China, Japan investors to enjoy better business ambience

Investors from China and Japan are likely to enjoy better business environment in Bangladesh following comprehensive partnership that helps the countries boost trade and commerce in a win-win situation.
Analysts hold such high hopes over the latest developments on the diplomatic front.
Chamber leaders and businessmen think such interactions will help reduce millions of dollars worth of trade deficit the country suffers and accelerate socioeconomic development of each other.
They, however, recommended some concrete steps to ensure the desired business environment for setting up industries and developing service sectors independently or under joint ventures.
Bangladesh enjoys comprehensive partnership with Japan and China after the Prime Minister signed joint statements with her counterparts of the two countries. The signing took place during separate visits to the two economic powerhouses late May and early June this year.
Both the PM visits focused on the upgrading of bilateral relationship to economic and business cooperation-at a time when diplomatic ties are virtually being redefined on the parameters of present-day imperatives.
Sources said the two countries, mainly Japan, have long been demanding improvement of the business environment through easing rules and regulations for the investors and providing free or low-cost land to facilitate their investment in Bangladesh as a China Plus country.
Officials of the ministries of foreign affairs and commerce said after the PM visits, steps had already been started to be taken to improve business environment and invite foreign direct investment from Japan and China in line with commitment to the partnership.
Official delegates from the two countries have visited the country and held a number of meetings exploring opportunities.
A foreign ministry official said comprehensive partnership made the two global economic powers committed to working for Bangladesh through providing financial, technical support for social and economic development of the country.
Commitment of US $6 billion has come from Japan and  $4.0 billion from China.
According to the Economic Relations Division, Japan has already started working on fulfilling its commitment under Official Development Assistance (ODA) to help Bangladesh develop infrastructures, including road, power and energy.
An ERD official, however, said from China side, progress has been slow for not finalising the interest rate on lending. The country has also not finalised the projects to be supported due to inclusion of some new projects from the Bangladesh side for Chinese loan.
He said a delegation from China is likely in the country to finalise the interest rate on the Chinese credits. Thereafter, a better progress may be tangible.
Fakhrul Islam, executive chairman of Bangladesh Economic Zones Authority, told the FE that Japan delegates already had started visiting different sites to finalise their preference of special economic zones.
With the support of Japan International Cooperation Agency (JICA), Japan External Trade Organisation (JETRO) and Japanese Commerce and Industry Association in Dhaka (JCIAD), potential investors are working in this regard.
He, however, said as the government signed memorandum of understanding (MoU) with the Chinese commerce ministry, the country's embassy is now dealing with the site selection for the Chinese economic zone.
Sources said BEZA has proposed several sites to both Japan and China to set up their respective EZs, but, the officials said, the Japanese prefer their industries to be set in and around Dhaka and Chittagong cities.
But the Chinese refrained from confirming either of the government-proposed Mirersorai and Anwara sites for respective investments.
The foreign ministry official said after the PM visit, 40 plots are being readied for Japanese investors.
He, however, said to tap benefit from the Japanese investments as the China plus country or ocean country, more steps are needed to be taken to better business rule and regulation, infrastructure facilities and finally people's behaviour.
A Commerce Ministry official said public and private-level dialogues between Bangladesh and Japan will be held this month under the banner of Japan-Bangladesh government and non-government forum, formed recently to explore areas of trade and commerce.
He said the Japanese government has cut one stage to provide GSP facility for Bangladeshi readymade garment export to Japan. Bangladesh now can export readymade garments to Japan by meeting two stages instead of three- stage prerequisites for getting the GSP facility.
The official also said with the help of a Chinese company, a site in Gazaria has been developed to set up a separate palli (village) for readymade garment industries.
Besides, the country has already been involved with the setting up of a 1,320MW coal- fired power plant and constructing country's longest bridge, over the Padma River.
However, chamber leaders and business community of the country advocate for exploring more opportunities created with the comprehensive partnership through increased exchange of visits and holding dialogues by respective chambers and business communities of the three countries.
Besides, they laid importance on government-level meetings to identify the barriers and steps for removal of those without delay for reaping the benefit when it will start coming into the country. These include easing visa procedure, settlement of trade disputes, and synchronising accreditation quality.
JETRO representative Kei Kawano said Japan considers potential to shift its small and medium enterprises (SME) to Bangladesh and more export opportunities for Bangladeshi products to Japan other than RMG.
But he said the Japanese investors remain cautious about Bangladesh as the China-plus market due to some major barriers like insufficient supply of energy, gas, power logistics and infrastructures to invest in the country
"Raw material import here is very challenging in absence of developing of enough industries other than readymade garments in Bangladesh," the JETRO representative, who is also secretary-general of JCIAD, told the FE at his office.
This correspondent tried to contact Vice President of China-Bangladesh Commercial Chamber through cell and email but could not get any response to comment on the Chinese side.
Abdul Haque, director of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), laid importance on making the land available for the Japanese investors as its absence has already forced many investors to look for better opportunity in neighbouring countries, including Myanmar.
"There are many lands in the country which are either illegally occupied or misused by different quarters for which the government could not get any benefit. But lending these lands to the potential investors on easy terms may bring socioeconomic benefit for the country as we need technology, expertise, to graduate to our vision: middle-income country," he told the FE on the sidelines of a workshop of JICA recently.
FBCCI president Kazi Akram Uddin Ahmed observed that Bangladesh needs Chinese assistance to diversify industrial products by ensuring quality and standard as he believes this will help increase the country's export baskets as China has made tremendous progress in this regard.
Shahedul Islam, Managing Director of Bengal Pacific PVT Ltd and FBCCI director, said improvement of relationship with Chinese trade bodies can ensure settlement of many trade disputes which exist between the two countries and exploring new areas of investment.
Japan and China consider Bangladesh as new partner being the second- largest RMG exporter, having cheap labour and its geopolitical location in the Asia-Pacific region.
China gives importance on developing silk routes for trade and business for being landlocked. But Japan wants to connect Bangladesh along the sea coast as one of the important countries of Indian Ocean.
But Bangladesh has huge trade imbalance with both Japan and China. The trade deficit with Japan was recorded over Tk 100 billion. It's three to fourfold in the case of China.
The Japanese investment in Bangladesh crossed over US$ 1.0 billion for having very low interest rate. Chinese investment over $300 million was recorded in eight Bangladesh EPZs.