Bangladesh has hardly been able to utilise the generous zero-duty trade benefits offered by China due to a lack of product diversity, whereas Chinese imports have steadily risen, given the country's increasing reliance on a single sourcing destination.
China has been the single largest trading partner for Bangladesh for many years, but imports from the country have far outweighed exports, with shipments from Bangladesh failing to cross even the one-billion-dollar mark.
In the July-December period of the current fiscal year, Bangladesh imported goods worth $8.89 billion and exported goods worth $461.05 million, according to data from the Bangladesh Bank (BB) and Export Promotion Bureau (EPB).
In the previous fiscal, the total import value from China was $16.63 billion whereas exports amounted to just $715.37 million.
According to economists and business leaders, during Chief Adviser Professor Muhammad Yunus' upcoming visit to China, Bangladesh should hold negotiations to attract more Chinese investment in Bangladesh and minimise the trade gap.
A major factor behind the rise in imports is the fact that Bangladesh relies heavily on China for textile articles such as yarn and fabrics, especially man-made fibres and fabrics, which account for over 40 percent of total Chinese imports by Bangladesh.
Capital machinery makes up nearly a quarter of imports, accounting for 24 percent. Other imports include cotton, food items and other materials.
On the other hand, Bangladesh's main export items to China are garments although China itself is the largest apparel exporter in the world, boasting a global market share of over 31 percent.
The Chinese garment sector, which includes goods for export purposes and domestic consumption, is worth around $750 billion. Of that, China's domestic consumption is nearly $350 billion.
However, China annually imports merely $10 billion worth of garment items from all over the world. So, Bangladesh's opportunity to export more to China is very low, especially as the country lacks a range of diversified products.
"We need to bring more Chinese investment in export-oriented sectors here, especially in the man-made fibre sector. This way, goods produced here can be exported to China and help reduce the trade gap between the two countries," said Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID).
Efforts should also be made to try and allure Chinese entrepreneurs to relocate their factories to Bangladesh as there are ample opportunities for investment, not only in man-made fibres but also in sectors such as leather and leather goods, solar panels, semiconductors and microchips, Razzaque added.
Currently, Chinese investment in Bangladesh is mainly confined to infrastructure projects, he said, suggesting a regular joint trade and investment fair to promote business between the two countries.
He also suggested that ongoing negotiations to sign a free trade agreement (FTA) between Bangladesh and China be reframed as a free trade and investment agreement.
EPB Vice-Chairman Anwar Hossain said a lot of Chinese entrepreneurs have been inquiring about investing in Bangladesh after Donald Trump came to power in the US and hiked duties on Chinese shipments to 35 percent.
Moreover, Chinese importers are showing a lot of interest in importing more jackfruits, mangoes, guavas and hilsa fish from Bangladesh, which would help diversification, said Hossain, who is also the administrator of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
Showkat Aziz Russell, president of the Bangladesh Textile Mills Association (BTMA), requested the relocation of Chinese factories to Bangladesh, especially in sectors such as textiles, garments, shoes and leather.
Moreover, Bangladesh should lobby to get large Chinese banks to open branches in Bangladesh, which would bolster financing and the supply of foreign currencies, he added.
An official of the Chinese Entrepreneurs Association in Bangladesh (CEAB) said the platform has more than 1,000 registered members, with most companies invested in garments and textiles enterprises in export processing zones.
Mohd Khorshed Alam, the immediate past president of the Bangladesh China Chambers of Commerce and Industry (BCCCI), blamed the lack of export diversity for lower shipments to China.
A lot of Chinese entrepreneurs come here but feel discouraged to invest when they hear about abnormal price hikes for energy and political unrest, he added.
However, a nearly $5 billion Chinese investment plan may be unveiled during the chief adviser's visit to China as many are sending inquiries for investment in Bangladesh, he added.
