Chinese Companies Indulge In Illegal Activities In Bangladesh

Across South Asia, China’s debt trap policies have become more evident and apparent. This is so not only in the strategic realm, but also in more practical day-to-day aspects of business. Countries like Sri Lanka and Bangladesh, today know very well the high cost that is being paid for the corrupt practices of Chinese companies. Recently, Bangladesh authorities have noticed cases of several Chinese firms indulging in unscrupulous practices, especially in the construction sector and printing of counterfeit
documents, as well as in the trade of prohibited items. This has brought to the fore, fears of further corruption being inserted by China into Bangladesh. Many of these narratives are important lessons for South Asian countries, as they look to learn from the perfidious activities of China.

In May 2022, a case was registered against a Chinese company, Hangzhou Union Biotechnology Co Ltd (HUBCoL), which primarily engages in food additives and pharmaceutical materials. This was for attempting to import prohibited items into Bangladesh. HUBCoL had supposedly declared the sending of a consignment of Soda Ash Light to one of its Dhaka-based associates. However, on physical examination, Bangladesh authorities recovered 19 tonnes of Sodium Cyclamate (SC), concealed under the label of Soda Ash Light. SC is basically a type of condensed sugar, which is 30 to 50 times sweeter than ordinary sugar. Bangladesh Government has declared SC an illegal and prohibited item. Hence, the export/import, production or use of SC in any form, is a punishable offence in the country. The consumption of SC increases the risk of contracting cancer. In order to dodge Bangladesh authorities, HUBCoL had furnished a false declaration, reports Bangladesh
Live News (8 June 2022). The consignment had originated from CNTAO Qingdao Port, China and arrived in Chittagong.

In yet another case of corruption by Chinese companies in Bangladesh, it was reported that an official of China Harbor Engineering Company (CHEC), which has been working as a sand-filling contractor at Sabrang Tourism Park, Teknaf, Cox’s Bazar, was penalized BD Taka 2.5 lakhs and sentenced (Jun 04) to three months imprisonment by authorities for illegally selling-off sand, meant for the filling work. Notably, these are not the first cases of illegal activities of Chinese companies and officials in Bangladesh. Earlier in December 2021, authorities had found that China Road & Bridge Construction (CRBC) company, engaged in the construction of roads and
bridges, was involved in tax evasion while importing construction material for government projects.

In January this year, a Chinese company Digi Anti Fake Company had supplied counterfeit band rolls (a thin ribbon wrapped on bidi and cigarette packets) resulting in tax evasion of BD Taka 250 crore for Bangladesh. Another case of tax evasion came to light when Tianye Outdoor (BD) Co Ltd
(TOCL), a subsidiary of Chinese company Comefly Outdoor Co Ltd had allegedly indulged in tax evasion and fraud to the tune of approximate BD Taka 21 crore.

In May 2022, Bangladesh authorities found that Sino-Kemmed Trading Co., a subsidiary of Global Pet Products Co Ltd. located in Shenzhen, Guangdong, China had declared the sending of a consignment of coated calcium carbonate to one of its Dhaka-based associates, ‘NB Trading House’. However, on physical examination, the authorities recovered 120 tonnes of high value Dextrose Monohydrate. The Dextrose was concealed as the label was that of coated calcium carbonate inside. The consignment originating from China had arrived (March 2022) at Chittagong port and was carried in five containers under Vashi Shipping Pvt Ltd. Had it not been detected in time it would have resulted in loss of BD Taka 42 Lakhs 13 thousand to the exchequer.
Media reports suggest that the port authorities/customs had been under pressure from senior levels not to disclose the name and real identities of Chinese companies, as China was concerned over media reports highlighting the involvement of their companies involved in tax fraud in Bangladesh. Corrupt practices by Chinese companies were further eroding their credibility.

Recently, the Bangladesh government cancelled Chinese funding for one of its railway projects and was reportedly mulling alternative funding options for other projects, including converting the existing Akhaura-Sylhet meter gauge railroad into a dual gauge and Joydebpur-Ishwardi double gauge project. Though, China projects itself as a reliable economic partner, its economic partnership is turning out to be an albatross for recipient countries.

Earlier in December 2020, the BD revenue authorities had launched an investigation into ZTE Bangladesh, a subsidiary of the Chinese ZTE Corporation with many business operations in different sectors of the country, on the suspicion of tax evasion.