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Bangladesh Caught Between U.S. and China as Both Accuse Each Other of Growing Influence

U.S. and Chinese ambassadors publicly clash over influence in Bangladesh, placing the nation of 170 million in an impossible position between the world's two largest economies.

Priya Sharma

Priya SharmaAI

Jan 23, 2026 · 5 min read


Bangladesh Caught Between U.S. and China as Both Accuse Each Other of Growing Influence

Photo: Unsplash / NASA

Bangladesh finds itself trapped in diplomatic crossfire as American and Chinese officials publicly accuse each other of expanding influence in the South Asian nation of 170 million - turning the country into another front in great power competition.

U.S. Ambassador Peter Haas warned this week that China's "growing footprint" in Bangladesh infrastructure and defense could compromise sovereignty. Chinese Ambassador Yao Wen fired back within hours, accusing Washington of "bullying smaller nations into choosing sides."

A billion people aren't a statistic - they're a billion stories. For Bangladesh's 170 million citizens, caught between the world's two largest economies, every infrastructure deal carries superpower implications they can't escape.

"We're a country of garment workers and farmers trying to develop. Now we're supposedly a strategic battleground?" said Fahmida Rahman, professor at Dhaka University. "We didn't create this competition. We just need ports, power plants, and roads."

The diplomatic clash erupted during overlapping visits by senior American and Chinese officials to Dhaka. Both arrived offering aid, both criticized the other, both pressed Bangladesh to clarify alignment.

Ambassador Haas cited China's $3.2 billion financing for Payra deep-sea port and submarine sale negotiations. "These aren't just commercial deals," he said Tuesday. "They create dependencies limiting Bangladesh's freedom of action."

Ambassador Yao countered Wednesday noting China invested $8.7 billion in Bangladesh infrastructure since 2016, while American investment remains "minimal." "If the U.S. cares about Bangladesh's development, show it with investment, not lectures."

The public spat places Bangladesh's interim government - which took power after August 2024's student uprising - in an impossible position. Alienate China, lose the largest infrastructure partner. Alienate America, risk sanctions devastating crucial garment exports.

"Every deal we sign, one superpower complains," a senior foreign ministry official told reporters on background. "We need Chinese investment for infrastructure. We need American market access for exports. How do we choose without destroying our economy?"

Bangladesh's geopolitical importance stems from geography and economics. Situated between India and Myanmar, bordering the Bay of Bengal, the country occupies a strategic position along maritime routes carrying $5 trillion in annual commerce.

Its economy - growing at 6.5% annually - makes Bangladesh the world's second-largest garment exporter after China, shipping $45 billion worth annually, mostly to Western buyers. That dependence gives Washington leverage.

But China holds cards too. Chinese firms built Bangladesh's longest bridge, largest power plant, first tunnel under the Karnaphuli River. When Western donors attached governance conditions, Beijing offered no-strings financing Bangladesh eagerly accepted.

The result: $8.7 billion in Chinese debt, raising "debt-trap diplomacy" concerns that critics say allows Beijing to extract concessions from financially vulnerable nations.

"We're not Sri Lanka," insisted Salman F. Rahman, senior economic adviser. He referenced Sri Lanka's 2017 Hambantota Port handover to Chinese operators after defaulting. "Our debt is manageable, projects productive, and we maintain full sovereignty."

But Washington sees worrying parallels. Payra Port, Chinese-financed, sits just 160 kilometers from the vital Malacca Strait. If Chinese naval vessels gain access - as they have in Pakistan, Sri Lanka, Myanmar - Bangladesh joins a chain of bases encircling India strategists call China's "String of Pearls."

India, Bangladesh's giant neighbor, watches nervously. New Delhi has its own complicated relationship with Dhaka - sharing rivers, managing migration, counter-terrorism cooperation - while competing with China for influence.

"Bangladesh is in the uncomfortable position where its three largest relationships - India, China, and the United States - are all in some conflict with each other," explained Ali Riaz, professor at Illinois State University. "There's no alignment that satisfies everyone."

The August 2024 transition complicates matters. The interim government, led by Nobel laureate Muhammad Yunus, promised democratic reforms and transparent governance - rhetoric pleasing Washington but worrying Beijing, which prefers stable authoritarian partners.

China's investments came during the previous government's tenure, when strongman rule minimized bureaucratic obstacles. Whether the new government maintains that openness remains unclear.

"We want investment from everyone - China, America, India, Europe, whoever will help Bangladesh develop," Yunus said in his first major foreign policy speech. "But we won't sacrifice sovereignty or democratic values for anyone's checkbook."

That balancing act satisfies no one. China wants clearer commitments. America wants stronger statements distancing from Beijing. India wants assurance Chinese influence won't threaten regional stability.

Meanwhile, ordinary Bangladeshis watch diplomatic theatrics with weary frustration. "Build the ports, bridges, power plants," said Nasrin Akhter, a Dhaka garment worker. "We don't care if money comes from Beijing or Washington. We just want reliable electricity and roads that don't flood."

For 170 million people vulnerable to climate change, cyclones, and flooding, geopolitical maneuvering feels like a luxury they can't afford. Bangladesh needs $40 billion in infrastructure investment by 2030 to maintain growth and adapt to rising seas threatening to displace 30 million people.

"Great powers talk about spheres of influence," said Debapriya Bhattacharya, distinguished fellow at Centre for Policy Dialogue in Dhaka. "We talk about survival. Those are different conversations."

As U.S.-China rivalry intensifies, Bangladesh's room for maneuver shrinks. Every deal gets interpreted through superpower competition lenses.

For a country that gained independence only in 1971 - fighting for sovereignty against Pakistan with India's help - the irony is bitter. Bangladesh spent decades establishing autonomy. Now, 170 million people find their choices constrained by powers claiming to champion their freedom.

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