Bangladesh Cuts Cost of China-Funded BRI Railway Projects; Beijing Withdraws Funding

By Alex Wu
Alex Wu
Alex Wu
Alex Wu is a U.S.-based writer for The Epoch Times focusing on Chinese society, Chinese culture, human rights, and international relations.
June 29, 2021 Updated: June 30, 2021

China has withdrawn its BRI (Belt and Road Initiative) funding for railway projects in Bangladesh, after the recipient country proposed significant cuts in costs. This happened amidst increasing tension between the two countries.

According to media reports, the government of Prime Minister Sheikh Hasina found that Chinese companies were charging three times the normal price for construction, and slashed $5.72 billion from the China-funded Akhaura-Sylhet and Joydebpur-Ishwardi railway projects that are part of the BRI agreement signed between the two countries.

The main conditions of the contract with China required that the contractors of the railway construction be selected by the Chinese government, and the government of Bangladesh pay for land acquisition, resettlement of locals, and worker wages. The Chinese government pays construction costs, which account for about 80 percent to 85 percent of the total cost of the projects.

Chinese companies were selected for the projects, but after the Bangladesh government cut the project contract price, China decided to withdraw funding from both railway projects.

In response to Beijing’s decision, Bangladesh said it would seek loans from other channels to complete the projects, according to Nikkei Asia.

China’s BRI (also known as “One Belt, One Road”) is Chinese leader Xi Jinping’s foreign policy project launched in 2013. It aims to extend the regime’s economic and political influence to countries in Asia, Europe, and Africa by recreating ancient China’s silk road and maritime silk road for trading in the 21st century.

The BRI invests Chinese capital in the construction of various high-cost infrastructure projects in more than 60 participating countries. It has been widely criticized as setting up debt traps and causing debt crisis for those countries. For example, Sri Lanka could not pay off the loan and lost its Hambantota port to China.

Bangladesh signed the Belt and Road Initiative (BRI) with China in 2016 at the risk of falling victim to the debt-trap diplomacy and losing strategically important ports on the Bay of Bengal to China, and giving the Beijing regime access points to the Indian Ocean.

The unprecedented funding cut to BRI projects by Bangladesh comes at a time when tensions between the two countries have been rising.

In May, Bangladesh’s foreign minister rebuffed China’s threat toward the South Asian nation joining the Quadrilateral Security Dialogue.

The Quad is a four-nation Indo-Pacific alliance led by the United States, along with India, Japan, and Australia. Beijing considers the Quad a “small anti-Beijing club.”

The Chinese ambassador to Bangladesh and the Chinese Defense Minister threatened that if Bangladesh were to join the group, China–Bangladesh relations would suffer “substantial damage.”

Bangladeshi Foreign Minister A. K. Abdul Momen responded at a press conference on May 11, “We are an independent and sovereign state,” and “We decide our foreign policy. Any country can uphold its position. But we will take decisions considering the interest of people and the country.”

Momen expressed his surprise regarding the long reach of the Chinese communist regime’s “wolf warrior” diplomacy in interfering with Bangladesh’s affairs. He described it as “unusual” and “aggressive,” adding, “We did not expect such behavior from China.”

Alex Wu
Alex Wu
Alex Wu is a U.S.-based writer for The Epoch Times focusing on Chinese society, Chinese culture, human rights, and international relations.