Bangladesh's interim leader, Muhammad Yunus, recently made his first bilateral state visit to China since taking office in 2024, amid ongoing diplomatic tensions with India.

During the visit, China expressed eagerness to collaborate with Bangladesh on various initiatives, including the digital economy, green economy, maritime economy, and infrastructure development as part of the Belt and Road Initiative.

As a result of Yunus's call for private investment, nearly 30 Chinese companies pledged $1 billion for the establishment of the Chinese Industrial Economic Zone.

In discussions, Chinese President Xi Jinping indicated a willingness to consider lowering interest rates on loans to Bangladesh.

Both nations emphasized the urgency of commencing negotiations for a China-Bangladesh Free Trade Agreement and optimizing their existing Investment Agreement.

China also plans to provide substantial financial support, including $400 million for the modernization of Mongla port, $350 million for the development of the economic zone, and $150 million in technical assistance.

President Xi reaffirmed China's commitment to increasing investments in Bangladesh and facilitating the relocation of Chinese manufacturing enterprises.

The visit culminated in the signing of one agreement on economic and technical cooperation, along with eight memorandums primarily focused on cultural exchanges.

Bangladesh reaffirmed its support for the One-China policy, recognizing Taiwan as part of China.

The strengthening of ties between Bangladesh and China, coupled with a decline in relations with India, could significantly alter the geopolitical dynamics in South Asia and raise security concerns for India.

Bangladesh's trade with China currently stands at $25 billion annually, but its exports to China are limited to just $1 billion despite offers of zero-tariff access for many Bangladeshi products.

Additionally, China and Bangladesh are exploring enhanced cooperation in water resource management, a significant issue raised during their talks.