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From trade gap to gateway
Can Bangladesh turn Chinese market access into production, exports and a way into global supply chains?
A jackfruit bound for China cannot simply be picked and shipped. It must be fitted with a new, wind-resistant, waterproof, ventilated bag roughly two weeks after pollination — sealed, dated and kept off the ground until cut down with a knife and carried, still bagged, to a registered packing house.
China’s customs authority set out those requirements when it formally approved fresh Bangladeshi jackfruit for import on 27 July 2026. The market has officially opened. The first commercial shipment is still waiting.
That gap — between a market that has technically opened and a country still learning to walk through it — is the real story of Bangladesh’s trade relationship with China, and it repeats far beyond a single fruit.
China is Bangladesh’s biggest trading partner. Chinese machinery, raw materials and intermediate goods feed factories across the country, while China has opened its vast market to Bangladeshi goods on terms few countries this size ever receive.
Yet when it comes to actually selling into China, Bangladesh remains a remarkably small player.
“Although bilateral trade between the two countries is currently close to $20 billion, Bangladesh has a huge trade deficit with China. Bangladesh exports goods worth less than US$1 billion to China annually,” FBCCI Administrator Md Fazlul Hoque told a Chinese business delegation from the China Council for the Promotion of International Trade in Dhaka on 17 August 2026.
EPB figures show some progress: exports to China reached $742.5 million in the first 11 months of FY26, up about 16% year-on-year.
But even crossing the symbolic $1 billion mark for the first time would barely register against imports, which have stayed in the high teens of billions of dollars in recent years.
The imbalance is not new, and not entirely China’s doing.
Much of what Bangladesh imports — machinery, chemicals, intermediate goods — ultimately feeds its own manufacturing and export industries, as Bangladesh’s embassy in Beijing has noted.
But another fact is harder to explain away: China has extended zero-tariff treatment to 100% of tariff lines for Bangladeshi products, per the joint communiqué issued after Prime Minister Tarique Rahman’s June visit, with both sides explicitly committing to upgrading Bangladesh’s export capacity.
The door is open. Bangladesh has yet to walk through it at scale — and that Gazipur jackfruit, still waiting on its bag to come off, is as good a place as any to understand why.
The question is no longer whether Chinese companies will build factories here. It is whether those factories can help Bangladesh produce more competitively, enter Chinese supply chains and ultimately sell more to China.
A milestone that changes less than it should
Crossing $1 billion in exports to China would be symbolically important, but not economically transformative. Bangladesh’s exports stood at $694.49 million in FY25; by July-May of FY26 they had reached $742.5 million, a new high.
But the starting point is so low that even rapid growth leaves the underlying imbalance largely intact, and the export basket remains narrow — garments, leather, jute, a handful of agricultural products.
Bangladesh is trying to sell into a country that is itself one of the world’s largest manufacturing powers, so competing on price alone is unlikely to work.
The opportunity lies in identifying where Chinese demand and Bangladeshi capabilities overlap — which, says M Masrur Reaz, chairman of Policy Exchange Bangladesh, is the core of the problem.
“Bangladesh has been enjoying duty-free market access to China for nearly 9,000 products since 2020,” he told Daily Sun, “Despite this facility, Bangladesh’s exports to the Chinese market have not increased as much as expected.”
The problem, he argues, has little to do with tariffs and much more with what Bangladesh can produce competitively.
“Bangladeshi products are still unable to compete sufficiently with the production capacity and competitiveness of most Chinese products,” he said, noting that almost every country depends on China’s manufacturing capacity and supply chains in some way. Bangladesh needs products it can produce competitively, consistently and at the scale Chinese buyers require.
Potential openings identified by industry insiders and EPB officials range from synthetic activewear and non-knit formalwear to jute products, leather goods, frozen fish and mango-based foods, with more ambitious possibilities in pharmaceutical ingredients, smart meters and lithium-ion battery packs linked to Chinese supply chains.
FBCCI has pressed a similar case directly to Chinese counterparts.
At last month’s meeting with the China Council delegation, Bangladeshi business leaders invited joint investment in food processing, medical devices and accessories, pharmaceuticals and active pharmaceutical ingredients, renewable energy, and jute and jute-based products.
