Finance
Import-Export Exports to China fall despite tariff benefits
Dhaka, July 29: In the last fiscal year, Bangladesh's exports to China fell to $677 million, which is the lowest in the last three years.
According to the Export Promotion Bureau (EPB), excluding the account of export income during the corona epidemic in the financial year 2019-20, the income of the financial year 2022-23 is the lowest in a decade.
Bangladesh's limited number of export products, lack of intermediate products and technology products have become the main obstacles to export growth in the world's second largest economy. The country allows duty-free access to 98 percent of goods.
Exports for 2022-23 are down 1 percent from $683 million in the previous fiscal year, the lowest since 2019-20. Exports in 2019-20 were $600 million.
About 60 percent of Bangladesh's export earnings to China come from the garment and textile sector. And 85 percent of the national export income comes from the readymade garments sector.
Al Mamun Mridha, secretary general of Bangladesh China Chamber of Commerce and Industry, told The Daily Star, "Bangladesh's main export product is garments, but China also makes these products. Yet it imports garments worth $10 billion to $12 billion, and Bangladesh has to compete with Vietnam, Cambodia, India, Pakistan and Sri Lanka in this sector."
"So there is not much possibility of exporting garments to China. However, there is a possibility of exporting leather and leather products, IT-based services and marine fish," he said.
"There is a huge demand for mangoes, jackfruit and guava in China. There is also some demand for quality fresh food, shrimp, crab and eel fish. If we can comply with their standards, the export of these products will increase."
China is Bangladesh's largest trading partner in terms of imports. And Bangladesh's export earnings have decreased at a time when imports from China are increasing. As a result, the deficit in import-export trade with the country has increased further.
According to Bangladesh Bank, local traders have imported goods worth $19 billion from China. Especially machinery and parts, cotton, cloth, filaments, staple fibers, plastic products, iron and steel, pharmaceutical and chemical products.
Bangladeshi businessmen import essential goods from Asia's largest economy.
"We invite Chinese companies to set up factories of ancillary and import-alternative products in Bangladesh," Mridha said, adding that priority should be given to the production of import-alternative products in the Chinese economic zone under construction in Bangladesh.
Mohammad Hatem, executive president of Bangladesh Knitwear Manufacturers and Exporters Association, believes that due to the ongoing trade war with the UNITED States and Europe, several Chinese companies have focused on their domestic market, due to which exports to China are decreasing.
"As they focus on their local market, our opportunities will shrink. However, trade disputes and changes in the focus of Chinese manufacturers have created opportunities for Bangladesh's garment industry to increase exports to other countries," he said.
Shahin Ahmed, chairman of Bangladesh Tanners Association, said, "The growth of leather exports to China is less than expected. Chinese buyers do not pay good prices due to lack of compliance. '
According to the Export Promotion Bureau, Bangladesh exported raw hides worth $52.85 million in 2022-23 fiscal year.
Khondoker Golam Moazzem, research director of the Center for Policy Dialogue, believes that one of the reasons for the decline in exports to China is the similarity in the main export products.
"We don't even have the raw materials and intermediate products that China imports. India exports a large number of raw materials to the country.
"China is providing tariff benefits on 5,000 Bangladeshi products under the Asia Pacific Trade Agreement. Nevertheless, Bangladeshi manufacturers could not take the maximum advantage of this facility due to high value added obligations. This could be a strategy to protect China's domestic industry," Moazzem said.
AHM Ahsan, vice-chairman of the export promotion bureau, said, "We are aware of the decrease in export earnings to China.
"China imports intermediate products like semiconductors, we don't produce them. We have to have the capacity to export the products that China imports. Exports of fish and crabs were increasing there, but exports declined as China followed strict rules after corona."
Ahsan said his office has not formally submitted any recommendations on how to avail China's increased tariff benefits. The Export Promotion Bureau sometimes informs the higher authorities about the results and minutes of the Bangladesh-China Chamber meeting.
