Bangladesh will seek Chinese investment under buy-back arrangement, especially in manufacturing sector aiming to reduce growing trade deficit as Chinese vice premier Liu Yandong arrives in Dhaka on May 24, officials said.
"Bangladesh's trade deficit with China is progressively increasing. Substantial Chinese investment in the country under buy-back arrangement could be an effective way to address the issue," an inter-ministerial meeting held at the ministry of foreign affairs this week was told.
In this case, Chinese companies will be requested to invest in Bangladesh and take back their products to their home country which will help reduce trade imbalance between the two countries.
In the fiscal year 2013-14, Bangladesh's trade deficit with China stood at US$ 6.803 billion. The former exported goods worth $ 746.19 million to China while it imported goods valued at $ 7.550 billion from that country during the period.
Officials said the vice premier will be urged to encourage Chinese investors to invest in textiles, high-end garments, agricultural goods and pharmaceutical sector.
Due to progressive escalation of wage rates in recent years, they said, many Chinese entrepreneurs are now actively considering relocation of their labour-intensive industries.
"Bangladesh having adequate manpower can try to cash in on the opportunity by requesting China to make Bangladesh as a destination of their investment relocation," said an official.
Another official said Chinese investment in Bangladesh is on the rise. Some 250 Chinese private companies have made around $ 4.4 billion investment in the country so far.
The government may also request China to make investment in joint ventures in sectors where Bangladesh enjoys comparative advantage, he added. "Both the countries will benefit from investment with buy-back arrangement."
In such a case, the official said, information technology, light engineering, agro-processing, textile sector, fruit processing industry and jute products have potential.
Sources said China granted duty-free access to 4,721 Bangladeshi products to its market in 2010 under Asia-Pacific Trade Agreement (APTA). Bangladesh in 2013 again sought duty-free access of 17 more items to reduce trade imbalance between the two countries.
Despite assurance from the Chinese authorities, the issue is yet to be resolved, an official said, adding that during the Chinese vice premier's visit, the issue will be raised again.
He said Bangladesh is the third biggest export destination for China in the South Asian region. China will be urged to import more products from Bangladesh to reduce the trade gap.
Chinese assistance in Bangladesh's trade-related capacity building including setting up of testing laboratories, port infrastructure and quality assurance will also be sought.
Bangladesh's major exports to China include raw jute, jute yarn, pet bottles, T-shirts and trousers, textile materials, sesame seeds, polyvinyl chloride waste and scrap, hides and skins of bovine animals and objective of camera lenses.
On the other hand, Bangladesh's main imports from China include cotton, cotton yarn, thread and cotton fabrics, nuclear reactors, boilers, machinery and mechanical appliances, electrical machinery and equipment and parts thereof, sound recorders and reproducers, fertiliser, manmade staple fibres, knitted or crocheted fabrics and manmade filaments.
syful-islam@outlook.com
BD to seek Chinese investment under buy-back arrangement
Syful Islam | Published: May 16, 2015 00:00:00 | Updated: November 30, 2024 06:01:00
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