Dr. Muhammad Yunus’s China Visit and the Recalibration of Bangladesh’s Foreign Policy

In the realm of diplomacy, where optics often rival outcomes, Professor Dr. Muhammad Yunus’s recent visit to the People’s Republic of China has ignited widespread interest and speculation among international policy analysts and geopolitical observers. This is no ordinary diplomatic overture. Rather, it marks a pivotal episode in South Asia’s evolving strategic landscape—a landscape increasingly defined by the shifting power equations among China, India, and the United States. As Dhaka moves to redefine its place on the regional chessboard, the nature and nuance of this visit demand a closer look.

While diplomacy is frequently likened to a game of chess, few moves are as layered and consequential as this one. Strategic foresight, maneuvering for positional advantage, and the wielding of influence behind closed doors all intersect in this critical engagement. The ambiguity surrounding the visit, magnified by cryptic statements from Chinese officials, only heightens its significance. Notably, China’s ambassador to Bangladesh, Yao Wen, added to the intrigue by suggesting that an “important announcement” might emerge at the culmination of the visit—only to follow up with a nebulous “work is still underway.” Such cryptic communication is characteristic of Beijing’s diplomatic posture and, paradoxically, invites more questions than answers. What, precisely, is under negotiation? What are the contours of this emerging partnership?

Foreign Affairs Advisor Towhid Hossain sought to temper expectations by confirming that no formal agreements would be signed during the visit, though several memoranda of understanding (MOUs) were on the agenda. Yet seasoned observers know that in international diplomacy, MOUs often serve as the scaffolding for deeper, long-term strategic cooperation. Far from being inconsequential, such documents can plant the seeds for future infrastructural, military, or economic integration.

The visit assumes even greater strategic weight considering it occurred just days after Dr. Yunus met with Indian Prime Minister Narendra Modi. This sequencing is more than coincidental—it is emblematic of Dhaka’s conscious effort to sustain a balanced approach to two of Asia’s most dominant powers. By maintaining diplomatic parity, Bangladesh continues its legacy of non-aligned engagement, attempting to extract maximal benefit while avoiding entanglement in overt power rivalries.

Dr. Yunus’s attendance at the Boao Forum for Asia—often dubbed “Asia’s Davos”—underlines the prestige and calculated intent of the visit. This gathering of elite political and business leaders, held in Hainan, is more than a networking hub; it is a projection of China’s soft power, a venue where Beijing subtly signals its preferred global partnerships.

Invited personally by Chinese President Xi Jinping, Dr. Yunus’s inclusion reflects Beijing’s growing interest in fortifying ties with Dhaka. China’s diplomatic choreography here is deliberate—Dr. Yunus’s interim government represents both a reset and a recalibration in Bangladeshi politics, and Beijing appears eager to build rapport with this new leadership at a formative stage.

Beijing’s courtship of Dhaka is not a recent development. Over the past decade, China has entrenched itself as Bangladesh’s largest supplier of military hardware and one of its foremost trading partners. Billions in Chinese capital have flowed into the country through infrastructure projects, particularly those aligned with the Belt and Road Initiative (BRI). From power plants and bridges to ports and railways, the imprint of Chinese ambition is unmistakable across the Bangladeshi landscape.

Yet China’s interest transcends economics. Strategically situated on the Bay of Bengal, Bangladesh holds immense value in China’s broader Indo-Pacific calculus. As India and the United States deepen their cooperation under the Indo-Pacific strategy—a counterweight to Chinese regional aspirations—Beijing is simultaneously expanding its influence through strategic partnerships across South Asia.

It is within this context that China’s proposed investment in the Teesta River project must be evaluated. The project, essential for Bangladesh’s water security and agriculture, could unlock vast benefits for Dhaka. However, it also sets off alarm bells in New Delhi, which has long viewed Chinese-funded infrastructure in its neighborhood with suspicion. India’s apprehensions stem from broader concerns over encirclement and strategic leverage. Should Bangladesh move forward with Chinese support on Teesta, it would likely recalibrate regional hydropolitics and invite heightened scrutiny from Indian strategists.

Trade and Investment: Beyond Duty-Free Dreams

Another key agenda item during the visit was the expansion of economic cooperation beyond existing frameworks. While China has offered duty-free access to 97 percent of Bangladeshi exports, the tangible benefits have remained modest. Most of these exports are garments—a sector in which China has limited import demand, given its own robust textile industry.

To address this imbalance, Bangladesh is keen to shift from a purely export-oriented relationship to one that encourages joint investment. Priority sectors include manufacturing, technology, and industrial modernization. Without significant progress in these domains, Bangladesh risks remaining trapped in a cycle of low-wage, labor-intensive production with limited value addition.

From Beijing’s perspective, Dhaka represents a crucial node in its supply chain diversification strategy. Proposals under consideration include special economic zones and industrial corridors—potentially mirroring the China-Pakistan Economic Corridor model. These could generate jobs and bring capital inflows but may also exacerbate fears of debt dependency and eroded economic sovereignty—concerns that Bangladeshi policymakers must navigate with caution.

While infrastructure and economics dominate the headlines, a humanitarian crisis continues to fester in the background. Since 2017, Bangladesh has shouldered the immense burden of sheltering over 1.2 million Rohingya refugees, with no durable solution on the horizon. International condemnation of Myanmar has achieved little, and the repatriation process remains stalled.

