Bangladesh should focus on diversification of products in its export basket to make the most out of the tariff waiver in the Chinese market, experts opined.
Bilateral trade between Bangladesh and China was $12.38 billion in FY 2017-18 and $14.48 billion in FY 2018-19. There is a huge gap in bilateral trade as Bangladesh and China maintain 1: 16.42 trade ratio for the last couple of years.In a significant show of economic diplomacy in South Asia, China has announced tariff exemption for 97 per cent of exports from Bangladesh, effective from July 1.
Economists and businesses mentioned that the tariff exemption will help Bangladesh reduce the gap in trade ratio in addition to boosting the country’s economy.
Terming the move as a positive development, former Bangladesh Bank Governor Atiur Rahman said Bangladesh needs to maintain its best trade relations with both the Asian giant economies India and China.
“Trade relations with India have also improved significantly even during this pandemic. Access of most of our products to the Chinese market will be beneficial as the whole of the international trade is now facing an unprecedented recession. We too are in our back foot. Despite border skirmishes, the Indo-Chinese trade relations are also pretty robust,” Prof Atiur Rahman explained to the Daily Sun.
The eminent economist also hoped that the Chinese market will open up for Bangladeshi readymade garments and leather products as the global demand for these export items of Bangladesh is on the wane.
He said Bangladesh believes in open diplomacy which emphasizes friendship to all and enmity to none and the gesture from China fits in very well with our core foreign policy agenda.“In fact, we got to pursue more aggressive economic diplomacy with our Asian peers including these two economic giants to participate more significantly in the intra-regional trade relations without any prejudice. None should forget that this is the Asian century and we must play our part in helping this to flourish,” added Prof Atiur, also the Bangabandhu Chair at Dhaka University.
Despite the favourable move for Bangladesh, economy researcher Ahsan H Mansur expressed concern over lack of diversification of export products.
“We have a limitation of products which can survive in the Chinese market. I think there are only three or four products in the export basket which would be benefited from the new trade privilege,” Ahsan H Mansur, also chairman of Brac Bank, said while talking to Daily Sun.
Bangladesh has 30-35 products in the export basket with Chinese markets including major products of frozen and live fish, leather goods, vegetable, textile fabrics, furniture, agro products, tea, chemical products, raw jute, jute goods, knitwear and garments, according to Bangladesh China Chamber of Commerce and Industries (BCCCI).
Welcoming the Chinese move, Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) President Sheikh Fazle Fahim said Bangladesh should focus on value chain sector-based support through fiscal, non-fiscal, tariff and applicable incentives across agriculture, manufacturing and service sectors to maintain export growth strategy.
“Product access in the Chinese market is welcomed in this humanitarian global crisis. We are in consultation with government, stakeholders of 97 per cent product list to maximise export opportunities of the 5100 plus products, mitigate any challenges in execution and look into the 3 per cent that still has barriers and will be engaged from FBCCI with our counterparts in China as we are sure government to government engagements will continue on policy supports as the new opportunities yielded because of that,” Sheikh Fahim, also Managing Director of Obsidian Bangladesh, told the Daily Sun on Saturday.
BCCCI Joint Secretary General Al Mamun Mridha informed that local entrepreneurs will avail the facility from July 1.