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It is the ‘Made in Bangladesh’ era now

  • Published at 09:51 pm June 8th, 2019
It is the ‘Made in Bangladesh’ era now
Workers at a Chinese-run factory in Bangladesh produce 12 million toys a year Collected
  • Soaring wages at home have seen many Chinese firms set up shop in Bangladesh, boosting its economic growth, expected at 8% this year
  • But while there has been a backlash against Chinese investments and workers in the Philippines and Indonesia, Dhaka is more welcoming

When Chinese businessman Leo Zhuang Lifeng arrived in Dhaka 22 years ago, only one of the two luggage conveyor belts in the airport was functioning. The lighting was not working properly, either.

The rundown airport in the capital of Bangladesh prepared many Chinese and foreign businessmen for what they were about to experience in the country, which was still an economic backwater at the time, with frequent power outages and inadequate infrastructure, according to a South China Morning Post report.

Zhuang, now 51, landed in Dhaka in 1997 to set up garment factories there, taking advantage of the low labour costs and abundant supply of workers.

“Back then, there was a lack of daily commodities. It was not even easy to buy instant noodles,” said Zhuang, managing director of the LDC Group, which now employs about 20,000 workers in the country. “But Bangladesh has gone through tremendous changes over the years, though of course you cannot compare those changes to what China has experienced.”

His factory compounds were so big they resembled villages on their own. There were medical centres providing free consultation for staff and their family members, as well as day-care centres for their children.

Such compounds are now everywhere in Bangladesh, as Chinese and other foreign investors have kept coming. This investment has transformed the country into a manufacturing powerhouse with 3.5 million labourers making clothing for local and international brands such as Uniqlo and H&M. Luxury brands such as Michael Kors also have some products made in Bangladesh.

As wages soar in China, more clothing is expected to carry the tag “Made in Bangladesh” rather than “Made in China” in the years to come.

Zhuang, now the president of the Overseas Chinese Association in Bangladesh, estimated there were only 20 to 30 Chinese companies in Bangladesh 22 years ago. By his estimate, that number has since grown to roughly 400 in the relatively young South Asian country, which gained independence from Pakistan in 1971.

Chinese loans have boosted Bangladesh’s economic growth. For about a decade, it grew at an average of 6 per cent, but is expected to hit 8.13% this year, making the country one of the fastest-growing economies in the world.

From China to Bangladesh

Despite its rapid economic growth, Dhaka remains different from other Asian capitals such as Jakarta, Manila and Phnom Penh. Its infrastructure, including highways, is lacking; during peak hours, there is so much traffic that it can take three frustrating hours to navigate a distance of 50km.

But Bangladesh’s ample room for development is precisely why it has drawn so many investors. Among them is Hong Kong businessman Felix Chang Yoe-chong, chairman of the Hong Kong-listed Evergreen Products Group, one of the largest wig manufacturers in the world. Since moving his factories from mainland China to Bangladesh, he now has 18,000 workers who produce 300,000 to 400,000 wigs a month in the Uttara Export Processing Zone, an hour’s flight from Dhaka.

Some 20 companies, among them about six from Hong Kong, have set up factories in the 213-acre zone. There are eight such zones across Bangladesh, allowing companies to import materials needed to make their products at a reduced or zero tax rate. This concessionary tax policy applies to their exports as well.

The minimum wage in Bangladesh currently is $95 a month, which is still lower than those in other Asian countries. It is $182 a month in Cambodia; $180 a month in Hanoi and Ho Chi Minh City, though lower in other Vietnamese cities; and $3.60 per day in Myanmar.

During Chang’s first few years in the country, there was no flight from Dhaka to where his factories were located. Even though there was an airport, it was not open because hardly anyone was using it. It meant that every time he had to go to his factories, he had to travel over land for nine to 12 hours, depending on traffic conditions.

“The advantage of doing business in Bangladesh is that the wage is low. The downside is that shipping takes a long time. But for me, a solution is to have more wig materials stored in the factories,” he remarked.

Hongkonger David Lam Ming-heung, general manager of an eyeglass manufacturer in the same export zone, understands the logistics troubles all too well.

“Bangladesh right now is like China when China was first opening up [in the 1970s],” said Lam, 53, who oversees 3,700 workers in the factory. “Bangladesh is using the China model to grow its economy.”

Home away from home

Some 2,300km from his home province of Hunan, Thomas Zou Haibo is a shadow of his former self. Since the assistant manager of a handbag factory started working in the Uttara zone seven years ago, his weight dropped from 90kg to just 70kg.

“I was one of the seven people who were sent here by my company seven years ago. When I first came, there was only 2G internet here and we could not get any Chinese television channels. There was no entertainment. It was just work every day,” said Zou, 33.

The hundreds of Chinese working in the companies in the export zone were close knit. Many of them lived in the same buildings, sharing meals and singing karaoke in their flats over the weekend. That was the closest to a Chinatown in the zone.

“After all these years working here, I have developed a sense of belonging with the people here,” Zou said. “But I do miss home. That’s why I go home two to three times a year.”

David Zhao Zhiwen, manager of a toy factory in the zone, misses his two children. He oversees 4,200 workers who make 12 million toy models a year. His day starts at 7am and ends 12 hours later; he supervises every procedure, from the melting of metals to the moulding of the toys.

There are about 100 Chinese employees at Zhao’s factory, mostly managers and technicians. “We need Chinese here to teach and pass on our techniques to the Bangladeshi workers,” he said.

Farhan Haq, a law lecturer at the Central Women’s University in Dhaka, said: “Infrastructure is being built in the country. A lot of Chinese are here, investors and workers. They have created a lot of opportunities for the locals. We are not concerned. We are happy. They are helping the economy.”

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