China’s role here is pivotal—and paradoxical. As Myanmar’s most powerful ally, China wields considerable influence over the military junta. Yet thus far, its interventions have remained largely symbolic. With the upcoming international conference on the Rohingya crisis scheduled for September in Dhaka, the time is ripe for Beijing to assume a more proactive role. Dhaka may push for China to leverage its strategic relationship with Naypyidaw and facilitate meaningful repatriation negotiations.

However, Beijing’s interests in Myanmar are primarily driven by economic and security imperatives—particularly stability. With significant investments in energy corridors and infrastructure projects in Myanmar, China is unlikely to apply pressure that could jeopardize its regional foothold. Nonetheless, Bangladesh is expected to press for a more “constructive and productive” engagement, even as realpolitik tempers expectations.

Dr. Yunus also signaled a forward-looking regional vision by expressing interest in deeper engagement with the Association of Southeast Asian Nations (ASEAN). Though ASEAN is currently not expanding its membership, Bangladesh’s longstanding participation in the ASEAN Regional Forum (ARF) since 2004 provides a platform for enhanced interaction.

The potential for closer ties with ASEAN is significant. Trade between China and ASEAN soared from $57 billion in 2001 to over $747 billion today. Bangladesh, with its strategic geography and growing economic base, could serve as a bridge between South and Southeast Asia. Notably, Dr. Yunus also reiterated the need to revive the South Asian Association for Regional Cooperation (SAARC), a regional bloc that has languished in recent years due to India-Pakistan tensions.

The broader strategic question surrounding Dr. Yunus’s visit is whether Bangladesh can continue its balancing act amid intensifying geopolitical competition. For decades, Dhaka has pursued a policy of equidistant diplomacy—fostering close relations with both China and India, while also engaging deeply with the United States and the European Union.

The optics of Dr. Yunus meeting both Xi Jinping and Narendra Modi within a matter of days underscore this strategy. Dhaka is signaling its intention to play both sides—deriving economic and strategic benefits from Beijing and Delhi alike, without alienating either.

However, this approach is becoming increasingly fraught. India views China’s deepening engagement in South Asia with skepticism, if not outright alarm. The United States, meanwhile, continues to fortify its Indo-Pacific strategy, seeking to counter Chinese influence through economic and security alliances. Washington’s recent outreach to Dhaka, including increased defense cooperation, is evidence of this trend.

Against this backdrop, Bangladesh’s challenge is to harvest tangible gains from all sides without becoming a pawn in larger geopolitical contests. This requires not only diplomatic dexterity but also a coherent vision for national development that transcends short-term alignments.

Far from being merely symbolic, the visit yielded substantial outcomes. China extended offers of investment and loans amounting to $2.1 billion, while 30 Chinese companies pledged an additional $1 billion in special economic zones. These commitments are poised to catalyze Bangladesh’s economic momentum—provided that implementation challenges can be overcome.

Of particular interest is China’s pledge to assist in the development of Mongla Port. While both India and China had previously shown interest in this infrastructure, the new agreement suggests that Beijing may now assume primary responsibility. If realized, this would represent a significant boost for connectivity and regional trade.

Equally noteworthy are China’s healthcare initiatives. With Bangladeshi citizens facing increasing difficulty in securing Indian medical visas since last year, China has stepped in by earmarking four hospitals in Kunming specifically for Bangladeshi patients. Plans are underway to launch direct flights between Chattogram and Kunming, thereby easing medical travel. Additionally, proposals for building hospitals in Dhaka and introducing advanced medical technologies—such as robotic physiotherapy and cardiovascular surgery—signal a new dimension in bilateral cooperation.

Water governance emerged as a key focal point during the bilateral talks. Dr. Yunus urged China to provide a 50-year master plan for managing Bangladesh’s extensive river networks—a bold move that underscores the urgency of integrated water resource management.

The Teesta River, which flows from China through India into Bangladesh, remains at the heart of this debate. China had previously conducted a survey on the river’s potential, but work was suspended following objections from India. With renewed diplomatic momentum, Dr. Yunus has requested the resumption of Chinese involvement, although no exclusive rights were granted—likely in deference to India’s sensitivities.

This delicate balancing act reflects Dhaka’s growing recognition of tripartite hydrodiplomacy. Given that both China and India hold upstream control over key transboundary rivers, a collaborative framework may be the only sustainable path forward. However, entrenched rivalries make such cooperation elusive.

Dr. Muhammad Yunus’s visit to China was anything but ceremonial. It was a deeply consequential diplomatic engagement that reaffirmed Bangladesh’s strategic relevance in an increasingly polarized global environment. As the world navigates a new era of great power competition, Dhaka’s capacity to extract benefit without provoking confrontation will be tested like never before.

The visit culminated in a joint statement reaffirming mutual respect for sovereignty and territorial integrity, along with Bangladesh’s continued support for the One China policy. In turn, China lauded the reform initiatives of the interim government and pledged continued cooperation. Yet, beyond the rhetoric, the real measure of this visit’s success will be seen in the months and years to come.

As Bangladesh marks the golden jubilee of its diplomatic ties with China, the need for strategic vision and pragmatic engagement has never been greater. Whether in infrastructure, health, trade, or geopolitics, the path forward demands skilled diplomacy, economic foresight, and a nuanced understanding of regional dynamics. The pieces are in motion. It is now up to Bangladesh to play the next move with wisdom and precision.