Korybko To The Financial Times: Hasina Had Closer Trade & Military Ties With China Than With India

Facts about her ties with China debunk the claim that she was an Indian puppet.

The Financial Times recently published a piece about how “India’s Bangladesh bet backfires after Sheikh Hasina ousted”, the innuendo of which is that Bangladesh’s deposed Prime Minister was practically an Indian puppet. The facts, however, tell an altogether different story. Although her government gave India transit rights for facilitating trade with its Northeast States, the strategic importance of which can’t be overstated, it also developed much closer trade and military ties with China than with India.

The Ministry of Planning’s Bureau of Statistics reported in May that last year’s imports from China were 22.77% of the total compared to India’s 13.06%. As for exports, India was in sixth place at 3.74% of the total, far behind the US’ first-place rank at 16.3%. The other top five markets are Germany, the UK, Spain, and France, which constituted 47.38% of Bangladesh’s total exports together with the US. China wasn’t in the top ten, but its exports and foreign direct investment (FDI) more than compensated for that.

India’s Observer Research Foundation reported in August 2023 that “Between 2016-22, Chinese state-owned and private companies invested nearly US$26 billion in Bangladesh. In 2022, Beijing emerged as the country’s largest FDI provider as its investments topped almost US$1 billion—a 30 percent increase from US$700 million in 2021. In both these years, Chinese investments also accounted for more than 65 percent of FDI registered by the Bangladesh Investment Development Authority (BIDA).”

On the military front, the Stockholm International Peace Research Institute’s report on “Trends In International Arms Transfers, 2023” showed that Bangladesh was China’s second-largest military export market from 2019-2023 at 11% of the total, which was far behind first-place Pakistan at 61%. Accordingly, China was the largest source of Bangladesh military imports during the same period at 72% of the total, far ahead of second-place Turkiye at 9.7%.

Moreover, Bangladesh received two submarines from China in 2016 and then solicited its partner’s help for building a new naval base, both developments of which raised eyebrows in India. From India’s perspective, Bangladesh’s participation in China’s Belt & Road Initiative could lead to the emergence of latent conventional security threats if China one day uses such ports as naval logistical outposts. This was balanced by Hasina cracking down on religious and separatist groups that India deems to be terrorists.

It’s that aforesaid security policy and the earlier mentioned policy regarding transit rights across Bangladeshi territory that resulted in Hasina being perceived by some as “pro-Indian” even though the preceding facts prove that she was much more pro-Chinese in terms of her trade and military policies. That doesn’t mean that she was a Chinese puppet, but it explains why China congratulated her for winning January’s elections that the opposition boycotted, and which were criticized by the US.

Unlike India, however, China doesn’t automatically stand to lose from Hasina’s ouster. The Bangladesh Nationalist Party (BNP), which many expect to play a key role in the next government after early elections, has traditionally been friendly with both the US and China while being adversarial towards India. Nevertheless, the indisputably pro-American interim government leader might be pressured by his patrons to “rebalance” Bangladesh’s security policy away from China and towards the US.  

That would take time to implement though since the armed forces are now used to operating Chinese equipment and can’t quickly transition to American wares even if Bangladesh purchased them at scale. At most, it might invite the US to set up the base that Hasina strongly implied in May that it had earlier requested as a quid pro quo for not stirring up trouble before and after the elections, but which she rejected. Readers can learn more about it from this piece here that was published at that time.

Given the enormous amount that Bangladesh imports from China, which makes that country its largest trade partner, it’s unrealistic to imagine the indisputably pro-American interim government distancing itself from the People’s Republic in that way. The same goes for the BNP. What those two can do, however, is politicize Hasina’s transit rights agreements with India in order to complicate their neighbor’s trade with its Northeast States and/or once again host groups that Delhi considers to be terrorists.

Either or both of those moves would suffice as indirect American punishment for India’s independent foreign policy, which would also align with China’s interests amidst their bitter border dispute. This observation isn’t to suggest that China and the US will coordinate their efforts to have the post-Hasina government become a thorn in India’s side, each for their own reasons, but just to point out that their interests converge in this respect since neither wants another Indian-friendly government there.

About that, as this analysis proved, Hasina’s friendliness to India was mostly due to her giving it transit rights for facilitating trade with its Northeast States and cracking down on groups that it designated as terrorists. The strategic importance of both can’t be overstated, but it’s a fact that she had closer trade and military ties with China than with India, the awareness of which debunks the Financial Times’ innuendo that she was practically an Indian puppet.

Objectively speaking, she pragmatically balanced between China, India, and the US, which the first two didn’t mind but the last disapproved of due to its zero-sum worldview. The US then set out to overthrow her as punishment for not subordinating Bangladesh’s interests to it, particularly after she refused to let it set up a military base, which also advanced its goal of indirectly punishing India. Thus, India’s interests are now threatened, the US’ are advanced, while China’s aren’t affected or might even be advanced.