He Tao, director of Honghe’s Bureau of Commerce, responded: “One of our key objectives is to make the import-export process between the two countries easier and unlock new opportunities in trade and business.”
The question, therefore, is not how many products enjoy zero-tariff access. It is which of them Bangladesh can actually sell.
Zero tariff is not zero barrier
Bangladesh has an extraordinary advantage on paper — zero tariffs across every line. But tariffs are only one part of the cost of entering a market.
Exporters still have to meet product standards, testing and certification requirements, sanitary and phytosanitary rules, registration, labelling and customs procedures; Bangladesh’s embassy in Beijing itself identifies such non-tariff barriers as a major obstacle.
A zero tariff means little to an exporter that cannot obtain certification, maintain consistent quality or supply reliably.
This is the distinction between market access, which Bangladesh has secured, and market entry, which it has struggled with.
The jackfruit trade illustrates the problem almost perfectly.
China’s GACC has approved fresh jackfruit imports under a bilateral quarantine protocol, but exports aren’t expected to begin until 2027 — a delay not about China refusing access but about Bangladesh building the compliance system to use it: registered orchards, approved packing houses, Good Agricultural Practices, individual bagging as described, and manual inspection that can still mean rejection over stray soil, debris or an unlisted pest.
“According to GACC requirements, we made an action plan and sent it to each district to select and register orchards,” said AKM Mofidul Islam, deputy director (export) of the Plant Quarantine Wing at the DAE.
“We need to work to produce exportable jackfruit and it will take one more year,” he added.
Mohammad Arifur Rahman, director of the DAE’s Exportable Mango Production Project, calls the challenge partly organisational — three Gazipur orchards have already been approved through online verification.
“That means our existing practices are already in place,” he said. “The main task is to organise these practices into a proper structure.”
Bangladesh produced 18.35 lakh tonnes of jackfruit in FY25, but exports fell from 2,231.82 tonnes in FY23 to 1,199.27 tonnes in FY25, with just 1,083.09 tonnes shipped by May.
Mango tells a similar story: Bangladesh’s first-ever mango shipment to China left Dhaka on 28 May 2025 — 10 tonnes bound for Changsha, Hunan — after GACC cleared Bangladeshi mangoes the previous July, with then-commerce adviser Sk Bashir Uddin targeting up to 100 tonnes that season.
The country produces roughly 25 lakh tonnes of mangoes a year but exports only 1,000 to 3,000 tonnes globally. China’s market has opened faster than Bangladesh’s capacity to supply it.
The missing bridge
A less visible but equally important obstacle is the weak commercial connection between Bangladeshi producers and Chinese buyers.
Bangladesh has production; China has consumers and vast industrial supply chains. A Bangladeshi manufacturer trying to enter China has to find buyers, understand distribution, navigate regulation and build relationships from nothing.
Chinese companies already operating in Bangladesh, however, possess exactly what’s missing — knowledge of Chinese buyers, distribution networks and established relationships — raising a more interesting possibility than simply asking China to buy more: using Chinese investment as an export bridge into China.
“This is not just a possibility — we are already seeing this model used in some cases, particularly through the existing supply chains and business networks of Chinese companies operating in Bangladesh,” said Mohd Khorshed Alam, president of the Bangladesh China Chamber of Commerce & Industry.
But the model remains largely ad hoc.
“If the Chinese companies working in Bangladesh connect Bangladeshi producers with their own Chinese distributors, importers and retail networks, exports could increase significantly within a short time,” he told Daily Sun.
For Khorshed Alam, the biggest barrier is the absence of direct links with Chinese buyers.
“Even though many Bangladeshi products are manufactured to international standards, our exporters have limited opportunity to communicate directly about the specific market demand, buyers, pricing and distribution networks in China,” he said — though buyer connections alone aren’t enough.
“Duty-free access alone will not increase exports. Buyer connection, product standards and reliable supply — these three things have to be ensured simultaneously.”
Market first, production next
BCCCI is pushing a more targeted approach.
