The tides are turning for Bangladesh, as China proved itself vital to the former's economic prosperity and emerged as the top trading partner of Bangladesh in May once again in an official ranking.
Local industry and trade experts feel the uptrend in Bangladesh-China trade would continue in the years to come as the products of China are cheaper and vastly diversified.
While China remains Bangladesh's leading trade partner, Bangladesh is China's third largest trading partner and third largest engineering contracting market in South Asia.
According to the BBS statistics, the bilateral trade in May last stood at Tk180,000 crore.
China also had nearly 17% share in the country's total trade.
During the period, in Bangladesh's two-way commerce with China, Bangladesh exported merchandise worth Tk33,500 crore while its goods import cost Tk177,000 crore.
At present, the businesses involved by Chinese companies in Bangladesh mainly include trade, investment, and engineering contracting.
Bangladesh imports all major items from China, ranging from industrial raw materials to consumer goods.
According to the Bangladesh Bank, Bangladesh's total imports from China in FY21 amounted to about $13 billion, which is one-fourth of the country's import expenditure.
At the same time, it exported $681 million worth of goods, up by 13.42% over the preceding year.
According to the notice of Tariff Commission of the State Council of China on June 16, 2020, zero tariff is applicable to 8256 products originating from Bangladesh (among the total 8549 products).
Earlier under the purview of the World Trade Organization (WTO) provisions, China offered the trade concession to the least developed countries (LDCs) in July, 2010 and Bangladesh used to enjoy the facility for products on 60% of its tariff lines.
The trade concessions would continue until Bangladesh officially graduates to a developing country status in 2026.
However, Bangladesh will continue to enjoy preferential market access to China under the Asia-Pacific Trade Agreement or APTA, which covers 3,700 HS Codes.
Among the important items of Bangladesh's export to China are textile accessories, rawhide, footwear, cotton waste, iron and steel waste, wood charcoal, fish and fisheries products, plastic articles, and copper articles.
Leading chamber- body Metropolitan Chamber of Commerce and Industry (MCCI) recently urged the Bangladesh Bank to introduce the Chinese Yuan (RMB) as the second currency to reduce dependence on the dollar.
The MCCI suggested taking recourse to RMB (Renminbi) instead of dollars in international trading as Bangladesh imports most from the Chinese market.
Following such growing reliance on China, many shipping lines now operate direct shipping services between the two countries although Bangladesh's shipments to the second-biggest economy remained meager.
Currently, four international shipping lines have direct shipping linkage, including the biggest container liner, Maersk Line.
Shahidullah Azim, vice president of the BGMEA told Dhaka Tribune that a number manufacturers from Bangladesh export products to China.
Exports to China are increasing day by day as China is gradually withdrawing them from the textile sector and the share of Bangladesh in China is growing, he also said, adding that they were eyeing the Chinese market.
"East Asian countries like China and Japan can be the new big market for our clothes. We are working on this," he added.
Challenges
The Bangladesh mission in China in May earlier this year identified different reasons and barriers to exports included shortage of products as compared to China's demand, obligation to supply goods in accordance with the standards set by China, lack of aggressive marketing and deficit of Bangladeshi branded products.
It has also mentioned that language barrier and lack of ideas about the Chinese market have also been hindering the export growth.
The mission, however, suggested going for aggressive marketing, creating brand image online and onsite, and increasing business-to-business (B2B) connectivity to boost the exports to the Chinese market.
It also recommended improving images of big Bangladeshi brands by opening their outlets there for promotion, marketing, advertising, cultural exchange, etc.
The Bangladesh traders have not entered into China due to their zero-Covid policy that too affected the trade communication, the mission report mentioned.
It also pointed out that the exports to China during the pandemic did not register expected outcome as the Bangladeshi enterprises lag behind in online business.
However, the mission report noted that exports were in an upward trend in the last eight months of FY22.
Saddam Hossain also contributed to this report
