Dhaka: Bangladesh’s consideration of a proposed China-Myanmar-Bangladesh Economic Corridor has sharpened debate over whether Dhaka can attract much-needed Chinese investment without becoming more deeply entangled in the strategic rivalry among Beijing, New Delhi and Washington.The proposed corridor promises improved regional connectivity and fresh investment at a time when Bangladesh is trying to revive economic growth. But analysts say it would also expand China’s presence on the Bay of Bengal, making any decision as much a geopolitical calculation as an economic one.The corridor was among the issues discussed during Prime Minister Tarique Rahman’s visit to China from June 22-26. Following the visit, Bangladesh’s National Security Adviser and High Representative Khalilur Rahman said the government was evaluating Beijing’s proposal to establish an economic corridor through Myanmar and had “not yet taken any position” on the initiative.Nevertheless, the Chinese proposal created headlines in India. When asked about Bangladesh’s growing strategic engagement with China – including discussions on the proposed corridor, possible acquisition of Chinese J-10CE fighter aircraft and Beijing’s involvement in the Teesta River Comprehensive Management and Restoration Project – India’s external affairs ministry spokesperson Randhir Jaiswal said on July 3 that India was closely monitoring developments in its neighbourhood and would take “appropriate measures as required.”A day earlier, Chinese ambassador to Bangladesh Yao Wen said Beijing had first proposed the corridor more than a decade ago under the Bangladesh-China-India-Myanmar (BCIM) framework, when India was also envisaged as a participant. India had not responded at the time, he said, adding that the initiative remained open to other countries, including India.For analysts, the proposed corridor is as much a geopolitical proposition as an economic one. While the project could attract substantial Chinese investment, it would also test Bangladesh’s ability to balance relations with competing regional powers at a time of heightened strategic rivalry in the Indo-Pacific region.Domestic politics in the backdropThe foreign policy debate is unfolding as the Rahman government also contends with domestic political pressures.In an interview with Reuters published on July 10, deposed former prime minister Sheikh Hasina said she intended to return to Bangladesh in December and surrender before the courts, while urging Awami League leaders living in exile to return with her. Hasina has been living in India since August 5, 2024, after she was removed from office during the student-led mass uprising that ended her more than 15 years in power.On July 10, Bangladesh’s government issued a notice directing print, broadcast and online media, as well as social media platforms, to comply with court orders regarding the publication and broadcast of statements by the fugitive former prime minister.Analysts interviewed by The Wire said there was little evidence that Hasina’s return was imminent, viewing the announcement largely as an attempt to rally Awami League supporters rather than signal an immediate political comeback.A former leader of the central committee of the banned Bangladesh Chhatra League, the student wing of the Awami League, told The Wire that he remained optimistic that Hasina would return later this year, claiming that India and the United States would ultimately favour her return because of concerns over the growing influence of Jamaat-e-Islami. However, other party activists did not describe any organisational planning to support such a move.Former ambassador to the United States, M. Humayun Kabir, said Bangladesh should view the proposed corridor primarily through the prism of its own national interests rather than the strategic competition surrounding it.Asked whether Hasina’s remarks, coming soon after Rahman’s China visit, reflected a broader geopolitical contest, Kabir said that he did not see a direct connection. “She may simply be trying to energise and motivate her party workers,” he said, noting that Hasina had delivered similar messages on several occasions since leaving office.“As the leader of a political party, she has a responsibility to keep her supporters motivated. The Awami League still has a large number of activists, so that could be one reason.”Kabir said India was closely watching developments in Bangladesh but argued that the discussion over the proposed corridor was unlikely to cause immediate alarm in New Delhi.“There is now a growing realisation within India itself that it needs to work with China,” he said, pointing to recent efforts by both countries to stabilise relations and expand economic engagement.He also noted that China’s ambassador had publicly said the proposed corridor was not intended to exclude any country.“If India wants to participate, this could resemble the BCIM initiative that existed until around 2013,” Kabir said. “I don’t think it is impossible for that framework to be revived in some form.”For Bangladesh, however, he argued that the more immediate question was whether the country had the institutional capacity to undertake such an ambitious initiative. “Simply talking about it is not enough,” he said.Kabir said any decision would also have to take into account Bangladesh’s negotiations with Myanmar, China’s potential role in facilitating those discussions and the unresolved Rohingya crisis.“At this moment, Bangladesh actually needs such an economic corridor,” he said. “If we want to revitalise our economy, this kind of major connectivity initiative is extremely important.”At the same time, he cautioned that the government would need to significantly strengthen its institutional and administrative capacity before embarking on a project of this scale. “Major initiatives like this also require sound geopolitical and political decision-making,” he said.Economic promise, strategic risksSeveral analysts interviewed by The Wire said the proposal should not be viewed solely as an infrastructure project. By potentially giving China another gateway to the Bay of Bengal, they argued, the corridor carries strategic implications that extend well beyond trade and investment.An economist at a Dhaka-based private think tank, who requested anonymity because of the sensitivity of the issue, said Bangladesh’s decision would inevitably have geopolitical consequences.