“Our goal is not just ordinary trade fairs or delegations — it’s product-specific matchmaking,” Khorshed Alam said, floating a pilot of roughly 20 department stores across Chinese provinces under a “Made in Bangladesh” label to test consumer acceptance directly, alongside more direct matchmaking between Chinese importers and Bangladeshi exporters.
“Our goal will be ‘market first, production next’ — first identify the real demand and buyers in the Chinese market, and then build Bangladesh’s production and export capacity accordingly,” he said.
Khorshed Alam called for stronger Chinese investment facilitation and more regular business dialogue.
Garments, leather and value addition
Garments show both the opportunity and the limitation. Bangladesh is the world’s second-largest apparel exporter, but China is a manufacturing and consumer market of an entirely different scale, so the realistic opening is supplying Chinese brands rather than competing with them — a brand sourcing from Bangladesh already understands its own market and doesn’t need the factory to build Chinese distribution from scratch.
Leather offers a similar opportunity in moving beyond raw materials toward higher-value goods.
Bangladesh exports around $1.76 billion in footwear and leather goods. FLAXA President Syed Nasim Manzur believes that could reach $5 billion by 2030, partly through non-leather footwear, where raising Bangladesh’s under-0.5% global market share to 5% could add roughly $3.5 billion — a potential Chinese opening well beyond traditional leather.
That shift toward higher-value, non-traditional footwear is already happening at scale, if not yet with Chinese capital.
Xin Chang Shoes (BD) Ltd, Taiwanese-owned, makes safety and functional footwear at the Karnaphuli EPZ — waterproof, aluminium-toe, chemical-resistant boots for global brands including Timberland, Wolverine World Wide and 5.11 Tactical, supplying US soldiers, Alberta oilfield workers and European mountaineers alike.
It is exactly the value-added product the sector needs more of: exports exceeded $100 million last fiscal year, up from $2.4 million when the company began with 14 workers in 2010, and it now employs around 12,000 across two factories.
The company’s own logic doubles as a case study in the dynamic Reaz and Alam describe.
“We started investing in Vietnam and Bangladesh at the same time,” operations manager Tony Hsieh told Daily Sun, adding, “But orders in Vietnam are declining and it has become difficult to recruit new workers there. So, our decision to invest in Bangladesh was absolutely right.”
Xin Chang is adding four automated lines by 2029, aiming to nearly double capacity to six to eight million pairs a year, betting on a global safety-footwear market expected to roughly double to $23.6 billion by 2033.
For Dipankar De, one of the original 14 employees eighteen years ago, the payoff is less abstract: “This is more than a workplace for me. It is my home. When I travel abroad and see ‘Made in Bangladesh’ written on shoes in different brand stores, I feel proud.”
That is what capability, not just capacity, looks like — the model Chinese investment here would need to replicate to matter as much as this one Taiwanese factory already does.
But expanding capacity requires fixing domestic bottlenecks too. Alam warned that bonded facilities meant for duty-free re-export inputs are being abused, with some leaking into the domestic market and hurting local mills.
“For forty years we have failed to achieve real value addition in our garment industry, mainly because customs authorities have failed to stop bond misuse, and it is destroying our domestic mills,” he said, favouring a bank-guarantee mechanism instead — duty-free imports allowed against a guarantee released only after verified export.
Certification is another hurdle
Commerce Minister Khandakar Abdul Muktadir says Leather Working Group certification will become compulsory alongside mandatory tannery compliance, while the undersized Savar effluent treatment plant is being rebuilt as part of a push toward a “Bangladesh Leather” brand built on finished products.
The lesson extends beyond leather: export opportunity cannot be separated from the domestic systems needed to meet international standards.
Higher ambitions: food, pharmaceuticals and electronics
Food and seafood offer opportunities where compliance matters more than tariffs. Pharmaceuticals and electronics offer something bigger — a chance to prove Bangladesh can move beyond labour-intensive exports.
Bangladesh has real pharmaceutical manufacturing expertise and China an enormous healthcare market, but entry requires regulatory approval, technological capability and competing with sophisticated domestic and multinational producers; success would demonstrate Bangladesh can export knowledge-intensive products, not only labour-intensive ones.
