Economic Desk:
Economists and businessmen have commented that Chief Advisor Dr. Muhammad Yunus’s China visit will open a new chapter in Dhaka-Beijing relations in terms of bilateral trade and investment. However, they believe that Bangladesh will have to prepare to utilize this opportunity.
Chief Advisor to the interim government Dr. Muhammad Yunus went to China on a four-day state visit in the last week of March. During this time, he attended the annual conference of the Boao Forum for Asia and met with Chinese President Xi Jinping.
An agreement and several memorandums of understanding were signed between the two countries during the visit. The heads of government of the two countries expressed their determination to take the relations of the two countries to new heights, including increasing investment and expanding bilateral trade.
Businessmen and economists of the country spoke about the success and achievements of Dr. Yunus’s visit. They emphasized on taking necessary initiatives to utilize the hopes generated by the visit.
Hope for further progress of the garment industry
BKMEA President Mohammad Hatem told Media, “We see the Chief Advisor’s visit to China as positive. We are also very optimistic about its success. The way the Chinese government has come forward positively to improve relations is very good for us.”
He said, ‘China is our largest trading partner. We have various types of cooperation from them. It is also the largest market for importing raw materials. Investment is moving away from China. We are looking forward to investment. The Chinese government will encourage their businessmen to invest here. We see this as a big achievement for us.’
The business leader also said, ‘Based on this relationship, the trade relations between Bangladesh and China will further improve, which will play a huge role in the field of industry, trade and commerce. We hope that investment will come to our ready-made garment industry, especially in the synthetic fiber and technology-based sectors, and our sector will move forward further.’
Encouraging investment is a big opportunity
Professor Mostafizur Rahman, Honorary Fellow of the Center for Policy Dialogue (CPD), said, ‘Many issues were discussed during this visit to further deepen the trade relations between Bangladesh and China. Notable among these are market expansion, attracting new investments, increasing new loans and financial cooperation, etc. Chinese President Xi Jinping has encouraged his country’s investors to invest in Bangladesh. This is a big opportunity for us.’
The economist said, ‘The sooner we can provide them with business opportunities, the sooner they will come here. There are different sectors to invest in Bangladesh. Not just one special region, we need to provide them with opportunities to invest in different special economic zones.’
The sooner we can provide them with business opportunities, the sooner they will come here. There are different sectors to invest in Bangladesh. Not just one special region, we need to provide them with opportunities to invest in different special economic zones. – CPD Honorary Fellow Professor Mostafizur Rahman
He said, ‘If this happens, we will be able to attract Chinese investment. At the same time, we need to further improve our reforms and business environment, so that Chinese investment comes here and by utilizing that, we can create employment and increase our exports.’
We need to think about the opportunities for Chinese investors. Economist Mashrur Riaz, chairman of the research institute Policy Exchange, said, ‘Dr. Yunus’ visit to China and the bilateral meeting are encouraging. It is important for Bangladesh to meet such a major economic and diplomatic superpower. This visit will play a helpful role in advancing the relations between the two countries.
Noting that China and Bangladesh have a good bilateral trade relationship, he said, “This visit will deepen it further. An agreement on technical and economic cooperation was signed during the visit. I think this is also a welcome step. It will be considered an initiative to utilize the opportunities that exist to further enhance economic relations between the two countries.”
Riyaz said, “Various issues were discussed in the bilateral meeting. One of them is to accelerate the pace of work on the Chinese Economic Zone. On the other hand, at least 30 Chinese investors have expressed interest in coming to Bangladesh, which is a big ray of hope for us.”
Regarding investment, he said, “Expressing interest of investors does not mean that they will definitely come. Their coming will depend on what kind of facilities we can provide for them. And how conducive the business environment will be for them. We should improve the business environment and provide them with facilities to do business smoothly. Then Chinese investment will come here.”
Mashrur Riaz said, “Another important thing is that China has said to consider reducing the interest rate on our current debt, which is very good for Bangladesh. In this case, we have to achieve this through new initiatives and discussions so that we can utilize this consideration.” China has expressed interest in signing a free trade agreement (FTA) with us, he said, “This is very important. Because, we will not have GSP benefits in the future. In this case, we have to keep in mind that it is not enough to just do FTA, we are already getting duty free benefits but we are not able to utilize its benefits. We have to prepare to utilize it. Otherwise, we will not be able to benefit.”
Policy should not change with the government
Apart from improving the environment, businessman Fahim Mashrur believes that political commitment is needed. He said, “There are many opportunities to increase business with China. I see this visit positively.”
He said, “China has shown interest in various issues. We should utilize these interests to genuinely attract investment and deepen trade relations. To take China’s investment and trade relations forward, political parties must ensure that no matter which government comes, they will not change the policy and will maintain continuity in the interests of both countries.”
Bilateral trade
According to data from Bangladesh Bank (BB) and Export Promotion Bureau (EPB), Bangladesh imported goods worth $8.89 billion and exported goods worth $461 million to China during the July-December period of the current fiscal year. In the last fiscal year, the total import value from China was $16.64 billion, while the export value was only $715 million.
According to Bangladesh Bank data, bilateral trade between Bangladesh and China was $18.54 billion in the 2022-23 fiscal year. Bangladesh’s exports to China were $67.73 billion against imports of $17.8266 billion. The trade deficit was $17.15 billion. In the 2008-09 fiscal year, Bangladesh imported $3.4175 billion worth of goods from China. Bangladesh’s exports to China were about $100 million.
Bangladesh imports the most cotton from China. Bangladesh imported $2.25 billion worth of cotton in the 2022-23 fiscal year. The second highest import was nuclear reactors and boilers – worth $2.15 billion. Electronics and electrical equipment were imported worth $1.72 billion.
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