Overall, China released US$1.13 billion as line of credit for Bangladesh in FY 2022-23.
After talking to ERD officials, it was found that China gives loans to Bangladesh in both dollars and yuan. However, loan repayment in yuan is relatively low as Bangladesh is more interested in taking loans in dollars.
Speaking to Prothom Alo, Policy Research Institute (PRI) executive director Ahsan H Mansour said China wants to strengthen its currency. He said, “Credit agreements have been signed with China, so why should there be any delay in releasing funds for the ongoing projects? According to the contract, there are legal obligations to release the funds. China has no shortage of money. Does China think that we will not be able to pay the money? That would be ‘mysterious’. He said Chinese contractors worked on Chinese projects. Bills to Chinese contractors can be paid in yuan. But it would not be right to delay the release of funds.
There are currently 14 projects funded by China running. These include projects of elevated expressways, railways, roads and more. The Chinese loan for these projects is approximately US$10 billion (US$10 billion). ERD sources say China has released less funds for monarchical WASA and government vessel procurement projects. This was due to slow pace in project implementation.
China is now one of Bangladesh’s top creditors. It ranks fourth among the 32 countries and institutions that provide loans to Bangladesh. Only Japan, the World Bank and the Asian Development Bank (ADB) are above China in this regard.