Electronics may offer a broader transformation still. BEPZA’s $717.71 million in FY26 commitments already includes electronics, Bluetooth headphones and drones — a sector that pulls in suppliers of components, packaging, software, testing and logistics, with Chinese companies already at the centre of global electronics supply chains.
If part of that ecosystem takes root here, Bangladesh could move gradually from assembly toward component manufacturing.
The objective should not be a Chinese electronics factory in Bangladesh, but a Chinese-linked production network increasingly supplied by Bangladeshi companies.
Make the deficit productive
A $17-billion-plus trade gap looks alarming, but treating it as a problem of excessive imports would be self-defeating — Bangladesh’s factories depend on Chinese machinery and inputs, and reducing those without domestic alternatives risks reducing production itself.
The more useful question is how much value Bangladesh creates from every dollar of Chinese input.
A $1 million Chinese machine that helps produce $5 million in exports is productive capital, not just an import; a Chinese investor who trains engineers and transfers technology leaves behind capability that outlasts the original investment.
That suggests a second reading of “China-plus-one” — call it “Bangladesh-plus-China”: Bangladeshi firms using Chinese investment, technology and distribution to reach Chinese consumers, or joint ventures sourcing locally, manufacturing here, and selling into both markets — a considerably deeper relationship than simply buying from one country and selling to another.
Khorshed Alam sees the opportunity similarly. “As Chinese companies consider China-plus-one or production outside China due to global tariff pressure and supply-chain diversification, Bangladesh — if it can upgrade its large workforce — can leverage its long-standing business relationship with Chinese factories,” he said.
But opportunity is not guarantee.
“The opportunity will not turn into investment or exports on its own,” he explained, “What our business community needs most right now is long-term planning, maintaining international standards, quick decision-making, technology adoption, and direct partnership with Chinese investors and buyers.”
His preferred endpoint: Chinese investment turning Bangladesh into “a production hub for exports to China and other international markets.”
From investment policy to industrial policy
That requires changing how Bangladesh evaluates Chinese investment.
A factory that imports almost everything and exports finished goods still creates jobs and foreign exchange; one that trains engineers, develops domestic suppliers and transfers technology creates something more valuable — capability.
Bangladesh has too often treated investment policy and export policy as separate exercises: a Chinese electronics investment should be judged partly on whether it develops local suppliers, a food-processing project on whether it anchors a China-facing agricultural chain, an apparel investment on whether it connects Bangladeshi factories with Chinese brands.
That is how investment becomes industrial policy rather than a headline figure.
Reaz argues Bangladesh has never effectively adopted a deliberate strategy of identifying sectors with export potential and courting the Chinese investors best suited to develop them.
“What is needed now is to specifically identify the sectors in Bangladesh that have export potential in international markets and where Chinese investors may have an interest,” he said, “and then to move forward with investment proposals targeting relevant Chinese investors” — an approach that could deliver more realised investment and a broader export base at once.
A different scorecard
Success should not be measured by MoUs signed or offices opened.
A more meaningful scorecard would track actual export growth, new Bangladeshi products entering China, Chinese factories in Bangladesh exporting back to China, Bangladeshi firms entering their supply chains, workers gaining advanced skills, and the share of announced investment reaching actual production — numbers that would show whether the relationship is genuinely changing shape, or simply growing larger along old lines.
For five decades, Bangladesh-China ties grew largely along one axis: infrastructure, connectivity, trade volume.
The next transformation, if it happens, will be industrial — Chinese companies manufacturing here, Bangladeshi firms entering Chinese supply chains, Chinese capital providing the technology and distribution networks Bangladeshi exporters have struggled to build alone.
The objective is not to eliminate the trade deficit with China but to make it productive: producing with China and selling to China, while using the resulting capabilities to sell to the rest of the world.
The real test begins after the investment announcement, not before it — in the unglamorous work of identifying what Chinese buyers actually want, meeting certification requirements, building cold-chain infrastructure, and directing Chinese investment toward export-oriented sectors.
Bangladesh’s pitch to China must evolve from “come and invest” to something more demanding: come, produce here, source here, train here — and help us sell what we make to your own market.
That is the second phase of the relationship, and how Bangladesh can turn its biggest trade imbalance into something more valuable than a statistic: a gateway to production, capability and exports.