Bangladesh's trade and economy may suffer badly due to the ongoing Coronavirus contagion in China, as the former is highly dependent on the world's second largest economy for its industrial raw materials and finished goods.
Nearly 28 per cent of the country's import comes from China, followed by India, nearly 14 per cent.
China supplies mostly fabrics and garment accessories to local clothing manufacturers, on which Bangladesh's major export sector is highly dependent, sector insiders told the FE.
More than 40 per cent of its textile and textile-related goods come from China. Nearly 30 per cent machinery comes from there, according to the Bangladesh Bank statistics.
The country's import from China also includes agricultural machinery, mobile phone sets, electrical and electronics goods, fruits, and essential spices etc.
"We're really worried, as the country is highly dependent on China," said Anwar ul Islam Chowdhury, president of the Bangladesh Chamber of Industries (BCI), a trade-body having over 1,000 members.
Currently, China is observing New Year, the country's biggest festival, and almost all its factories are closed. So, the actual impact of Coronavirus outbreak that began in Wuhan last month will be felt after the end of New Year vacation, as affected people need at least two weeks to be confirmed.
"We're so far ok. But after the vacation, supply of goods and raw materials from China may be trimmed," Mr Chowdhury, also chairman of Evince Group - a leading clothing manufacturer, told the FE.
"To my mind, local oven sector may be the worst victim, as it is highly dependent on import from China," he opined.
Any critical situation in the Coronavirus-affected Chinese cities might drag down supply of raw materials from there, and thus affect Bangladesh's export sectors that are struggling in recent months.
Abul Kasem Khan, a former leader of the Dhaka Chamber of Commerce and Industry (DCCI), said, "We can see only a negligible economic impact now, but the uncertainty eventually implies that Bangladesh is not immune."
"We don't have any alternative to China. If the epidemic lasts longer and spreads to other nations, it could affect not only Bangladesh but the whole world also."
Mr Khan went on: "Clothing factories normally have very small inventories. If the outbreak continues for a month or so, it might impact the country's trade and economy in a negative way."
He, however, said the government has much information (regarding the situation), and will take necessary steps for handling it.
At present, a number of Chinese people are working in different large infrastructure projects in Bangladesh, including the Padma multipurpose bridge, and they are also contributing to the country's tourism sector as well.
Siddiqur Rahman, vice president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), told the FE that implementation of these mega projects may also suffer as a result of the Cornovirus outbreak.
"The number of Chinese people, involved in mega projects, is huge. So, the country's development works as well as tourism sector may be affected," he opined.
In the meantime, the Chattogram Port Authority (CPA) has taken an initiative for screening goods at the port to stop spreading the Cornovirus outbreak through goods and traffic from China.
Bangladesh has already decided to stop issuing on-arrival visa for Chinese nationals amid growing concern over the Coronavirus outbreak, Foreign Minister A K Abdul Momen said on Sunday.
"This is a temporary decision," he told reporters at a press conference at the Ministry of Foreign Affairs ahead of the Prime Minister's Italy visit on February 4-8.
Dr Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh (PRI), told the FE that the small investors, who frequently visit China for visiting factories and exploring business, will be impacted much.
Dr Mansur, however, said now there is an opportunity for Bangladesh to grab a share of Chinese clothing market, as many foreign buyers will search for alternative sourcing of their products.
"Trade may be diversified, and Bangladesh may be benefitted," he added.
Traders said international commodity market has been in a volatile situation since the Coronavirus epidemic in China.
Abul Bashar Chowdhuiry, a leading importer of commodities, told the FE: "Prices of Chinese goods will jump following the outbreak."
Meanwhile, in response to the situation, international airlines are suspending or curtailing their flights to and from China, following a sharp fall in number of passengers, according to Flightradar24.com.
Some major airlines like British Airways and Lufthansa Group (Lufthansa, SWISS, and Austrian) have canceled all their flights to China, while others like United and American Airlines have drastically reduced their schedules, it added.
© 2024 - All Rights with The Financial Express