“If Bangladesh joins the corridor, substantial Chinese investment could flow into the country,” he said. “If it does not, bilateral economic ties will likely continue much as they are now, with relatively limited investment.”He argued the decision would have been far less contentious had India remained part of the original BCIM framework. “But India is no longer involved because it does not want China to gain this strategic access. That is why politics is becoming more important than economics in this matter,” he added.Masrur Reaz, chairman and chief executive of Policy Exchange, said Bangladesh would first have to overcome two major obstacles before such a corridor could become viable. “The first challenge is that Myanmar is in the middle of a civil war,” he told The Wire, questioning how an economic corridor could function through a country that is experiencing civil war.He said the most basic requirement for such a corridor is law and order, and Myanmar is facing the “highest level of disorder”. The second challenge, he said, is the Rohingya issue, adding that Bangladesh should not move ahead with another major engagement with Myanmar until that is resolved.On the economic front, Reaz said the biggest gains would come if Chinese foreign direct investment increased and Bangladesh expanded its exports to China. He noted that Bangladesh has enjoyed duty-free access for around 8,000 products since 2021. “If we can take advantage of that opportunity, it would be beneficial.”Reaz also argued that the corridor could reduce Bangladesh’s dependence on existing routes by opening another gateway through Myanmar.“Bangladesh has long wanted alternatives. Relations with India have fluctuated between good and bad. We have very little communication or integration with Myanmar. If this corridor opens, it creates another gateway. If we can reach China through Myanmar, there could at least be opportunities for tourism and healthcare.”On infrastructure, Reaz said China could finance projects that institutions such as the World Bank and the Asian Development Bank often hesitate to support because of high environmental and social risks. “China is generally much quicker to respond to such financing needs. So Bangladesh has a significant infrastructure financing gap, and China could help fill that gap,” he said.Why Beijing remains central to Bangladesh’s economic plansRahman made his first visit to China focused on economic engagement, trade, investment, infrastructure and connectivity, prioritising Chinese investment in a shift away from India backed projects.During the June visit, Bangladesh and China signed 13 memorandums of understanding covering areas including trade, investment, infrastructure and connectivity following talks between Rahman and Chinese Premier Li Qiang in Beijing.Among the agreements was a deal with a Chinese state-owned company to develop an economic zone at Mongla on land originally earmarked for an Indian economic zone, marking a significant shift in Bangladesh’s investment strategy.The site had initially been allocated to India under an agreement signed in 2015. However, following Bangladesh’s political transition in August 2024, the Chinese embassy in Dhaka proposed establishing a Chinese economic zone after the Indian project failed to meet the implementation timeline of two years.The emphasis on Chinese investment reflects Bangladesh’s growing need for external capital as the country grapples with slowing growth, high unemployment and pressure to generate new manufacturing and infrastructure investment.China has steadily expanded its economic footprint in Bangladesh over the past decade. Until 2016, it was not among the country’s top 10 sources of foreign direct investment. That changed after Chinese President Xi Jinping’s visit to Dhaka, when Beijing pledged approximately $40 billion in investment and financing commitments.In the decade since that state visit, China has emerged as a major investor by heavily financing large-scale energy and infrastructure projects.Since then, China has financed several of Bangladesh’s largest infrastructure projects, including the Padma Bridge Rail Link, Karnaphuli Tunnel, Chattogram-Cox’s Bazar railway line, Payra Thermal Power Plant, Chattogram Elevated Expressway and Dasherkandi Sewage Treatment Plant.This multi-billion-dollar influx of Chinese financing into major infrastructure projects underpinned an era of massive development, helping sustain an annual economic growth rate of 6-7% and positioning Bangladesh as the fastest-growing economy in South Asia.The scale of that investment has transformed China’s position in Bangladesh’s economy. From ranking 16th among foreign investors in 2016 with a 1.6% share of total FDI stock, China had become the country’s third-largest source of FDI by 2025, accounting for nearly 10% of total FDI stock.Over the same period, the United States’ share of Bangladesh’s FDI stock fell from 22% to 5.36%, placing it seventh among foreign investors in 2025. India’s share increased more modestly, from 2.3% to 4.6%, although investment slowed after the political transition as several India-backed projects were delayed, suspended or cancelled because of implementation bottlenecks.China has also emerged as Bangladesh’s largest private-sector creditor. According to Bangladesh Bank data, China’s share of the country’s private-sector long-term external debt rose to 34.2% in 2025 from 7.5% in 2020, making it the largest creditor in that category. By comparison, the United States ranked fourth, while India did not feature among the top 10 creditor countries.Whether Bangladesh ultimately embraces the corridor will depend not only on its commercial viability but also on developments beyond its borders, from the conflict in Myanmar to the trajectory of Asian power balance. For now, officials insist no decision has been taken, leaving Dhaka to weigh the economic opportunities offered by Beijing against the strategic costs that could accompany them.