesh-China at 51: From Friendship to Economic Opportunity

Bangladesh and China formally opened a diplomatic relationship in a conference room New York city on 4 October 1975.  Very few people could have imagined this only three years earlier. Dhaka was closely aligned with Moscow and Beijing remained firmly supportive of Islamabad. Yet, history moved quickly. China recognised Bangladesh on 31 August 1975, and on 4 October, the two countries embarked on a diplomatic journey together. It was not, at the beginning, a friendship built on sentiment. Rather, it was diplomacy responding to a changing geopolitical reality. Fifty-one years later, today, that relationship has turned into one of Bangladesh’s most consequential partnerships. The question which is now more relevant for Bangladesh to consider is not whether it should deepen its engagement with China, but how it needs to utilise that engagement to build up its own capacity.
The timing of that opening proved remarkably consequential. Within a few years, Deng Xiaoping’s reforms began transforming China’s economy. Over the following decades, China became a global manufacturing powerhouse, while Bangladesh emerged as a major manufacturing and export economy of its own. Chinese machinery, raw materials, technology, infrastructure finance, and investment increasingly became part of Bangladesh’s development story. 
The relationship gradually moved beyond diplomacy into almost every major sector of the Bangladeshi economy. China has remained Bangladesh’s largest trading partner for 16 consecutive years, while various Chinese companies and financing became deeply involved in roads, bridges, railways, power generation, ports and telecommunications. Meanwhile, Bangladesh’s decision to join the Belt and Road Initiative in 2016 gave the relationship another institutional framework.
The numbers tell only part of the story. China has supported major infrastructure projects in Bangladesh, while Chinese companies have become important suppliers of machinery, industrial inputs and technology. Huawei, for example, has been involved in Bangladesh’s telecommunications development for decades. Chinese-funded and Chinese-built infrastructure has altered the country’s physical connectivity. Universities and Confucius Institutes have expanded educational and cultural exchanges, while thousands of Bangladeshi students have studied in China.
The relationship has also acquired strategic dimensions, including defence cooperation. But that is precisely why Dhaka should approach the next 50 years with a more ambitious economic strategy. The objective should not simply be to import more from China or secure more project financing. It should be to use the relationship to build Bangladesh’s own productive capacity and turn strategic ties into economic leverage. That distinction matters.
Bangladesh’s trade relationship with China remains heavily unbalanced. China is a massive source of machinery, intermediate goods, electronics, chemicals, textiles and other industrial inputs, while Bangladesh’s exports to China remain comparatively small. The answer is not to retreat from China. It is to make better use of access to the Chinese market and Chinese investment.

