The Bangladesh Shipping Corporation has bought six new ships from China's National Machinery Import and Export Corporation in Beijing at an estimated cost of $ 171 million.
The money will be provided by China to Bangladesh under a preferential loan arrangement with an interest rate set at around 2 per cent.
Following the deal signing, Mohammad Nasir Uddin Chowdhury, assistant manager of BSC, was quoted by the Daily Star as saying, "The buying process of the vessels was set out according to a government to government preferential loan from China to Bangladesh after the CMC gave a proposal around five months ago".
Besides such preferential loans, China has been Bangladesh's top lender over the past decade. During the past three years, Bangladesh has sought over $5 billion as loan from China for 29 development projects.
According to officials of the Economic Relations Division of Bangladesh, Beijing has already finalised loans for the 7th Bangladesh-China Friendship Bridge on the Arial Khan River in Kazirtek of Bangladesh, the Bangladesh-China Friendship Exhibition Centre in Dhaka and setting up of the Shahjalal Fertiliser Factory and 3G telecommunication system upgradation.
According to Economic Relations Division sources, China has recently agreed to fund two other priority projects of Bangladesh including a water treatment plant in Padma River near Mawa and Info-Sarker under the Ministry of Information & Communication Technology.
Besides aiding in infrastructure projects, China has been one of Bangladesh's top arms suppliers in the past three years. Bdnews24.com in Bangladesh, in a report on the multibillion dollar revamp of the Bangladesh Air Force, quoted from a report of the parliamentary standing committee that "Bangladesh installed short-range air defence system in December last year. It signed agreements last year to buy one squadron of F-7 BGI fighter planes, three MI-171 helicopters and two AD radars" at a total cost of nearly $ 800 million.
In 2011, the Bangladesh Army announced the procurement of 44 Main Battle Tanks and three armoured recovery vehicles from China at a total cost of $ 164 million.
Besides Bangladesh, China also sells arms to Pakistan. The trend has been termed by most India-based experts as the "strategic encirclement" of India by China.
Foreign relations expert Professor M Shahiduzzaman, a faculty at the department of International Relations at the Dhaka University, felt that India has little to fear about China's involvement with its neighbours.
"China's motive is more about profit and economic gains than on military gains," he told rediff.com while explaining China's involvement in the South Asian region.
He believed that China would not want to affect its gradually improving ties with India as "China has been increasingly eager to discuss outstanding issues it shares with India".
Shahiduzzaman added that burgeoning relation between China and Bangladesh is nothing new.
"The ties actually predate even the Liberation War of 1971," he recalled, adding, "India has little to worry because Bangladesh has important trade relations with India too".
"Bangladesh would not want to lose either of these two friends (China and India)," he concluded.