Beijing extends loan repayment period, considers Dhaka's request for interest rate cut

Praising Bangladesh’s good track record in loan repayment, China has "agreed in principle" to extend the loan repayment period and assured to look into the request for the interest rate reduction.

Bangladesh Foreign Adviser Md Touhid Hossain, during his meeting with his Chinese counterpart Wang Yi in Beijing on Tuesday, requested China to reduce the interest rate from 2-3% to 1%, waive the commitment fee and extend the loan repayment period from 20 years to 30 years for both the Preferential Buyer’s Credit (PBC) loan and Government Concessional Loan (GCL).

The Chinese foreign minister also assured to continue DFQF access of Bangladeshi products to the Chinese market for three years after the LDC graduation.

Meanwhile, Bangladesh and China signed the “Implementation Plan" of the MoU in exchange of "Hydrological Information" sharing of the Yaluzangbu-Jamuna River.

Wang Yi said China places Bangladesh in a very important position in her neighbourhood diplomacy and praised the existing warm relations between the two nations.

Bangladesh and China reaffirmed their commitment to “Comprehensive Strategic Cooperative Partnership” during bilateral talks held at the Diaoyuitai state guesthouse in Beijing.

The foreign minister said the people of Bangladesh have given an important responsibility to Prof Muhammad Yunus who has dedicated himself to maintaining civility and unity in the country, and his government has done many tangible good things for Bangladesh.

He recalled his fruitful meeting with Prof Yunus on the sidelines of the last UNGA.

Wang Yi reaffirmed that China respects the sovereignty and territorial integrity of Bangladesh and reiterated continued Chinese support for the stability, reforms, democratic transition and development initiatives of Bangladesh.

He also mentioned that China wants to see Bangladesh’s economic development in pace with their own development. “China would continue supporting projects conducive to the livelihood of the people of Bangladesh,” the foreign minister stated.

Adviser Touhid Hossain is paying an official visit to China at the invitation of the Chinese foreign minister.

Senior officials from the ministries of commerce, water resources and the Economic Relations Division are accompanying the foreign adviser.

This is his first bilateral visit abroad after assuming charge. This visit also coincides with the celebration of the golden jubilee of diplomatic relations between the two friendly nations.

Touhid was warmly welcomed by Foreign Minister Wang Yi before the bilateral talks.

The talks were held in a very cordial atmosphere covering a wide range of topics, including development cooperation, trade and investment, infrastructure development, sectoral cooperation, and people to people exchanges.

Both sides expressed their commitment to deepen collaboration in areas of mutual interest and leveraging opportunities for shared prosperity.

The adviser emphasised that his first bilateral visit to China reflects Bangladesh’s strong intent to engage with China in a robust partnership to give the relationship new momentum.

He reiterated Bangladesh’s firm commitment to “One China Principle” and unwavering support for UNGA Resolution 2758.

He mentioned that the July-August 2024 movement in Bangladesh gave an opportunity to rebuild the nation on the principles of equality, non-discrimination, corruption-free system, and equal access to resources for all.

Upon Bangladesh’s request, Foreign Minister Wang Yi conveyed China’s decision to especially designate 3-4 recognised hospitals in Kunming for treatment of Bangladeshi patients.

He also welcomed Bangladesh’s proposal of establishing a specialised tertiary-level Chinese hospital in Dhaka as a gesture of goodwill on the occasion of the 50th anniversary of Bangladesh-China diplomatic relations.

The Chinese foreign minister also gave positive responses to consider Bangladesh’s requests for financial, technical and capacity building cooperation and support in sectors such as education, railway, agriculture, water resource management, livestock, fisheries, shipbreaking, sustainable and renewable energy, and blue economy.

During the meeting, both sides conveyed their readiness to organise a host of activities to celebrate the 50th anniversary of the diplomatic relations between Bangladesh and China in a grand manner.

Recognising Bangladesh’s strategic position, two sides emphasised continued cooperation under the Belt and Road Initiative (BRI).

They expressed their willingness to work closely on proposed Chinese-funded projects namely Dasherkandi Sewage Treatment Plant, Upgradation and Modernisation of Mongla Port, Establishing Digital Connectivity and 4G Expansion.

Both leaders discussed the Rohingya crisis and reaffirmed their shared commitment to work on a roadmap to finding a durable solution to the issue. Wang Yi reassured China’s continued engagement with Myanmar to address the situation and promote regional stability.

He also requested Bangladesh to consider joining President Xi Jinping’s three global initiatives namely GDI, GSI, and GCI.

In response, Bangladesh conveyed their intention to examine the proposals and to remain engaged with China in deliberations on the issues.

They also agreed to collaborate on each other’s candidature in multilateral fora including in the United Nations.

Adviser Touhid also had a meeting with the Minister of International Department of the Chinese Communist Party.

During the meeting, they discussed Chinese-funded development projects in Bangladesh. They also talked about the reform initiatives of the interim government in Bangladesh.

The Chinese minister reaffirmed China’s continued support for the interim government and peaceful transition to democracy through a free, fair and participatory election.

Touhid also held a meeting with the chairman of China International Development Cooperation Agency (CIDCA) this afternoon. They had an elaborate discussion on the China-funded projects in Bangladesh.

The adviser requested the CIDCA chairman to consider reducing the interest rate of GCL and PBC loan from 2-3% to 1% and to extend the maturity period from 20 years to 30 years.

He also requested to waive the commitment fee and management fee for Chinese loans to Bangladesh.

The CIDCA chairman mentioned that they have already extended the maturity period and they will consider further reduction of interest rate.

The foreign affairs adviser requested the CIDCA chairman to increase the amount of concessional loans and grants, and number of projects.

The CIDCA chairman responded positively and requested Bangladesh to provide a list of priority projects.

Both sides also discussed financing of projects in metro rail and Southern Infrastructure Development Initiative (SIDI) in Bangladesh.

The CIDCA chairman noted that China may consider larger projects in Bangladesh in future some portion of which will be given as grants. As a result, this will reduce the average loan interest rate.

Adviser Touhid extended an invitation to Foreign Minister Wang Yi to visit Bangladesh at a mutually convenient time. The foreign minister hosted a lunch in honour of the foreign adviser and his delegation.

Touhid arrived in Beijing yesterday at midnight. He was received by Bangladesh Ambassador to China Md Nazmul Islam and high-level officials from the Chinese foreign ministry.