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19 August, 2017 00:00 00 AM
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PMO orders commerce ministry

Reduce trade gap with China

Bangladesh has the highest trade deficit of $ 6,881.47 million with China
JAGARAN CHAKMA
Reduce trade gap with China

The Prime Minister’s Office (PMO) has instructed the commerce minister to implement a number of effective initiatives to reduce the trade gap between Bangladesh and China. The PMO took this decision in a meeting on 'Implementation of agreement, and memorandum of understanding signed between China during visit of Chinese president Xi Jinping in Bangladesh in October 2016’, held recently at the PMO. The PMO asked the commerce ministry to continue efforts for inclusion of Bangladeshi products in the duty-free and quota-free lists for the Chinese market.

The PMO also instructed the ministry to send a proposal for a fashion design institute in Bangladesh, based on the Chinese model, with a view to boosting exports of ready made garment (RMG) items to China.

It further asked to review the free trade agreement (FTA) between China and Bangladesh as well, to continue the ongoing activities for FTA.

Asking about how to reduce the gap between China and Bangladesh, the president of Bangladesh Garments Manufacturers and Exporters Association (BGMEA), Siddiqur Rahman, told The Independent that the government should cooperate with businessmen to establish dying factories in Bangladesh and it would balance off within the next five years.

“Now we have to import 70 per cent of the wovens from China, Pakistan and India that increase the manufacturing cost. This does not help us in fighting our competitors in the global market,” he said.

"We have to capture the Chinese market. Then only the trade gap with China can be reduced," he added.

According to the statistics placed by commerce minister Tofail Ahmed in the House on June 6, Bangladesh has the highest trade deficit of US$ 6,881.47 million with China, while the second highest of US$ 3,998.16 million is with India, and the third highest of US$ 1,575.21 with Singapore.

Sources at the commerce ministry said bilateral trade between Bangladesh and China has been increasing significantly over the years, both in terms of absolute amount and percentage change among Bangladesh's top trade partners.

According to statistics from Export Promotion Bureau (EPB), the total exports of Bangladesh to China was US$ 808.14 million in FY 2015-16, which was only US$ 319.66 million in 2010-11. Thus, Bangladesh's export

to China grew at an annual average of 30 per cent in the last five years.

However, the data shows that the recent export growth has been quite slow, only 6 and 2.2 per cent in 2014-15 and 2015-16, respectively. The share of exports to China was merely 2.4 per cent of the total export in the previous fiscal year.

On the other hand, imports from China have been the highest for quite some time. The data of Bangladesh Bank shows that import from China was worth about US$ 9.8 billion in 2015-16, which was US$ 5.9 billion in 2010-11. However, the growth of import was considerably lower than export during this period, on average 13 per cent per annum.

The share of imports of China is growing quite well; from 20.7 per cent in 2013-14, it has become about 24.1 per cent of the total imports from the country in 2015-16, as per central bank data.

Together, Bangladesh’s trade with China is now about 26.5 per cent of its total trade with the world, which is the highest with a rising trend.

Bangladesh mainly imports raw materials for its textiles and clothing from China, such as cotton, yarn, fabrics, staple fibres and accessories for its readymade garments (RMG) industry, which is nearly 35 per cent of total imports.

Latest data from Bangladesh Bank shows that the country imported cotton, cotton yarn/thread, and cotton fabrics (19.6 per cent); man-made staple fibres and knitted or crocheted fabrics (10.1 per cent); man-made filaments, strips, and the like of man made textile materials (3.8 per cent); and other fabrics and apparel accessories (2.8 per cent).

Other notable import items are boilers, machinery, mechanical appliances and their parts (16.4 per cent); electrical machinery and equipment and parts (12.2 per cent); and fertiliser, plastic, chemicals, and iron and steel (13.1 per cent). Bangladesh also imports some food items from China.

On the export side, the top five items constituted about 80 per cent of total exports in 2015-16, of which 42.2 per cent is woven and knit garments. The main items are woven garments (24.5 per cent), leather products and travel items (17.9 per cent), knitwear (17.8 per cent), paper yarn and woven fabric (12.6 per cent), and raw leather (6.5 per cent). Fish and footwear are also getting prominence (8.5 per cent) in the export basket.

Bangladesh is basically sourcing raw materials and machinery for its textiles and clothing sector.

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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