The Chinese offer, currently awaiting final approval from the Bangladesh regulator, is part of the broader contest between Beijing and New Delhi in the region’s smaller countries, from Nepal to Myanmar. Beijing had already invested heavily in the region’s hard infrastructure. But as China seeks closer economic ties as part of its “Belt and Road Initiative” – a vast network of ports, railways, roads and infrastructure – its state-owned bourses have also been investing in foreign exchanges.

“China is implementing a long-term strategy of quiet encirclement of all potential rivals in Asia,” said Husain Haqqani, South and Central Asia director at the Hudson Institute in Washington, and Pakistan’s former ambassador to the US. “That strategy includes seeking economic pre-eminence in South Asian countries and the bids for bourses is part of that plan,” he added.

The Shenzhen bid was roughly US$120 million, compared to NSE’s US$82 million. But the Chinese deal also offered to help Dhaka with training, technical assistance, technological upgrades and secondments. The Chinese would also help the exchange diversify into bonds, asset-backed securities and derivatives, while offering seminars on regulatory issues.

Separately, Bangladesh Prime Minister Sheikh Hasina told Indian journalists on Tuesday that their nation should not worry about Chinese investment in her country. “We want investment and cooperation from whoever offers it,” she said, according to the Press Trust of India.

The Dhaka bourse bid was not China’s first. Along with its 40 per cent stake in the Pakistan Stock Exchange, the Shenzhen Stock Exchange has also held talks about investing in the Philippine Stock Exchange, Ramon Monzon, the latter’s chief executive, said in October.

“The stock exchanges in China are all state-owned,” said Hu Xingdou, an economics professor at the Beijing Institute of Technology. “They represent the growing financial power of China, and this potential acquisition shows the mounting financial influence of China on belt and road countries.”

China’s foreign ministry did not respond to an emailed request for comment. The Shenzhen Stock Exchange did not return phone calls seeking comment. 

Beijing has already planned investments worth more than US$50 billion in the China-Pakistan Economic Corridor projects and built a port at Sri Lanka’s Hambantota. 

President Xi Jinping visited Bangladesh in 2016 and announced US$20 billion in low-cost loans, mostly for infrastructure. India has tried to push back, offering billions in lines of credit and infrastructure assistance to Bangladesh, while funding projects in Myanmar.

“Bangladesh is walking through a geopolitical minefield,” said Ahsan Mansur, executive director of the Dhaka-based Policy Research Institute. “It’s always a balancing act while dealing with China and India.”

Buying up bourses extends China’s influence from physical to financial infrastructure and could eventually lead to China impacting global norms, said Shailesh Kumar, Asia director at Eurasia Group, a political risk consultancy. Over time, “transparency could be affected” on these exchanges, particularly if “standards for listing are diluted”, he said.

“While till now many expected both to seek influence to own hard assets, the Dhaka Stock Exchange situation showcases that China really is interested in broad-based influence and access,” Kumar said. “Beyond roads and ports, China shows it’s interested in dominating all aspects of South Asia by exporting its philosophy and means of doing business.”