There is now an important opening. China has extended zero-tariff treatment to 100 per cent of tariff lines for Bangladeshi exports. At the same time, the two sides have also committed to strengthening trade, e-commerce, investment and industrial supply-chain cooperation. For a Bangladesh approaching or moving beyond its least-developed-country graduation, such access is not merely a diplomatic gesture. It is a commercial opportunity that demands a serious export strategy and policy follow-through.
Bangladesh should therefore stop thinking of China primarily as a market from which it buys; rather it should treat it as a production ecosystem into which it can plug, using investment to expand capacity and exports. That is the central opportunity: to turn access into productive capacity.
This is where the China Economic and Industrial Zone at Anwara in Chattogram becomes important. Construction formally began in July, with the zone expected to attract about $1.3 billion in investment and generate more than 100,000 jobs. Its location near Chattogram Port, the Karnaphuli Tunnel and the developing Matarbari port infrastructure gives it the potential to become more than another industrial estate. It could become a platform for Chinese manufacturers seeking competitive production locations outside China, while also creating space for Bangladeshi suppliers, workers, and logistics firms to gain.
But potential is not performance. Vietnam offers an instructive comparison. As global manufacturers pursued a “China plus one” strategy, Vietnam invested heavily in industrial infrastructure, trade agreements, logistics, and an investor-friendly business environment. In 2024 alone, Vietnam attracted $38.23 billion in registered foreign investment, with manufacturing and processing accounting for nearly two-thirds of the total. The point is not that investment appears automatically; it follows a clear policy environment.
Bangladesh cannot simply copy Vietnam. Its institutions, geography, labour market and economic structure are different. But the lesson is clear: investment does not arrive merely because a country has a large population or a strategic location. Governments must make investment easier, faster and more predictable so that capital can support productive capacity.
Bangladesh possesses several advantages that should not be underestimated: a large labour force, a globally competitive garment industry, proximity to major Asian markets, access to the Bay of Bengal and growing industrial capabilities. What it lacks is not opportunity but sufficient connectivity, regulatory efficiency, skills, and export diversification.
This is where the proposed China-Myanmar-Bangladesh Economic Corridor could become significant. During Prime Minister Tarique Rahman’s June 2026 visit to China, Beijing expressed support for advancing cooperation on the corridor. The broader idea is strategically attractive: connect China’s Yunnan province with Bangladesh through Myanmar and create stronger road, rail, port, energy and industrial links across the region. For Bangladesh, the payoff would depend on whether the corridor lowers costs, speeds trade, and expands industrial activity.
For Bangladesh, however, the value of such a corridor should not be measured simply by kilometres of railway or billions of dollars in construction contracts. Its real value would lie in what moves through it.
Factories must move closer to ports. Ports must connect efficiently with industrial zones. Railways must carry containers rather than merely passengers. Customs procedures must become faster. Warehouses, logistics parks and digital trade platforms must develop alongside physical infrastructure. And Bangladeshi firms must become suppliers to the production networks that Chinese, Japanese, Korean and other multinational companies are building across Asia, so that infrastructure translates into production and exports.
Cox’s Bazar and the wider southeastern coast could eventually become central to this transformation. Matarbari is expanding Bangladesh’s maritime ambitions, while the broader Chattogram–Matarbari corridor is becoming increasingly important for industry and logistics. If connectivity with Myanmar and eventually Yunnan improves, Bangladesh could position its southeastern coastline as a gateway between South and Southeast Asia.
But geography alone will not make Bangladesh a regional hub. Infrastructure must match with policy. Dhaka should negotiate with Beijing not merely for loans and construction contracts, but for technology transfer, local supplier development, vocational training, research partnerships and export-oriented investment. Chinese companies setting up factories in Bangladesh should be encouraged to source more components locally. Bangladeshi engineers and technicians should be trained for higher-value manufacturing. Universities should build joint programmes in engineering, logistics, artificial intelligence, digital commerce and industrial management, so that policy gains turn into stronger domestic capacity.
At the same time, Bangladesh should maintain diversified international economic relationships. Deepening ties with China should complement, not replace, partnerships with India, Japan, the United States, Europe, ASEAN and the Gulf economies. A strategically located Bangladesh gains more when it connects different economic systems than when it becomes dependent on any single one.
That is the real meaning of 51 years of Bangladesh-China relations. The relationship began when two governments looked at a rapidly changing geopolitical map and decided that yesterday’s differences could not dictate tomorrow’s possibilities. Bangladesh now faces another turning point. Global supply chains are being reorganised. Manufacturers are searching for new production locations. Regional connectivity is being redrawn. China is looking outward for new markets, production partnerships and trade routes. Bangladesh sits directly in the path of many of these changes.
The opportunity, therefore, is larger than another bridge, another power plant or another loan. It is a call to act with purpose: build export capacity, strengthen logistics, improve skills and turn cooperation into long-term competitiveness. It is an opportunity to use investment to strengthen Bangladesh’s productive base and exports. It is the chance to convert policy choices into productivity, trade expansion and industrial upgrading. It is to use China engagement to build Bangladesh’s own productive capacity.
Fifty-one years ago, Bangladesh and China opened a diplomatic door because circumstances had changed. Today, the circumstances are changing again. The next chapter should be about turning proximity into production, trade into exports, infrastructure into industry and friendship into shared economic opportunity. The train is already moving. Bangladesh does not need to chase it from behind; it needs to build the tracks, prepare the stations, and make sure its own businesses, workers, and exporters are on board when it passes, so the relationship delivers measurable economic gains.

Md Saikat Hosen is a PhD candidate in the School of International Economics and Politics at Jiangxi University of Finance and Economics in China.

Mohammad Saiyedul Islam, PhD, is a Senior Lecturer and Researcher in the School of Overseas Education (School of Foreign Languages) at Sanming University in Fujian Province, China