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Published : 22 Jan 2025, 03:34 AM
Beijing has provisionally greenlighted Dhaka's request to extend loan repayment period for Bangladesh by 10 years to 30 years, pending a final deal, and promised to look into interest rate reduction.
Chinese Foreign Minister Wang Yi “agreed in principle" to the pleas during a bilateral meeting with Foreign Advisor Touhid Hossain in the Chinese capital on Tuesday.
Referring to the discussion in this regard, a statement issued by the foreign ministry said: “The foreign advisor requested China to reduce the interest rate from 2-3 percent to 1 percent, waive commitment fee, and extend loan repayment period from 20 years to 30 years for both the Preferential Buyer’s Credit loan and Government Concessional Loan.
“Praising Bangladesh’s good track record in loan repayment, Foreign Minister Wang Yi agreed in principle to extend the loan repayment period and assured Touhid to look into the request of the interest rate reduction.”
Bangladesh takes loans from China under the PBC and GCL agreements to implement development projects. The loan repayment period is 20 years with a 5-year grace period in both contracts. While the interest rate on GCL loans is 2 percent, it is 3 percent in PBC.
According to the Economic Relations Division, or ERD, Bangladesh's debt to China stood at over $5.57 billion, around 9 percent of total debt. As a lender, China was in fourth position.
According to another calculation by the ERD, Bangladesh has not received any loan commitments from China in the five months of the current 2024-25 fiscal year.
However, during this period, the country's debt has been waived by $135.2 million.
The Chinese foreign minister also assured his Bangladeshi counterpart to continue DFQF [duty-free quota-free] access of Bangladeshi products to the Chinese market for 3 years after the LDC graduation.
SUPPORT TO SOCIO-ECONOMIC DEVELOPMENT
Emphasising the exploration of a development path that suits the current circumstances of Bangladesh, Wang Yi said Beijing wants to continue supporting Bangladesh's economic and social development.
He said China supports Bangladesh in safeguarding its national independence, sovereignty, and national dignity, exploring a development path that suits its national conditions, respects the choice of the Bangladeshi people, and is willing to continue to provide assistance for Bangladesh's economic and social development.”
Foreign Advisor Touhid arrived in Beijing on Monday on his first bilateral visit since the formation of the interim government.
In addition to Wang Yi, he held meetings with Liu Jianchao, minister of the international department of the Chinese Communist Party, and Luo Zhaohui, director of the China International Development Cooperation Agency.
He will travel to Shanghai after completing meetings in Beijing to take part in a discussion at the Shanghai Institute for International Studies, or SIIS.
He is scheduled to visit three factories of electric cars, robotics, and agro-processing besides interacting with the leaders of the Shanghai Chamber.
Wang Yi says China has always placed Bangladesh in an important direction of its neighbouring diplomacy and pursued a policy of good neighbourliness and friendship for all Bangladeshi people.
“China is willing to work with Bangladesh to continue the traditional friendship, strengthen strategic communication, deepen pragmatic cooperation, jointly build the ‘Belt and Road’ with high quality, and promote the continuous development of the China-Bangladesh comprehensive strategic partnership,” he said.
