Published in New Age on Friday, 21 August 2015.
Trade gap with China rises to $7.43b in FY15
AKM Zamir Uddin
The country’s trade gap with China increased by 9.23 per cent to $7.43 billion in last financial year from $6.80 billion in the FY 2013-14 despite a zero tariff export facility for a number of items to the Chinese market.
An expert and Bangladesh Bank officials said the trade gap with China continued to rise in recent years as Bangladesh failed to attract the Chinese consumers to its products due to lack of product diversification.
Bangladesh’s imports from China stood at $8.22 billion in the FY15 whereas exports stood at $791 million during the financial year.
The trade gap in FY14 was $6.80 billion with an export figure of $746.19 million and import of $7.55 billion. The country’s trade gap with China stood at $5.86 billion in the FY13.
Centre for Policy Dialogue executive director Mustafizur Rahman told New Age on Thursday that it was a bad sign that the country’s trade deficit with China continued to rise in recent years.
‘Bangladesh is now enjoying a zero tariff facility in exporting its products to the Chinese market. But, we have failed to utilise the facility fully due to lack of product diversification,’ he said.
The country’s single largest import source is China as it (Bangladesh) imports huge amount of capital machinery, industrial raw materials and consumer goods from the country due to lower prices of products there, he said.
The increasing trend in import from China is not a headache for the business sector but the rising trade gap is a matter of concern, he said.
Mustafizur said, ‘China imports products worth more than trillion dollars from different countries each year, but our export share in the country is very low.’
Exports of footwear, leather and readymade garment are now maintaining an upward trend in China, but it is not satisfactory as the demand for such products is high in the Chinese market, he said.
The local exporters should give more attention to diversification of the three products in a bid to boost the export to China, he said.
The government should speed up investment for product diversification keeping the Chinese market in mind to decrease the trade deficit between Bangladesh and China, he said.
The government has given commitment to the Chinese businesspeople to set up a special economic zone for them, he said.
The government should try to increase its export volume to the country in exchange of the facility, he said.
The exports of RMG products, country’s main export items to the Chinese market, increased to $304.93 million in the FY15 from $236.37 million in the FY14.
A BB official said that Bangladesh exported readymade garment products of more than $27 billion to the global markets in last financial year. But, the country’s export to China was very paltry considering the size of the market, he said.
So, the RMG sector should give attention to the issue, the official said.