Simon Mohsin-
Reports inform IMF First Managing Deputy Director Gita Gopinath told the 20th World Congress of the International Economic Association that around 3,000 trade restrictions were imposed last year – nearly three times the number imposed in 2019. Trade protectionism and decoupling moves taken by some countries over so-called security concerns will only bring less security and more risks to the world, Chinese Foreign Ministry spokesperson Mao Ning said in response to an IMF warning on economic fragmentation caused by rising trade protectionism. Mao said that trade protectionism distorts the free flow of goods, services, and capital, harms consumer interests, hinders the improvement of production efficiency, and impedes the recovery and development of the global economy.
The “United States Strategic Framework for the Indo-Pacific” is focused on ensuring continued dominance over China, which focuses on accelerating India’s rise as a counterweight to Beijing and the ability to defend Taiwan against an attack. The document further elaborates that India’s preferred partner on security issues is the US and the two cooperate to preserve maritime security and counter Chinese influence in South and Southeast Asia and other regions of mutual concern. The US priority is to accelerate India’s rise and capacity to serve as a net provider of security and a Major Defense Partner; and solidify an enduring strategic partnership with India underpinned by a strong Indian military. And most importantly, strengthens the capacity of emerging partners in South Asia, including the Maldives, Bangladesh, and Sri Lanka, to contribute to a free and open order.
At the recent US-China Business Council’s 50th Anniversary Dinner in Washington, the US Treasury Secretary emphasized that the US aims to establish “durable communication channels” with China rather than seek to decouple from China. This is in stark contrast to recent developments in Congress as US House of Representatives members proposed four measures to ensure the full implementation of the policy of “decoupling” from China. This comes shortly after the House Select Committee on the Strategic Competition Between the US and the Chinese Communist Party called for resetting economic ties between the US and China. It indicates that Washington’s policy direction of “decoupling” from China remains unchanged. However, the policy is now moving towards a more de-risking approach than decoupling, as is seen also in the European policy. Washington and Europe’s major capitals are taking a more critical view of China, and concern about the implications of Chinese investment is on the rise. Germany, France, and the UK are all worried about increasing Chinese influence. Their approaches are all different, and they may be unable to reconcile them as in the US case.
Given the scenarios mentioned above, it is difficult to understand, even imagine what decoupling with China means. Bangladesh has been grappling with this concept of reducing Chinese influence, preferably decoupling from China mainly concerns stemming from close-door neighbor India, and biggest investor the US. Now, de-risking seems a more comprehensible notion. De-risking from China refers to screening and even curbing investments in and out of China, as well as subsidies for rebuilding domestic industries, to reduce Chinese dominance of vital supply chains. It can also describe the use of national security tools. The EU’s policy towards China has shifted towards de-risking from China, with a focus on diversifying the EU’s supply chains in strategically important areas such as raw materials.
So, the real question is, what does it mean for Bangladesh? Or more importantly, should this question and the aforementioned constant pressure should mean anything for Bangladesh? The response to this question is manifold but the bottom-line is not even close to what the US and/or India, nor the EU expect. This is more understandable with the findings of a recent survey on China in Bangladesh.
The survey, “National Image of China in Bangladesh”, released days ago, found the overall image of China in Bangladesh positive and consistent, with its performance in domestic and foreign affairs better appreciated. China is viewed as a friendly nation that plays a significant role in fostering Bangladesh to achieve its target of a developed and “Smart Nation” by 2041, according to a leading local think-tank survey. The Center for Alternatives conducted the survey and found that China’s positive image in Bangladesh results from its people’s efficiency and kindness, the non-interference of foreign policy, and commitment to joint development through the Belt and Road Initiative (BRI). The survey respondents see China as a leading development partner and a friendly nation, emphasizing the need for increased Chinese investment and development assistance as an instrument of peace and a primary driving force for Bangladesh’s economy. The survey respondents believe China is a highly advanced nation with a strong economy, cutting-edge science and technology, and robust political ethics. Most respondents see China as a good place for travel, study, and business with its beautiful cities, good administration, and fresh food.
The merits and benefits of BRI for Bangladesh are many. The cost-effectiveness of trade with China is a key tenet for business and trade feasibility that other countries are unable to offer Bangladesh. The Chinese investments have generated more than 550,000 jobs, while infrastructure development in Bangladesh is accelerating with Chinese support. The concerns of the Chinese debt trap have been debunked more than once, and quite effectively. From road to rail to seaport and airport, under-river tunnel to elevated expressway, water utility to e-governance, military, coal to solar energy, China makes its presence felt everywhere in Bangladesh with funds, technology, and expertise. In the last 10 years, China has released $4.45 billion for 35 projects under the Belt and Road Initiative (BRI), informs the Chinese Ambassador. Under the BRI, Bangladesh is to receive $26 billion and $14 billion for joint venture projects, totaling a $40 billion package. Bangladesh has primarily seen BRI projects in the energy and transportation sectors, with infrastructure investment needs projected to reach 1.5% of GDP by 2040.
the current world and the evolved globalization underscore a different reality as the media sensationalizing machinery would have one perceive. Ideas such as de-coupling, aligning with one power over the other, and more are real, but their manifestation is less vivid and concerning than the media would have it. The India-China trade relations, the way the US and other countries’ industries still depend on Chinese manufacturing, does not signify the dichotomous assessment that media, propagandists, and alarmists would have one believe. The mere fact is that globalization has evolved from an interconnected information nexus, and marketplace to an interdependent production network. Each product is now made not only in place, or all its materials sourced from one place, but rather a conglomeration of production mechanisms, and material sourcing from across multiple nations is a norm now. This situation creates an interdependence among competing states and does not allow them to completely de-couple and disengage from each other. This simple realization does not allow any country to look at things in the form of “either with us or against us.” It was tried once in the early 2000s, and it failed miserably, as it did during the Cold War. Thus, the concept of decoupling is not a reality, but rather a myth between Bangladesh and China. The US and EU have realized the same for themselves. It is imperative that Bangladesh also make it explicitly clear to them and continue to do so in the coming months.
The US is unable to decouple, the EU is following suit, and the trade sanctions as mentioned by the IMF and the Chinese FM above are not feasible for Bangladesh and its economy, and it is likely to become an improbability in the coming years, as Chinese investments and engagements enhance in Bangladesh. Thus, for Bangladesh, the de-risking as the West would like to define is unpragmatic. The only key priority for Bangladesh is to ensure that it maintains its core foreign policy of friendship to all, and does not allow any diplomatic tagging by one or the other to dictate Dhaka’s foreign policy in one way or the other.
Simon Mohsin is a Political and International Affairs Analyst
