China to expand duty benefits for Bangladesh
China plans to extend duty-free benefits to 17 more products from Bangladesh, including leather goods and tobacco, in an effort to deepen trade relations between the two countries, officials said yesterday.
China has long been providing duty-free benefits to 4,700 products, mostly garments from Bangladesh. The new duty-free list includes some additional garment products.
“Beijing has agreed in principle to widen its trade benefits,” said Mohammad Mejbahuddin, senior secretary of the Economic Relations Division.
Mejbahuddin made the comments at the end of the 14th session of the biannual Bangladesh-China Joint Economic Commission at the ERD.
Gao Yan, vice-minister for commerce of China, led the Chinese delegation, while Mejbahuddin led the Bangladesh side. Representatives from China's commerce ministry and Eximbank were also present.
The delegation has requested Bangladesh to start the procedures so that the benefits can be reaped at the earliest, he added.
The meeting also discussed 13 projects that are being implemented with soft loans from China. Beijing is providing about $10 billion low-cost loans for the projects.
The two sides will have to sign commercial contracts for the projects before signing the loan agreements. The discussion over the commercial contracts is underway.
The projects include Karnaphuli Tunnel involving $705 million; surface water treatment plant ($500 million); installation of single point mooring with double pipeline ($500 million).
The $2.57 billion Padma bridge rail; $1.39 billion Dhaka-Ashulia Elevated Expressway; and power system network expansion involving $2.04 billion are the other projects.
The two sides may sign agreements for five or six projects very soon, said Mejbahuddin. “There is no problem in executing these projects. But China has asked Bangladesh to quicken implementation.”
The commission normally sits for a meeting every alternate year, but the meeting decided that the officials of the Chinese Embassy in Dhaka, the ERD and the line ministries would sit every three months to review the progress of the projects. China also expressed interest to invest directly in projects as equity partner rather than giving only concessional loans, Mejbahuddin said.
The meeting also discussed China's investment scope in Bangladesh, and was told that Chinese businesses will be given a dedicated special economic zone.
The delegation said they are eager to invest in Bangladesh but emphasised improving the investment climate in areas such as land acquisition, energy supply and effective one-stop service.
In response, Mejbahuddin assured the delegation that the government would extend all necessary assistance to facilitate China's investment plans for Bangladesh. China has expressed interest in investing in the apparel zone that is being set up by Bangladesh Garments Manufacturers and Exporters Associa-tion in Munshiganj, he said.
China will also provide 1,000 motorcycles for use by the Fire Service and Civil Defence Directorate. The two countries signed an agreement at the ERD.
The motorcycles are capable of manoeuvring on narrow roads of the cities and controlling fire effectively such that casualties are reduced significantly, the ERD said in a statement.
Bangladesh's deepening of footprints into the Chinese apparel market could bode well for local exporters as they seek to capture a major share of the domestic market of the world's second largest economy. China will surpass the United States and become the world's largest apparel market by 2019, according a forecast of the Euromonitor.
It said the annual apparel sales in China will reach $333 billion in 2019, an increase of 25 percent from $267 billion in 2014. At present, China's apparel market size is $300 billion a year, according to the China National Garment Association. Some $341.22 million of garment items were shipped to China from Bangladesh in fiscal 2015-16, an increase of 11.9 percent from a year earlier.
The 15th meeting of the commission will be held in China in 2018.
The core objective of the Joint Commission was to explore possibilities of enhancing cooperation in bilateral trade and investment.