On International Children's Day in 2023, Alifa Chin received a letter from China's President Xi Jinping. "I wish you every success at school. Live your dreams," Xi wrote to the now 14-year-old who lives in the Bangladeshi port city of Chittagong. "If you want, you can study medicine in China later to help other people," he added.

Chin was born on a Chinese navy ship in 2010. It was a difficult birth. Her mother had a heart condition and she had to be transferred from the maternity clinic to the Chinese hospital ship, which was making a regular stop off Bangladesh at the time.

Doctors on the vessel performed an emergency operation, and both mother and baby were fine.

Her father was so thrilled that he named his child "Chin," the Bengali word for China.

And the girl later called the midwife "the Chinese mom."

An all-round strategic partnership

Xi's charm offensive aimed to bring the people of China and Bangladesh closer together. "China and Bangladesh have always been good neighbors and good partners," wrote Xi in his letter to Chin.

Bangladesh is of strategic importance to China. Its location in the eastern part of the Indian Ocean means it is ideally situated for the Belt and Road Initiative (BRI), Xi's signature project aimed at boosting China's economic and political influence by implementing a raft of infrastructure projects and trade networks worldwide.

Bangladesh, with its 172 million people, offers a huge market in the region for China's export-oriented economy.

However, Beijing also sees competitive disadvantages.

Bangladesh shares a land border with only two countries: Myanmar — which is plagued by civil war and from where hundreds of thousands of the long-persecuted Rohingya Muslim minority have fled to Bangladesh — and the South Asian giant India, with which Bangladesh shares a 4,096-kilometer border.

China took a clear line in its response to the recent ouster of Bangladeshi Prime Minister Sheikh Hasina and the formation of an interim administration. "We want to further develop the 'all-round strategic partnership' with the new government in Bangladesh," said a spokeswoman last week.

China's use of the term "all-round strategic partnership" implies a close and trusting relationship, something that Beijing uses when it refers to its ties with nations such as France, UK or Spain.

China uses an even better "comprehensive strategic partnership" to describe its relations with Germany.

Goods and weapons for Dhaka

China has been Bangladesh's largest trading partner for 12 years in a row. "China has built 12 roads, 21 bridges and 27 power plants in Bangladesh," Yao Wen, China's ambassador to Bangladesh, said during a BRI event in Dhaka in September 2023. "Chinese companies have created 550,000 new jobs here."

Chinese companies, for instance, are currently building the 48-kilometer-long, four-lane urban highway around Dhaka. The project, worth €360 million, is scheduled for completion in 2025. The six-kilometer-long road-and-rail bridge over the Padma, Bangladesh's largest river, was also built by China. It is the longest bridge in South Asia and, according to local media, could boost the country's economic growth by 1% per year.

When it came to defense ties, China supplied 72% of the weapons Bangladesh needed between 2019 and 2023, according to SIPRI, a Swedish think tank focusing on global conflict and security.

China played a key role in the construction of the "BNS Sheikh Hasina" naval base south of Chittagong. The base was inaugurated in 2023 and has space for six submarines and eight warships.

Beijing had also supplied two submarines (BNS Nabajatra and BNS Joyjatra, commissioned in 2017) as well as a significant proportion of frigates and corvettes to the Bangladeshi navy. Satellite images show that the submarines built in China have already been stationed there for a year.

"China's ties to the base may go well beyond its construction," according to a report published by the US-based think tank Center for Strategic and International Studies (CSIS).

"A senior Bangladeshi official acknowledged that Chinese personnel would also be involved in training Bangladesh's submariners on how to operate the submarines and the new base, although few details have been shared publicly."

Balancing act between India and China

During her 15-year rule, Hasina learned to balance Bangladesh's ties between the two Asian powers.

As a reliable partner, she did not want to upset New Delhi. But she also wanted to win over China.

After her controversial re-election in January 2024, she first visited India, then weeks later China. And since a mass uprising forced her to flee the country, Hasina has found refuge in India.

Bangladesh is the first South Asian country to officially join the BRI.

Days before her resignation in the wake of the student-led protests, she had announced, immediately after her trip to China, that she wanted to award the multibillion-dollar Teesta river restoration project to Indian companies, even though Chinese firms also took part in the tender.

The Teesta originates in the Himalayan region and flows first through India and then Bangladesh.

Competition stimulates business. In principle, the idea is absolutely right. However, India's home advantage is dwindling. The "India Out Campaign" is in full swing throughout South Asia, not just in Bangladesh. Overall, the region is currently undergoing radical change. There have recently been changes of government even in Nepal and the Maldives.

The communist Khadga Prasad Oli and his new government have been in power in Nepal for four weeks, and he wants to build roads and other infrastructure — with China's help — in the Himalayan nation.

His plans earned praise in his own country, but aroused suspicion in India.

In the Maldives, President Mohamed Muizzu had campaigned with the slogan "India out," and after his inauguration in November 2023, he called for the withdrawal of Indian troops in the island nation and increasingly turned to China as an ally.

China as a 'balancing power' in South Asia

"India's 'Neighborhood First' policy was seen as a counter to China's efforts to garner influence in the region, notably through its Belt and Road Initiative, which has also raised India's ire," political scientist Tasse Walker wrote for the Australian think tank Lowy Institute.

"However, the vast amount of money Beijing is willing to pour into infrastructure and investment proposals is often tempting for smaller South Asian states," she noted, pointing out that, "in Bangladesh, China and Chinese firms have invested an estimated $7 billion, while in the Maldives, the figure stands at $1 billion. This has fueled geopolitical competition with India, which has its own border dispute with China."

"A changing socio-political landscape in South Asia, combined with the economic growth of smaller states within the region, has potentially destabilising effects for India," said Walker.

She described China is a "balancing power" in South Asia and a "counter-hegemony to India."

"That is, where India cannot fill the needs of smaller South Asian states, China exists as a powerful, tempting actor creating economic and political competition within the region. These smaller states are no longer solely reliant upon India as a partner, being able to look elsewhere for foreign investment and large-scale trade. This carries the potential to deepen the rift between India and China."

This article was originally written in German.

"Decoding China" is a DW series that examines Chinese positions and arguments on current international issues from a critical German and European perspective.