As many as 97% Bangladeshi products, in a products list basket, will enjoy duty free access in the Chinese market effective from July 1. The opportunity of zero duty in the pandemic is expected to bring new opportunity for Bangladeshi exporters and businesses, say top officials in Bangladesh.
The development came following a formal approach of the Bangladeshi Foreign Ministry which has finally been approved by the State Council of the Chinese Finance Ministry, said a press statement by Bangladesh’s Foreign Ministry on Friday. However, one realizes that the Chinese helpful gesture is the direct outcome of the personal diplomacy of Prime Minister Sheikh Hasina. Some time ago the Bangladesh PM had a telephonic talk with Chinese PM and at that time it was conveyed that Bangladesh could be immensely helped by trade facilitation in these difficult times of the pandemic. It appears that China has responded quickly and sincerely to our PM’s thoughtful request.
Bangladesh’s highest import is being done from China whereas Bangladesh is still lagging behind manifolds in terms of exporting goods to China, according to the available data.According to the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI), the trade volume between China and Bangladesh was around $14.68 billion in 2018-19 fiscal year.And, of the total trade count, there was import trade of $13.86 billion and export of $831 million.
“We still import more than export from China, it will create more possibilities to minimize the trade deficit,”, anofficial at the Bangladeshi Commerce Ministry said.Also, capacity enlarging of Bangladeshi exporters and businesses are important in this regard, he added.
And, this will help the country as its economy has already been hit by the pandemic. Bangladesh on Friday reported 45 new deaths and 3,243 fresh cases, surging the total confirmed cases to 105,535 and fatalities to 1,388.Bangladesh will get the zero treatment as a Least Developed Country, and 8,256 Bangladeshi products will come under treatment as some 3,095 products are already enjoying duty free access under the Asia-Pacific Trade Agreement.
“Business will certainly see a big jump with the latest 97% duty free access to these products,” a DG for East Asia and Asia-Pacific in the Bangladeshi Foreign Ministry said. He added: “Definitely, it’s a good sign in pandemic. And we for a long time were examining the access and working with that country, and will work to nourish the bilateral relationship.”
China is considering the option of outsourcing textile jobs to Bangladesh where labour is available at half the cost. Chinese producers might also consider moving operation to Bangladesh. It has already emerged as the third largest trading partner of China in South Asia. In the last five years, imports from China grew at about 20 per cent and exports growth averaged at 40 per cent. A back-of-the-envelope calculation, considering a moderate exports and imports growth scenario, indicates that China-Bangladesh trade could reach US$ 30 billionfairly quickly.
Some years ago China granted Bangladesh 150 million RMB (US$ 23.8 million) in order to meet the latter’s needs for setting up vital economic and technical cooperation projects, in collaboration with China. Additionally, 860 million RMB (US$ 133 million) has been provided by China in the form of a soft loan for the setting up of a Bangladeshi project, aimed at bringing all government offices across the country under one network. This project has been titled Development of National ICT Infra-Network for Bangladesh Government . According to a statement released by the Economic Relations Division (ERD) under the Ministry of Finance, once this project is implemented, it will be possible to bring all government offices at district and sub-district levels under one network. This is also being seen as a stepping stone towards the implementation of current government’s Vision 2021.
Connectivity is essential to enhance mutual cooperation. In this regard, China and Bangladesh have been negotiating a highway project to connect Chittagong and Kunming through Myanmar. This highway would give Bangladesh an entry into the Mekong sub-region, which already includes China, accelerate trade and facilitate people-to-people contact. Bangladesh can play a major role in China’s plan for reinforcing their trade routes, the Belt and Road initiative. A network of ports has been established by China, called the 21st Century Maritime Silk Road that extends from Chinese coasts through Southeast Asia, the Indian Ocean, and the east coast of Africa and through the Mediterranean to Greece. The Chinese Government has taken up the One Belt, One Road initiative to revive the ancient Silk Road connecting the country with Central Asia, Europe, Africa, Middle East, Southeast Asia and South Asia. China has invested US$ 40 billion in the Silk Road infrastructure fund.
