Trade with China trebles in a decade
Bilateral trade between Bangladesh and China trebled to nearly $12 billion in the past decade thanks to the soaring imports by industrialists and businesses.
Trade between the two nations, which was $3.51 billion in 2008-09, rose to $12.38 billion in 2017-18.
And in the first nine months of the just concluded fiscal year trade stood at about $11 billion, with the balance heavily tilted towards China, according to data compiled by Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).
Source: Data compiled by FBCCI
The data showed that import from China has been increasing gradually while shipment to the world’s second biggest economy have been hovering below $1 billion for the last several years.
Analysts and entrepreneurs said Bangladesh gets duty-free access for nearly 5,000 items but businesses cannot take full advantage of the opportunity owing to the country’s small export basket.
“We have nothing but garments while they produce almost everything. They have little to buy from us,” said Anwar-ul Alam Chowdhury, president of the Bangladesh Chamber of Industries.
It would be very difficult to increase exports to China unless Bangladesh’s exportable products are expanded, said Chowdhury, also a former president of the Bangladesh Garment Manufacturers and Exporters Association.
Data compiled by the FBCCI showed that garment accounted for 56 percent of the total exports of $695 million to China in fiscal 2017-18.
Jute and jute goods accounted for 19 percent of total shipments that year, followed by leather and leather goods at 9 percent.
Exporters also shipped items namely frozen foods, footwear, home textile, optical photographic instruments, plastic and plastic articles, furniture and engineering products as well. These accounted for the remaining 17 percent of the exports to China.
As much as 68 percent of the imports from China were textiles, machinery and mechanical appliances.
A senior official of the commerce ministry seeking anonymity said nearly 50 percent of the products imported from China are meant for export-oriented industries to make products for the export market.
“The rest come for domestic consumption,” he said, adding that trade imbalance between two nations is rising because of a spiral in capital machinery imports.
One way to boost export is to attract Chinese investment to Bangladesh, he said, citing Vietnam and Malaysia as cases in point.
Exports by foreign investors is 52 percent of Vietnam’s export, he said.
Joint ventures between Bangladesh and Chinese investors in sectors such as electronics, engineering, textiles and other areas would be instrumental to diversifying the export basket, Chowdhury said.
He expects investment from China to increase after the completion of special economic zones and the mega infrastructure projects.
Imports from China are spiralling as it quotes a cheaper price than elsewhere, said Ali Ahmed, chief executive of the Bangladesh Foreign Trade Institute.
“On the other hand, our goods for China are very few.”