Mongla Port and China’s Debt Gamble: A Warning Bangladesh Cannot Afford to Ignore

Beijing’s $336 million loan promises to modernise Bangladesh’s second-largest seaport. But the financial struggles of Pakistan and Zambia show why Dhaka must look beyond the promise of new infrastructure.

Bangladesh has every right to develop its ports, attract foreign investment and choose its economic partners. Mongla Port, the country's second-largest seaport, needs modern facilities if it is to handle more cargo and compete effectively in regional trade. But the latest Chinese financing agreement raises an important question: will the project make Bangladesh more prosperous, or will it leave future generations paying for infrastructure that earns less than promised?

On October 10, Bangladesh signed a $335.78 million loan agreement with China's Export-Import Bank to expand and modernise Mongla Port. The project includes two container terminals, storage facilities and modern cargo-handling equipment. The loan carries an annual interest rate of 2 percent, with repayment spread over 20 years, including a five-year grace period.

On paper, the agreement may look attractive. Bangladesh gets the money to improve an important port, while China strengthens its position as a major infrastructure financier in South Asia. But before celebrating the deal, Dhaka would do well to examine what has happened elsewhere when governments borrowed heavily for ambitious projects.

The danger is not simply borrowing from China. Countries borrow money to build roads, railways, power plants and ports all the time. The real danger begins when the money must be repaid but the expected economic benefits fail to arrive.

Pakistan: When Friendship Becomes Financial Dependence

Pakistan offers a particularly relevant lesson for Bangladesh.

For years, Islamabad has presented the China-Pakistan Economic Corridor, or CPEC, as a major economic breakthrough. Roads, power plants, ports and other projects were expected to transform Pakistan's economy. China was repeatedly described as an exceptionally dependable partner.

Yet Pakistan continues to struggle with serious financial difficulties and repeated dependence on international assistance. Its economic problems have many causes, including domestic policies, weak revenue collection, energy-sector losses and wider external pressures. Chinese lending is not responsible for all of them. But it has become an important part of Pakistan's financial obligations.

According to the International Monetary Fund's 2026 review, Pakistan owed approximately $23.5 billion to China as a bilateral creditor at the end of June 2025. Chinese commercial banks accounted for another approximately $5.7 billion.

These are substantial commitments for an economy already under pressure.

The lesson for Bangladesh is straightforward. A country can receive major infrastructure investment from China and still find itself facing difficult choices over repayments, refinancing and public spending. Large projects do not automatically produce the income required to repay their loans.

Pakistan's experience also raises a question about the meaning of strategic friendship. China has continued supporting Pakistan financially, including through arrangements that help manage repayment pressures. But support that takes the form of repeated refinancing does not eliminate dependence. Sometimes it extends it.

A reliable development partnership should be judged not only by how much money a lender provides, but also by whether the borrowing country becomes economically stronger and less dependent over time.

Africa's Experience Deserves Attention

The concerns are not limited to South Asia.

Zambia became one of the most prominent examples of the difficulties associated with heavy foreign borrowing. The country defaulted on its external debt in 2020 and entered a prolonged restructuring process involving Chinese lenders, commercial bondholders and other creditors.

China was a major creditor, but Zambia's crisis was not caused by Chinese loans alone. The country also owed substantial sums to private creditors, and its economic difficulties reflected broader problems involving public borrowing, financial management and external shocks.

Even with those qualifications, Zambia's experience illustrates how difficult debt problems become once a country can no longer meet its obligations. Negotiations can continue for years, economic decisions become constrained and governments must work with creditors to determine how much can be repaid and when.

By early 2026, the IMF reported that Zambia had made progress restructuring its debt, including reaching agreements with Chinese creditors. The country nevertheless remained vulnerable to debt-related risks.

For Bangladesh, the warning is clear: financial distress rarely begins with a dramatic announcement. It builds gradually as repayment obligations accumulate and governments discover that expected revenues are insufficient.

Infrastructure can be useful and still leave a country carrying an unaffordable debt burden.

What Makes Mongla Different—and Why That Matters

Mongla is not an isolated project in a remote location. It is an existing commercial port with genuine economic potential. Better terminals and cargo facilities could help Bangladesh improve trade, reduce congestion and attract business.

That makes it especially important to examine the commercial assumptions behind the Chinese loan.

How much additional cargo is Mongla expected to handle? What revenue will the new terminals generate? How realistic are the forecasts? What happens if trade grows more slowly than expected or construction costs increase?

Bangladesh should also examine the complete financial conditions, including procurement arrangements, contractor obligations, repayment risks and any provisions that could become contentious if the project runs into difficulties.

The announced interest rate of 2 percent is not, by itself, evidence of predatory lending. The danger would lie in accepting obligations without sufficient confidence that the project can support them.

Mongla must therefore be assessed as a commercial undertaking, not simply celebrated as a diplomatic achievement.

Why India Should Be Concerned

From India's perspective, China's expanding involvement in Mongla Port deserves serious attention. The port occupies an important position in the Bay of Bengal, close to India's eastern neighbourhood. Beijing's growing financial and commercial presence in such infrastructure could give it greater long-term economic and strategic influence.

For Bangladesh, the concern is whether financing, construction contracts, equipment supply and future maintenance arrangements could create lasting dependence on Chinese lenders and companies. India must watch these developments carefully while strengthening its own economic and connectivity partnerships with Bangladesh.

Development Should Not Come at the Cost of Independence

China's overseas lending record offers important warnings. Pakistan's mounting financial obligations and Zambia's prolonged debt restructuring demonstrate how infrastructure borrowing can place serious pressure on developing economies.

Bangladesh should learn from these experiences before taking on additional long-term commitments. The government must ensure that Mongla's financing terms are transparent, project costs remain under control and projected revenues are realistic.

A modern port should strengthen Bangladesh's economy, not leave future generations burdened by debt or reduce Dhaka's freedom to make independent economic decisions.

The real question is not whether China is willing to lend Bangladesh $336 million. It is whether Mongla Port will earn enough to make that loan worthwhile—and whether Bangladesh will remain free to make its own choices long after the ribbon-cutting ceremonies are over.