Bangladesh Struggles To Capitalize On China’s Zero-Duty Trade Benefits
Bangladesh has been unable to fully leverage the zero-duty trade benefits offered by China, largely due to a lack of product diversification. While imports from China have steadily risen, Bangladesh’s exports to its largest trading partner remain modest, failing to surpass the $1-billion mark.
This imbalance highlights Dhaka’s increasing reliance on a single sourcing destination, especially for textile raw materials such as yarn and fabrics, which constitute over 40% of its imports from China. Capital machinery accounts for another 24%, along with cotton and other essential goods.
In contrast, Bangladesh’s exports to China are primarily garments. However, prospects for growth in this area are limited, as China itself is the world’s largest apparel exporter and imports only about $10 billion worth of garments annually.
This makes it difficult for Bangladesh to expand its market share without diversifying its product offerings.
Industry experts suggest that Bangladesh should work to attract Chinese entrepreneurs to relocate their factories to the country. Additionally, efforts should be made to encourage large Chinese banks to establish branches in Bangladesh to boost financing and foreign currency supply.
At present, Chinese investment in Bangladesh is mainly concentrated in infrastructure projects, with limited engagement in the manufacturing sector.
