Free Trade Agreement (FTA) with China is crucial for Bangladesh not only to reduce the mammoth trade gap between the two countries but also to absorb the shock that Bangladesh is experiencing after graduating from LDC.
This was observed by policymakers, economists and diplomats at a discussion titled ‘Bangladesh-China Economic and Trade Relations in the aftermath of the COVID-19 Global Pandemic', jointly organised by the Economic Reporters’ Forum (ERF) and Bangladesh China Chamber of Commerce & Industry (BCCCI) on Wednesday.
“We have started talks aiming at signing FTA with China and the negotiations need to be concluded”, said Commerce Minister Tipu Munshi.
He mentioned that the trade imbalance is highly unfavourable to Bangladesh and signing the FTA would help to reduce it.
“Our bilateral trade last year stood at around US$12 billion, of which China’s export to Bangladesh is over 11.5 billion”.
The minister urged the businesses to take advantage of China’s duty-free market for raising Bangladesh’s exports to China.
Terming China a trusted partner, the minister said China-funded government to government megaprojects are going on in a full swing which would help promote the country’s economic growth.
Chinese Ambassador Li Jiming also stressed the need for signing the China-Bangladesh FTA.
He said China had already provided duty-free and quota-free market access to 97 per cent of Bangladeshi products considering the deep friendship between the two nations.
He observed that as the people of both countries experienced common sufferings they are eager to support each other.
On the issue of Covid cooperation between the two countries, the Ambassador said the progress of the talks on commercial vaccine procurement from China is encouraging.
A pragmatic discussion is going on for procurement and coproduction of vaccine between the two countries, he said.
China already provided 500,000 vaccines in May and another 600,000 vaccines are being readied to be handed over to Bangladesh as a gift by June 13, he added.
“China will never forget Bangladesh's solidarity with China by supplying badly needed medical supplies which were followed by support to Bangladesh as part of friendship between the two countries” the Ambassador added.
In his keynote presentation, M A Razzaque of the Policy Research Institute analyses the prospect and challenges of the bilateral trade cooperation between the two countries.
He shows that by taking advantage of China’s policy to switch to high-end industry deserting the labour-intensive sector like RMG, Bangladesh can enhance its exports to China.
Presenting statistics, he shows that Bangladesh is lagging behind Vietnam and Cambodia in exploring the opportunity of China’s gradual exit from the RMG sector.
He recommended an FTA with China combining investment proposals and said this is crucial for Bangladesh to absorb the post-graduation shock.
After the graduation from LDC status, Bangladesh’s exports to China May fall by 19 per cent, he warned.
Presenting the resilience and quick recovery of China during the Pandemic, Mr Razzaque also stressed the need for a balanced move in dealing with China in the wake of the geopolitical tension over the emergence of China.
Bangladesh Ambassador to China Mahbub Zaman said that recently, a lot of Chinese companies are showing huge interest in investing in Bangladesh.
Our Embassy is providing all kind of assistance in facilitating Chinese investment in Bangladesh, he added.
Executive Chairman of BIDA Sirazul Islam said his agency is ready to provide all kinds of support to the Chinese investors.
President of BCCCI Mortaza, ERF President Sharmin Rinvy, and Secretary Rashed Ahmed also spoke in the virtual discussion.