We must assess failure to fully utilise zero-duty trade benefits from China
Bangladesh's failure to fully utilise the zero-duty trade benefits it enjoys from China is quite disappointing. Despite gaining this duty holiday in 2020, we have not been able to increase our exports to China compared to our imports from the country of 1.4 billion people. Initially, duty-free access to Chinese markets was offered to 8,547 Bangladeshi products; later, 100 percent duty-free access was given to all products from Bangladesh. Yet, during the July-December period of the current fiscal year, Bangladesh only exported $0.46 billion worth of goods to China while importing $8.89 billion worth of goods. In the last six fiscal years, trade differences with China, in fact, went up.
In the past, we received zero-tariff benefits from India. There too, we failed to take full advantage of the benefit, and our trade imbalance with the country remained high. Both these instances point to our lack of productivity, failure to increase industrial capacity, and inability to attract investment in our export-oriented businesses (other than ready-made garments). Interestingly, Bangladesh's main export to China is garments, even though China itself is the world's largest apparel exporter. According to a report in this daily, Bangladesh does not have much scope to increase apparel exports to China beyond what is currently being done. This shows a lack of vision regarding product diversification, with the export sector largely remaining stuck in RMG.
Experts told this daily that we should have pursued Chinese investments in products such as man-made fibre, leather, leather goods, solar panels, semiconductors, and microchips, which could be exported back to China. However, our policies often lack comprehensive implementation plans. Moreover, corruption and negligence often derail implementation. Inconsistent policies, high energy prices, and lack of political stability also drive away foreign investors.
As Chief Adviser Prof Muhammad Yunus is set to visit China, we must assess our performance in taking comprehensive steps to increase our export basket and attract Chinese investment. US President Donald Trump's trade war against several countries, including China, has opened some doors of opportunity for Bangladesh. Chinese investors are showing interest, and we must hit the iron while it's hot. We cannot let this opportunity slip because of our internal problems, low productivity, and lack of political consensus needed for urgent reforms that can support a trade-conducive and investment-friendly environment.
