China has agreed in principle to extend the repayment period for loans to Bangladesh and assured that it would review the request to lower interest rates, aiming to ease the country's foreign debt burden.
During a meeting with Chinese Foreign Minister Wang Yi, Foreign Adviser Touhid Hossain requested a reduction in the interest rate on Chinese loans from 2-3% to 1%, the waiving of commitment and management fees and an extension of the loan repayment period from 20 to 30 years for both preferential buyer's credit and government concessional loans.
The meeting took place at the Diaoyutai State Guest House in Beijing on Tuesday (21 January).
Praising Bangladesh's commendable repayment record, Wang agreed to extend the maturity period of the loans and assured Dhaka that the request to lower interest rates would be considered, according to a statement from Bangladesh's foreign ministry.
During further discussions with Luo Zhaohui, chairman of the China International Development Cooperation Agency, Touhid Hossain sought an increase in concessional loans and grants.
Luo responded positively and requested a list of priority projects from Bangladesh, expressing openness to funding larger projects with some support in the form of grants.
China assured continued duty-free and quota-free access for Bangladeshi products for three years after Bangladesh graduates from the least-developed country status in 2026.
Additionally, China offered to designate hospitals in Kunming for Bangladeshi patients and welcomed the proposal for a Chinese hospital in Dhaka to commemorate the 50th anniversary of diplomatic relations.
Both sides reiterated their commitment to strengthening cooperation under the Belt and Road Initiative, focusing on projects like the Dasherkandi sewage treatment plant, the modernisation of Mongla Port, and the expansion of digital connectivity.
The meeting also touched on the Rohingya crisis, with China reaffirming its support for a roadmap to a sustainable solution.
The two nations signed an implementation plan for exchanging hydrological information on the Yaluzangbu-Jamuna rivers.
Bangladesh confirmed its unwavering support for the "One China Principle" and UNGA Resolution 2758, underscoring its strategic partnership with China.
Bangladesh's fourth-largest lender after Japan, the World Bank, and the Asian Development Bank, China has disbursed $7.5 billion in loans since 1975.
