Bangladesh-China bilateral trade in commercial services increased more than four times over the last two decades, although the volume of trade in commercial services is far below that of merchandise. At present, trade in commercial services with China accounts for less than one-tenth of trade in goods.
Statistics compiled by the World Trade Organization (WTO) showed that the bilateral trade in commercial services amounted to only $332 million in 2005. It crossed the $1 billion mark for the first time in 2014, reaching $1.06 billion. After reaching a peak of $2.03 billion in 2021, the trade in commercial services fell to $1.73 billion in 2023.
WTO statistics, compiled using the OECD Balanced Trade in Services (BaTIS), also showed that the export of commercial services stood at only $95 million in 2005 before rising to $474 million in 2023. At the same time, import of commercial services from China increased to $1,255 million (or $1.25 billion) in 2023 from $227 million in 2005.
Thus, between 2005 and 2023, Bangladesh's export of commercial services to China increased by around 10 per cent annually. At the same time, import from China posted 11.30 per cent growth on average. The updated BaTIS data on bilateral trade for 2024 is still not available.
UNDERSTANDING TRADE IN SERVICES: Trade in services is defined generally as the exchange of intangible products across borders, which can occur both directly and indirectly, and includes services embodied in traded goods or provided through foreign investment in affiliates. Unlike trade in goods, trade in services is complex and sometimes difficult to measure.
Commercial services are usually divided into four broad sectors: (i) transport, (ii) travel, (iii) goods-related services, and (iv) other commercial services. Again, commercial services are a major part of the overall trade in services. In other words, commercial services comprise all service categories except the government's goods and services. There are many sub-sectors of the four broad sectors of commercial services. The Extended Balance of Payments Services Classification (EBOPS 2010) categorises services trade into 12 broad categories. Trade in commercial services refers to all services except those provided in the exercise of governmental authority, which are excluded from the WTO General Agreement on Trade in Services (GATS).
The nature or type of service providing is critical to understanding trade in services. The locations of service suppliers and consumers at the time of service supply determine the relevant modes of supply under the WTO GATS. There are four such modes: cross-border supply, consumption abroad, commercial presence, and presence of natural persons.
CHINA IN GLOBAL SERVICES TRADE: China is the second largest importer of commercial services, preceded by the United States of America (USA). In 2024, China imported commercial services worth US$ 608 billion from the rest of the world, according to the WTO's Global Trade Outlook and Statistics - Update: October 2025. At the same time, China exported commercial services worth $444 billion to other nations, making it the fifth-largest exporter. In the last year, China was also the sixth-largest exporter and the eighth-largest importer of digitally deliverable services worldwide.
BD-CHINA SERVICES TRADE DYNAMICS: The bilateral deficit in services trade with China has widened as imports grew faster than exports, reflecting Bangladesh's strong domestic demand for infrastructure and travel services against a budding base of services export.
In sectoral terms, the largest China-sourced import categories are construction services (under other commercial services) and transport services. Again, sea transport shares more than 90 per cent of total transport services.
In 2023, import of construction services from China totalled $549 million, followed by import of transport services, totalling $402 million. Thus, these two types of services accounted for three-fourths of total import of commercial services from China.
Import of construction services generally involves bringing contractors and construction workers from other countries to the home country and paying them for their work. Under the WTO framework, it is Mode-2 of services trade, which is also known as 'consumption abroad.'
In a similar vein, import of transport services indicates that Bangladeshi firms are paying Chinese transport companies to transport products from China, and sometimes from a third country. It is Mode-1 or 'cross-border supply' in the WTO jargon.
According to an estimate by the American Enterprise Institute (AEI), a US think tank, Chinese companies have secured construction contracts worth $26.13 billion across various sectors in Bangladesh to date. For instance, Hunan Construction Investment gets $330 million contract in February this year for utilities. It is one of the biggest construction contracts awarded to Chinese construction suppliers.
AEI data also showed that Chinese construction services for utilities stood at $2.83 billion, while the total amount in the real estate sector was $2.36 billion. So far, the energy sector has attracted the highest amount of Chinese construction services, valued at $9.23 billion, followed by the transport sector, at $8.29 billion.
When it comes to export of services from Bangladesh, construction stays at the top of the list. In 2023, the country exported construction services worth $223.70 million to China which is a reflection of the sector's revealed comparative advantage (RCA). A study, conducted by Asia-Pacific Research and Training Network on Trade (ARTNet), showed that Bangladesh's highest RCA is in construction services. The RCA score is 7.87 and it shows strong relative specialisation, and consistent with the country's domestic construction boom and skilled engineering firms. The RCA score for China's construction services was 4.52 in 2023. RCA is a measure of a country's export performance in a specific product relative to the world average.
Bangladesh's export of transport services stood at $58.50 million, followed by travel services worth $27 million in the year under review.
EXPERTS' VIEW: When contacted, international trade expert Manzur Ahmed, also a businessman, said there was a significant scope in Bangladesh to expand trade in commercial services with China.
"China is not only the cheapest supplier of services across the world, but also provides efficient and competitive services," he said. "So, it will be beneficial for Bangladesh to import more Chinese services by opening up various sectors under different modes of the General Agreement on Trade in Services or GATS."
Manzur, also a trade and tariff policy adviser to the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), argues that Bangladesh can also increase services exports to China and many other countries in the long run, provided it improves rules and regulations in a transparent manner.
Nesar Ahmed, a former trade negotiator for Bangladesh at the WTO, opined that the country needed to identify sub-sectors to increase its exports to China and other countries. He said that some of the sectors and sub-sectors of services were capital-intensive, some were technology-oriented, and some expertise-dependent.
"Bangladesh has weaknesses in dealing with the first two types of services, while it can tap the potential in the third type of services," Nesar explained. "For instance, demand for caregiving services is increasing in many countries, including China, due to the ageing factor and requires human resource development. Bangladesh can build up a pool of caregivers and export them."
Nesar also pointed out that over the years, Bangladesh has developed capacity in management consulting services and can also be a potential export source. WTO-OECD BaTIS data backs the assertion, as Bangladesh supplied professional and management consulting services worth $67 million to China in 2023. In contrast, import of the same services from China amounted to only $10 million during the year under review.
The trade expert also pointed out that liberalising the services sector beyond the commitment made in the WTO is necessary. Bangladesh has already opened up telecommunications and five-star hotel business to trading partners under the WTO commitment. "Though some other sub-sectors and areas are not liberalised formally, we are importing those services from China heavily and with relaxed rules," he said. "It means Bangladesh can easily open up more sectors and sub-sectors, and by doing so, the country can also push for reciprocity."
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