Professor Mustafizur Rahman on Chinese domestic market, published in the Financial Express on Monday, 30 September 2013.
B’desh can significantly raise RMG export to China: BGMEA
Talha Bin Habib
Bangladesh can significantly raise export of apparel product to China because of its price competitiveness, industry insiders said.
China is the largest exporter of RMG. But it also imports a substantial volume of apparel items from other countries to meet its local demand.
China is switching over to high-valued fashion design items from basic products. So Bangladesh can seize the opportunity to export its apparel items to China, they said.
“It is a good opportunity for us as more and more Chinese buyers prefer to buy Bangladeshi apparel considering its price competitiveness and quality,” Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Atiqul Islam told the FE Sunday.
“The internal demand for apparel items in China is worth US $ 310 billion annually. If we can grab 10 per cent market share then we will be able to export apparel items worth US $ 31 billion within the next few years to China,” he said.
“If we are able to raise our export to China even by 1 per cent or $ 300 million annually then it will be a good achievement for us,” he added.
China is likely to emerge as the ‘US plus’ market for Bangladeshi apparel products as export of the items to the world’s second largest economy is rising fast, industry insiders said.
They said that the US is a country of only 312 million people while Chinese population is more than 1.34 billion. So, if Bangladesh can grab a nominal portion of Chinese clothing market that will be much higher than our present export to the US.
They said that China, the top apparel maker, now prefers to produce high-tech and high-end products. So, now it will have to depend on others for low-end cheap items for its domestic market.
“Being the second largest apparel maker and very close to China, we have a bright prospect to grab the market if we can raise pur production,” said Mr Islam.
Bangladesh exported apparel items to different countries worth $ 21.5 billion during the fiscal year (FY) 2012-13. It has set a target to export 13 per cent more during the FY 2013-14 to with FY 2012-13.
Bangladesh exported apparel products to China worth US $ 139.14 million during the fiscal year (FY) 2012-13 which was $ 104.52 million during the FY 2011-12, double from $ 52.81 million in FY 2010-11. The apparel export to China was only worth $ 18.95 million in FY 2009-10.
Of the country’s total $ 21.5 billion apparel export, some 57 per cent goes to European Union, 23 per cent to the United States, and 5.0 per cent to Canada. Some 205 apparel items now enjoy zero duty facility in the Chinese market, according to BGMEA.
Bangladesh is the second largest readymade garment (RMG) exporter and it can secure first position due to price competitiveness and international quality of the products.
Mr Islam suggested simplification of Chinese visa procedure, holding more business to business (B to B) meeting, introducing Chinese language to the local educational institutes and building confidence among the Chinese buyers to raise the country’s export.
“China could be the third largest export destination for us. There should be Bangladesh’s single country fair in China to draw Chinese customers,” Abdus Salam Murshedy, former president of Bangladesh Exporters Association told the FE Saturday.
He suggested creating more Chinese speaking local (Bangladeshi) people so that they could interact with the Chinese buyers.
“China has a vast domestic market. It has now shifted to high-valued fashion design items from basic products. We get zero tariffs to export our apparel to China. We should analyse their (Chinese) market structure and gear up our competitiveness to grab the market,” Executive Director of Centre for Policy Dialogue (CPD) Professor Mustafizur Rhaman told the FE.
China has offered zero-tariff treatment to Bangladesh under the Asia-Pacific Trade Agreement (APTA) in order to promote Bangladesh’s exports to China and reduce the trade imbalance between the two countries.
The trade volume between Bangladesh and China reached $ 8.45 billion in 2012 whereas only three years ago the figure was less than US$ 3.0 billion. The volume was seven times higher than that of 2002. Both the countries have set the trade target at $10 billion.