Bangladesh's measure of new foreign direct investment stood at $554.63 million in 2025. The figure was up just 1.8% from 2024, a year that saw the most intense political upheaval in two decades. Behind that stagnation sits a sharper warning: registered private investment projects dropped by 58% year-on-year. The collapse in the investment pipeline is troubling because it leaves Bangladesh's new government chasing capital at the precise moment investors appear least willing to commit.
Investment stagnation exposes the fragility of post-upheaval capital flows
Against that backdrop, Tarique Rahman will embark on his first overseas trip since taking office, beginning in Malaysia before moving to China. The six-day trip comes as Rahman's administration seeks foreign capital to support an ambitious economic agenda while strengthening ties with Asian partners. The destinations are not accidental. Discussions in Malaysia are expected to focus on labour migration, recruitment of Bangladeshi workers and broader economic cooperation. In China, the agenda is investment, infrastructure and the terms of Bangladesh's next phase of growth.
The contrast says as much about Bangladesh's economy as it does about its diplomacy. Malaysia remains one of the largest destinations for Bangladeshi migrant workers, and their remittances are a crucial source of foreign exchange. China occupies a different place. Dhaka is seeking to deepen ties with one of its largest trading partners and development financiers. "China is crucial for investment, while Malaysia remains key for overseas employment — both align with the government's economic priorities," said Asif Shahan.
Diplomatic balancing act between remittance dependence and infrastructure ambition
Rahman arrives in Beijing with a crowded agenda. He is scheduled to meet Premier Li Qiang on June 25 and President Xi Jinping on June 26. He will also attend the World Economic Forum's Annual Meeting of the New Champions in Dalian, where business and political leaders will discuss growth, innovation and emerging technologies. Yet the meetings that may matter most are not the public ones. Bangladesh is aiming to sign 15-17 bilateral instruments during the visit, and discussions on the long-delayed Teesta River project are on the agenda. Dhaka is not merely managing a relationship. It is trying to widen the flow of capital into an economy that needs visible commitments.
China has reasons to listen. The visit follows approval of a 41.89 billion taka ($340 million) infrastructure project for the Chinese Economic and Industrial Zone in Chittagong, backed by 24.67 billion taka in concessional Chinese loans. The project is expected to create around 100,000 jobs and attract more than $500 million in foreign direct investment during its initial phase. The numbers fit a longer pattern. Bangladesh joined the Belt and Road Initiative in 2016, but a notable surge in Chinese foreign direct investment appeared from 2011-2012, reflecting investment that preceded the formal framework.
Academic work points to why Dhaka keeps returning to Beijing. Findings reveal that Chinese foreign direct investment significantly contributes to domestic industrial growth, particularly in manufacturing and construction. The Belt and Road Initiative prioritizes infrastructure investment to enhance regional connectivity and foster sustainable economic development. Bangladesh's government is betting that deeper engagement can revive private sector confidence at a moment when domestic investment signals are weakening.
Pledges outpace delivery as confidence becomes the decisive constraint
The problem is that commitments and cash are not the same thing. Chinese firms have pledged nearly $1 billion of investment in Bangladesh since August 2024. More than 30 Chinese enterprises have signed investment agreements with Bangladeshi partners since that date. Leaders of the Chinese Enterprises Association in Bangladesh have expressed optimism about further investments. Those announcements arrive alongside an economy where net equity inflows barely grew in 2025 and where The Daily Star said the cautious "wait-and-see" approach of 2024 had hardened into a decisive "go elsewhere" stance by 2025. Bangladesh is attracting attention. Whether it is attracting conviction remains unresolved.
That uncertainty gives Rahman's trip a diplomatic significance beyond economics. The visit has broader diplomatic significance because Bangladesh is recalibrating relationships that were reshaped by domestic upheaval. Former prime minister Sheikh Hasina was widely seen as closer to New Delhi, although she maintained ties with both India and China while securing significant Chinese-backed infrastructure investments. Relations between Dhaka and New Delhi have improved since Rahman's government took office in February, yet disagreements remain, including border tensions and alleged migrant push-ins across the frontier. "Although ties with India have improved somewhat, tensions persist, notably over border issues," Asif Shahan said.
Confidence gap emerges as the defining constraint on Bangladesh’s growth agenda
That leaves Bangladesh pursuing two forms of security at once: remittances from Malaysia and investment from China. One keeps foreign exchange flowing today. The other promises factories, infrastructure and jobs tomorrow. But a 58% collapse in registered private investment projects suggests the market has already rendered a harsher verdict than diplomats will admit. Rahman is travelling to Kuala Lumpur and Beijing in search of capital, yet the most consequential fact he carries with him is that Bangladesh no longer has an investment problem measured by money alone. It has one measured by confidence, and confidence is the only form of capital no bilateral agreement can compel.
