US Seeks to Counter China's Influence in Bangladesh

China’s growing influence: Following the political upheaval in Bangladesh in August 2024, when Prime Minister Sheikh Hasina, allied with India, fled the country, China has deepened its engagement in Dhaka. Key developments include signing a defence agreement to build a drone factory near the India-Bangladesh border and negotiations with Pakistan for JF-17 Thunder fighter jets, a multi-role combat aircraft co-developed with China.

Strategic implications: This expansion signifies China’s aim to strengthen its presence in South Asia, particularly along the India border, at a time when India’s influence has waned due to political changes. China’s official position emphasizes mutually beneficial cooperation, claiming that the partnership is not directed against any third party and rejecting foreign interference.

Regional security impact: The presence of Chinese defence infrastructure in Bangladesh may alter the strategic balance in the Bay of Bengal region. It also pressures neighboring states, including India, to recalibrate their security and diplomatic policies. The developments highlight the role of small and medium states as arenas for great power competition.

Countering Chinese influence: The U.S. is concerned about China’s growing presence in South Asia, particularly in strategically sensitive countries like Bangladesh. By offering U.S. and allied defence systems as alternatives, Washington aims to provide Dhaka with options that reduce dependence on Chinese hardware, thereby maintaining a balance of power.

Strategic objectives: The United States seeks to strengthen regional stability by ensuring that Bangladesh does not tilt entirely toward China. A diversified defence partnership also aligns with Washington’s broader Indo-Pacific strategy of promoting open, rules-based security cooperation and supporting countries in acquiring technology that meets international standards.

Commercial and diplomatic considerations: Beyond defence, the U.S. sees Bangladesh as a potential hub for investment and commercial diplomacy. By engaging the next government, the U.S. aims to encourage openness to American business, enhance security collaboration, and consolidate influence in a key South Asian state.

Impact on India-Bangladesh relations: The ouster of India-allied Prime Minister Sheikh Hasina has significantly strained ties with New Delhi. Visa services, bilateral trade facilitation, and cultural exchanges, including cricket ties, have deteriorated. The political vacuum created an opening for other actors, particularly China, to strengthen their presence.

Effect on multilateral engagement: The U.S. and allied countries have responded by offering alternative defence and commercial partnerships. Washington’s ambassador emphasized working with whichever government is elected to ensure Dhaka remains open for business while mitigating risks associated with Chinese dominance.

Broader geopolitical implications: The shift highlights Bangladesh’s importance in South Asian geopolitics. Great powers view Dhaka as a strategic pivot, influencing trade routes, maritime security, and regional power dynamics. The domestic political transition underscores how internal politics in smaller states can have outsized effects on regional security and diplomacy.

Pros: Diversifying defence partnerships can enhance Bangladesh’s military capability, reduce over-dependence on a single country, and foster technology transfer. Access to multiple sources of hardware may increase negotiation leverage and provide modernisation opportunities for the armed forces.

Cons: Engaging competing powers risks diplomatic friction. Close cooperation with China could alienate India and the U.S., while reliance on Western systems may provoke Chinese pushback. Managing divergent standards, interoperability issues, and political expectations adds complexity to Bangladesh’s defence planning.

Strategic balancing: Bangladesh faces the challenge of navigating a competitive environment in South Asia. By maintaining relationships with both China and the U.S., Dhaka may pursue an independent foreign policy, but it must carefully manage security dependencies and avoid becoming entangled in great power rivalries. This balancing act reflects the wider tension in South Asia between sovereignty, security needs, and external influence.

Rohingya refugee support: The United States has been the largest contributor to humanitarian operations for the 1.2 million Rohingya refugees in Bangladesh. Programs include health services, education support, and basic needs provision. Recently, the U.S. signed a $2 billion global funding framework with the UN to enhance the effectiveness of such programs in Bangladesh.

Commercial diplomacy: U.S. officials are promoting investment in Bangladesh, highlighting opportunities for American businesses. The ambassador stressed that a new government must signal openness for business to encourage foreign direct investment, diversify the economy, and foster development.

Multilateral collaboration: U.S. efforts also involve urging other international partners to increase their contributions toward refugee support. This reflects a comprehensive approach combining humanitarian assistance, economic engagement, and diplomatic influence to strengthen bilateral ties while addressing regional challenges.

Opportunities: Bangladesh can modernize its military capabilities quickly by leveraging technology and expertise from both China and the U.S. It may secure better terms and pricing by maintaining competition between suppliers and gain access to a diverse range of platforms, such as drones from China and allied systems from the U.S.

Challenges: Dual engagement creates logistical and operational challenges. Interoperability issues, differing maintenance standards, and conflicting training doctrines could complicate military readiness. Politically, balancing relations may become sensitive as China may perceive U.S. collaboration as a threat, while the U.S. may demand transparency and adherence to its strategic frameworks.

Policy implications: Bangladesh must adopt careful defence diplomacy, establish robust procurement protocols, and engage in strategic communication to reassure both powers. A dual approach offers autonomy but requires sophisticated planning to avoid dependency traps or diplomatic backlash.

Importance of commercial diplomacy: The U.S. views Bangladesh as a market with significant investment potential, but high taxes, profit repatriation challenges, and limited U.S. business presence have constrained engagement. Promoting commercial diplomacy is a strategy to encourage trade, investment, and economic reforms.

Strategic rationale: Economic engagement complements defence and geopolitical goals. Strong commercial ties create interdependencies that reinforce bilateral relations, enhance influence, and support broader regional stability. For instance, Chevron’s decades-long presence demonstrates how energy sector investments can foster long-term partnerships.

Potential implications: Successful commercial diplomacy could accelerate infrastructure development, create jobs, and increase technology transfer. It may also incentivize Bangladesh to maintain balanced foreign relations while strengthening governance and regulatory frameworks to attract international capital, thereby enhancing regional competitiveness and resilience.