The Risk of Chinese Investment in Bangladesh
Much of Asia is currently seeing an influx of Chinese investment, as China is finally realizing the One Belt and Road Initiative it has in mind. With investments across multiple Asian countries, Chinese investors are finally spreading their wings across much of Asia as a whole.
However, as was expected the cultural differences and diversity are having a role to play in making this difficult for all parties involved. Bangladesh is one country where recent conflicts have marred the work being done by Chinese investors.
Nearly a month ago, clashes between local and Chinese workers led to a shutdown of the Payra thermal power plant located in southern Bangladesh. It has been a month since these riots occurred, but work on the power plant has still not resumed. Concerns within the local Bangladeshi government are increasing over whether the commissioning with take more time and work will be delayed for longer.
The government of Bangladesh, realizing the role of China in investment in Asia, is currently concerned whether such accidents might scare away foreign investors from the region. Foreign investors, mostly from China, have thronged the nation with multiple opportunities, but with conflicts increasing, these investors might have no other alternative but to leave the nation for other opportunities. China has poured in billions of dollars in foreign direct investment, which is why the Bangladeshi government understands the risk of scaring them away.
A consortium between China and Bangladesh is responsible for the building of the 1,320 megawatt coal-fired power plant located within Patuakhali, a district located some 330 kilometers south of Dhaka. China is providing 85 percent of the funds for the plant.
“We’ve to be very careful in handling these matters and we simply can’t be seen as hostile to our friends and development partners,” Munshi Faiz Ahmed, who is a former ambassador to China and currently chairs the Bangladesh Institute of International and Strategic Studies, a semi-official think tank.
Bangladeshi government authorities realize what is at stake here, and are in the process of ensuring that the safety and security of all foreign nationals coming from investor countries are guaranteed. Dhaka should realize the growth potential that China presents, and should hence draft regulations to minimize conflict. The downtime in the process for completing the Payra thermal power plant will prove costly for both China and Bangladesh, which is why they are best minimized.