DHAKA, June 9, 2021 (BSS) – Speakers at a virtual discussion today put utmost importance on signing a comprehensive bilateral Free Trade Agreement (FTA) with China as it would have a positive impact on Bangladesh’s exports to Chinese market.
They also underscored the need for taking full advantage of duty free quota free (DFQF) access of Bangladeshi products to Chinese market.
They came up with the views at a BCCCI-ERF Virtual Discussion on “Bangladesh-China Economic and Trade Relations in the aftermath of the COVID-19 Global Pandemic” organized jointly by Economic Reporters’ Forum (ERF) and Bangladesh China Chamber of Commerce & Industry (BCCCI).
Commerce Minister Tipu Munshi attended the event as the chief guest while Chinese Ambassador to Dhaka Li Jiming, Executive Chairman of Bangladesh Investment Development Authority (BIDA) Md. Sirazul Islam, Bangladesh Ambassador to China, Mahbub Uz Zaman joined it as the special guests.
Eminent Trade Economist Dr. Mohammad Abdur Razzaque presented the keynote paper while ERF President Sharmeen Rinvy and Joint Secretary General BCCCI, Al Mamun Mridha delivered welcome remarks.
BCCCI President Gazi Golam Murtoza chaired the event while ERF General Secretary, S M Rashidul Islam moderated the function.
Senior Vice President, BCCCI Brig. Gen. Shah Md. Sultan Uddin Iqbal offered the vote of thanks.
Commerce Minister Tipu Munshi said, “Although some progress have been made for signing an FTA with China, but still we need to put a lot of efforts to conclude the negotiation and materialize the prospect of the FTA. I believe this will help Bangladesh to face the LDC graduation challenges.”
He said the trade balance of between the two countries is now heavily in favour of China as out of around $12.09 billion bilateral trade in FY20, Bangladesh’s export to China only accounted for $0.60 billion while imports from China totaled a mammoth $11.49 billion.
Tipu said as part of its unilateral market access schemes for LDCs, China has allowed duty-free access to Bangladesh for 97 per cent of its tariff lines which became effective from July 1, 2020. Under this initiative, 8,256 Bangladeshi products enjoy zero tariff facility for exports in this market. “I strongly believe that by fully utilizing this DFQF facility, the trade imbalance can be reduced in a greater extent,”
The Commerce Minister said Bangladesh gives utmost priority to its relations with neighboring and regional friendly countries like China while the relationship between the two countries has developed robust based on mutual trust and interests.
Mentioning that trade is the lifeline and also central to the government’s vision to move towards the rank of an advanced developing nation, Tipu said that the Ministry of Commerce would continue to support and encourage the private sector and also spearhead the industrial development of the country.
The Commerce Minister also mentioned some of the ongoing projects with Chinese support which are the Padma Multipurpose Bridge Project, Karnafuli Tunnel, Dhaka-Chittagong Highway Four Lane Upgradation, Payra Port Development, Chittagong-Cox’s Bazar Railway Project, Power Grid Network Strengthening Project, Dhaka-Ashulia Elevated Expressway, Dhaka-Sylhet Four Lane Highway etc.
Touching upon the vital COVID-19 vaccine issue, Chinese Ambassador to Dhaka Li Jiming said that despite the huge domestic demand, China has tried its best to supply vaccines to Bangladesh as Dhaka has already received some 500,000 doses of vaccines from Beijing as gift.
Besides, he informed that 600,000 lakh doses of more vaccines are likely to arrive in Dhaka by June 13.
The Chinese Ambassador said a “very pragmatic” discussion is going on procurement of COVID-19 vaccine doses from China to meet Bangladesh’s needs.
He also said there is a very “encouraging progress” between the two countries over joint production or coproduction of vaccines.
Turning to the issue of signing FTA, he said that it high time to really consider an FTA combined with an Investment deal between China and Bangladesh and this poses a huge potential for Bangladesh to boost its exports to China.
Regarding the COVID-19 related support, Ambassador Li said China would never forget when Prime Minister Sheikh Hasina showed solidarity with Chinese people by sending badly needed medical supplies to China when it was the most challenging time with the outbreak of the pandemic in China.
In response, China also provided even more medical supplies to Bangladesh during the pandemic situation, he added.
Li said that both the entrepreneurs and businesses of China and Bangladesh suffered from the pandemic as the bilateral trade witnessed a fall of 13.6 percent in 2020 from the last year.
He, however, termed attainment of Bangladesh’s 6.1 percent GDP growth in the outgoing fiscal year as “very encouraging”.
The Chinese ambassador said although there is a huge trade imbalance, but there would be more exports from Bangladesh to China in the coming days.
He hoped that with the implementation of 97 percent zero tariff or duty free and quota free access of 8,256 Bangladeshi products to China, the bilateral trade relations would get a momentum again through a rapid recovery.
Li said he was fully confident that under the Chinese Belt and Road initiative, there would be more areas of cooperation in different fields like in 5G communication, high-speed railway as well as the G to G and PPP initiatives would get momentum in the post pandemic era.
BIDA Executive Chairman Md Sirazul Islam said that the Authority would facilitate and expedite Investment from Chinese investors.
“We want to see more FDI from China. BIDA is always ready to support Investment promotion and policy advocacy.”
He opined that it would be a real game changer if Bangladesh could tap the potential Chinese market. “If we can explore even 1% potential of Chinese market, then the exports of Bangladesh to China will total $25 billion.”
Sirazul said the Chinese investors could take the opportunity to invest in Bangladesh and thus export to China.
The BIDA Executive Chairman also said China has opened its commercial doors before Bangladesh with the duty free and quota free access to Bangladeshi products and this would give momentum to the bilateral trade relations.
Bangladesh Ambassador to China Mahbub Uz Zaman said that there is an excellent platform for cooperation between the two countries for further consolidating the bilateral relations.
He said with the three high-level bilateral visits between Bangladesh and China, the bilateral relationship has been elevated into a strategic partnership of cooperation.
Mahbub mentioned that during the Chinese President Xi Jinping’s last visit to Bangladesh in October 2016, a total of 27 MoUs and deals were signed amounting $39 billion and subsequently Bangladesh Prime Minister Sheikh Hasina also visited China in 2019 when also a good number of deals were inked.
“Chinese investments to Bangladesh have been playing an important role and have also been contributing towards employment generation” Mahbub said adding that the Chinese investors are looking forward to invest in the special economic zones in Bangladesh.
The Bangladesh Ambassador to China said the Bangladeshi knitwear and jute are poised to take advantage from the duty free and quota free market access in China.
In his power-point presentation, Dr Razzaque said by 2050, China would be one thirds of the global economy in terms of purchasing power parity and by that time the imports of China would increase further where lies a huge potentiality for Bangladesh.
He suggested that Bangladesh can do much better in China on RMG exports, expand cooperation with China in artificial intelligence, robotics, and set up technological hub with China.
Dr Razzaque showed that if Bangladesh can achieve a one-percent share of the Chinese market, export earnings from China alone could be in the range of $20-25 billion.
“This should be target of Bangladesh-China cooperation during the decade of 2021-30,” he said.
He said establishing a full-fledged FTA is an option to retain the available market access in China, but it comes with reciprocity.
He said there are estimates to suggest that a comprehensive bilateral FTA would have an overall positive impact on Bangladesh’s exports by 22 per cent of current exports to China. On the other hand, Chinese exports to Bangladesh could increase by about 16 per cent.
Any FTA deal with China should be backed by an investment agreement from which Bangladesh should be able to expand its exports, added Dr Razzaque.