Bangladesh's exports to China, the world's second biggest economy, will grow to $25 billion if local suppliers can grab an additional 1 per cent share of the Chinese market by 2030, according to a study released yesterday.
Currently, Bangladesh's share of exports to the Chinese market is 0.05 per cent, equivalent to a bit above $1 billion in a year, it said.
Bangladesh has the opportunity to increase its exports to China as since July last year, the Chinese government approved duty-free facility for 97 per cent of products from Bangladesh, which is a big advantage for the country, it added.
Some 8,256 products enjoy duty-free facility from Bangladesh to China as the country falls under the least developed country (LDC) category, said MA Razzaque, research director of Policy Research Institute (PRI).
He was presenting a keynote paper at a webinar on "Bangladesh-China Economic and Trade Relations in the aftermath of the Covid-19 Global Pandemic", jointly organised by Economic Reporters' Forum (ERF) and Bangladesh China Chamber of Commerce and Industry (BCCCI).
Razzaque also advocated for attracting Chinese investment in different export projects in Bangladesh. "We need to materialise investment pledges from China," he said.
China's economy remains robust, its trade is fast recovering and it is one of the largest sources of foreign direct investment (FDI). The significance of Bangladesh's export to China becomes clear if some trade data is analysed, he said.
For instance, prior to the Covid-19 pandemic, China's exports of goods and services were $2.69 trillion and imports were $2.48 trillion. "Future growth of China will make its imports volume even bigger," Razzaque also said.
Bangladesh should also negotiate to bring in Chinese investment pledges worth more than $27 billion. Currently, Chinese investment in Bangladesh is $2 billion and the Chinese companies have been implementing different mega projects in the country, he said.
After Bangladesh makes the United Nations status graduation to a developing country, it will need a lot of FDI and China might be a major source for investment, he said.
Negotiations are underway for a free trade agreement (FTA) to be signed between Bangladesh and China, said Commerce Minister Tipu Munshi.
Last fiscal year, bilateral trade amounted to $12 billion, of which over $11 billion were goods imported from China.
China is the largest source of imports for Bangladesh and in pre-pandemic times, Bangladesh used to import goods worth more than $18 billion from the country.
Li Jiming, Chinese ambassador to Bangladesh, said it was high time to consider the signing of an FTA as bilateral trade was growing alongside Chinese investment in Bangladesh.
Bilateral trade decreased by 30.6 per cent year-on-year in 2020 because of the Covid-19 pandemic, the ambassador added.
A discussion is underway for joint production of Chinese Covid-19 vaccines in Bangladesh, said Li Jiming, recalling Bangladesh's medical support to China last year.
China has shown a resilient recovery from the fallouts of Covid-19, said Mahbub Uz Zaman, Bangladesh's ambassador to China.
In 2019, bilateral trade was $18.5 billion. In pre-pandemic times, it annually grew by 24 per cent, he said.
Since China is the largest raw material supplier for the industries in Bangladesh, so the trade balance is heavily tilted towards China, he added.
BCCCI President Gazi Golam Murtoza chaired the discussion, moderated by ERF General Secretary SM Rashidul Islam.
Sharmeen Rinvy, president of the ERF; Md Sirazul Islam, executive chairman of the Bangladesh Investment Development Authority; and Al Mamun Mridha, general secretary of the BCCI, were also present.