Interest rates might be lowered
Photo: PID
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Photo: PID
Beijing has agreed in principle to extend the repayment period for Chinese loans and assured Dhaka it will look into the request to lower the interest rate to ease Bangladesh’s foreign debt repayment pressure.
China is Bangladesh’s fourth-largest lender after Japan, the World Bank and the Asian Development Bank, with total loans disbursed since 1975 coming to $7.5 billion.
For all latest news, follow The Daily Star’s Google News channel. The development came yesterday during Foreign Adviser Touhid Hossain’s bilateral meeting with Chinese Foreign Minister Wang Yi on his four-day tour of China at the Diaoyuitai State Guest House in Beijing.
At the meeting, Hossain requested lowering the interest rate on Chinese loans from 2-3 percent to 1 percent, waiving the commitment and management fees and extending the loan repayment period from 20 years to 30 years for both the preferential buyer’s credit and government concessional loans.
Praising Bangladesh’s good track record in repayment, Wang agreed to extend the maturity period for loans provided to the country and also assured of looking into the request of lowering the interest rate on the loans, according to a statement from the Bangladesh foreign ministry.
China places Bangladesh at a very important position in her neighbourhood diplomacy, the statement said quoting Wang as saying.
Also yesterday, Hossain held a meeting with Luo Zhaohui, the chairman of the China International Development Cooperation Agency, about Chinese loans.
Hossain requested Luo to ramp up concessional loans and grants and the number of projects China funds in Bangladesh. Luo responded positively and sought a list of priority projects from Bangladesh.
Luo said China may consider larger projects in Bangladesh, with some project funds extended as grants. As a result, the average interest rate of Chinese loans will go down, he said.
Both sides also discussed the financing of projects in metro rail and the Southern Infrastructure Development Initiative (SIDI) in Bangladesh.
Over at Hossain’s bilateral meeting with the Chinese foreign minister, Beijing assured of continued duty-free and quota-free access to Bangladeshi products for three years after graduation from the least-developed country bracket in 2026.
Wang also conveyed China’s decision to designate three to four recognised hospitals in Kunming for treatment of Bangladeshi patients.
He also welcomed Bangladesh’s proposal of setting up 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.
Both sides conveyed their readiness to organise a host of activities to mark the occasion.
Wang requested Bangladesh to consider joining Chinese President Xi Jinping’s three global initiatives: the Global Development Initiative, the Global Security Initiative and the Global Civilisation Initiative.
In response, Bangladesh conveyed their intention to examine the proposals and to remain engaged with China in deliberations on the issues.
Wang 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.
Recognising Bangladesh’s strategic position, the two sides emphasised continued cooperation under the Belt and Road Initiative.
China wants to see Bangladesh’s economic development in pace with their own development and assured China’s continued support for the projects conducive to the livelihood of the people of Bangladesh, Wang said.
The two sides expressed their willingness to work closely on proposed Chinese-funded projects: the Dasherkandi sewage treatment plant, the upgradation and modernisation of Mongla Port and the establishment of digital connectivity and 4G expansion.
The Chinese side was very positive about the request for lowering the interest rate and financial support, an official of the foreign adviser’s delegation told the correspondent from Beijing.
“They have not insisted on their issues of GDI and GSI, but said they want us to be with them for inclusive development,” he said.
Bangladesh sought detailed information on China’s plan to build a mega-hydropower dam across the Yarlung Tsangpo River in Tibet.
The Chinese side said they would not consume or withdraw any water and thus the lower riparian countries will not be affected, the official said, adding that there was no discussion on the Teesta river management project.
Both leaders discussed the Rohingya crisis and reaffirmed their shared commitment to work on a roadmap to finding a durable solution to the issue, according to the foreign ministry statement. Wang reassured China’s continued engagement with Myanmar to address the situation and promote regional stability.
Hossain reiterated Bangladesh’s firm commitment to the ‘One China Principle’ and unwavering support for UNGA Resolution 2758.
The two countries signed the implementation plan for the memorandum of understanding on the exchange of hydrological information on the Yaluzangbu-Jamuna rivers.
Hossain also met with Liu Jianchao, the minister of the international department of the Chinese Communist Party, yesterday to discuss Chinese-funded development projects in Bangladesh.
Liu reaffirmed China’s continued support for the interim government and peaceful transition to democracy through a free, fair and participatory election.
