China becomes Bangladesh's top trading partner again
May ranking outbids Mar-Apr India peaks
Economic superpower China emerges as top trading partner of Bangladesh again, in May official ranking, outbidding next-door neighbour India's peak position in consecutive two months.
According to Bangladesh Bureau of Statistics (BBS) data India had grabbed the top position in trading with Bangladesh in March and April 2022. Usually, China holds sway over Bangladesh in trading, as it also does in business with India, too, as per reports.
Local industry and trade experts feel the uptrend in Bangladesh-China trade would continue in the years to come as the products of China are cheaper and vastly diversified.
According to the BBS statistics, the bilateral trade in May last stood at Tk 1.8 trillion. And China also had nearly 17-percent share in the country's total trade.
India, the second-ranked trade partner of Bangladesh, had nearly 13-percent share in the bilateral trade amounting to Tk 1.3 trillion during the period under review.
The United States usually retains the third position as trading partner with Bangladesh.
During the period, in Bangladesh's two-way commerce with China, Bangladesh exported merchandise worth Tk 335 billion while its goods import cost Tk 1.77 trillion.
On the other hand, Bangladesh's shipments to India were equivalent to Tk 113.23 billion against huge imports worth Tk 1.228 trillion.
Bangladesh imports all major items from China, ranging from industrial raw materials to consumer goods.
In the meantime, following volatility of the US dollar on the forex market, leading chamber- body Metropolitan Chamber of Commerce and Industry, Dhaka, recently urged the central bank to introduce RMB as the second currency to reduce dependence on the dollar.
The MCCI suggested taking recourse to RMB (Renminbi) instead of dollar in international trading as Bangladesh imports most from the Chinese market.
This switch, it feels, would be a great relief in easing the demand for the US dollar. RMB has already been officially recognised as a second reserve currency in Bangladesh.
Garment manufactures look upon China as a "trusted trading partner" and local firms depend on China for their supplies to remain competitive.
They also mentioned that China that was diversifying their business to other countries.
"China offers most competitive prices and have diversifications," says Anwar Ul Alam Chowdhury (Pervez), managing director of leading clothing maker Evince Group and former president of the country's apex apparel body-BGMEA.
"Even many European brands produce in China to offer competitive prices to their allies," Mr Chowdhury told the FE.
Economists view that China has the biggest supply source for world's manufacturing market which lures many economies to source from China.
Dr M. Masrur Reaz, chairman at the Policy Exchange of Bangladesh, told the FE that China is the largest supply source for the world with manufacturing and market-delivery capacity that is unmatched by any other country in the world.
In 2020, China alone had 14-percent share in world's total exports, he notes.
"Taking advantage of the economy of scale arising from huge volume being produced, high productivity, extremely efficient logistic capabilities that ensure incredible speed to market, the cost-effectiveness of Chinese products make China an absolutely crucial trading partner for the global economies," he also notes.
Following such growing reliance on China, many shipping lines now operate direct shipping services between the two countries although Bangladesh's shipments to the second-biggest economy remained meagre.
Currently, four international shipping lines have direct shipping linkage, including the biggest container liner-Maersk Line.