A GOLDEN GATE of opportunities for CHINESE businesses IN BANGLADESH

The current state of Chinese investment in Bangladesh


The volume of Chinese investment in Bangladesh reached $256.79 million in 2016, of which 55 percent went into textiles, according to the official data from Bangladesh's central bank. Meanwhile, Chinese companies also invested in other industries such as construction machinery, leather, chemical fertilizers, electricity, pharmaceuticals and so on.


Besides private companies, more and more State-owned enterprises have started to explore business opportunities here. And investors are entering industries such as electricity and manufacturing. Those sectors have full potential: for example, in the electricity sector, Chinese investment in plants that produce 1,320 megawatts of electricity has surpassed $600 million.


Also, establishing more industrial parks in Bangladesh will help Chinese companies enter the local market.




While China-Bangladesh ties attract attention, do any challenges remain?


Bangladesh is a country with a large population and a high density, and its abundant labor resources have become one of its advantages in attracting investment. China and Bangladesh are complementary in terms of economic development, and Bangladesh has become an important partner when China is shifting its labor-intensive sectors overseas and looking for more energy cooperation with other countries. The two countries have a strong intention to work together in infrastructure, telecommunications and textiles, which are all potential sectors.


However, as Bangladesh is less developed than most countries, it has limited natural resources and faces frequent natural disasters. The lack of infrastructure hinders its development. In addition, the Bangladesh government has to become efficient and it has to do more to ensure a safe environment for foreign investors.


Why Chinese firms are interested in investing in Bangladesh?


There are several reasons for this rising enthusiasm. First, the political situation in Bangladesh has been stable in recent years, and the country recorded about 6 percent to 7 percent economic growth rates. Second, the labor cost in Bangladesh is relatively low, which is a favorable factor for Chinese firms in labor-intensive sectors. Third, the Bangladesh government has come up with favorable policies to improve the business environment here. And last but not least, the two countries have been encouraging business and trade delegation visits, which provides opportunities for Chinese investors to get to know Bangladesh better.


What is the role that Bangladesh plays in the China-proposed "Belt and Road" (B&R) initiative?


Bangladesh has a strategic geopolitical position by connecting China, India and countries in the Association of Southeast Asian Nations (ASEAN), which is crucial for not only the B&R initiative but also the Bangladesh-China-India-Myanmar (BCIM) economic corridor plan. In 2016, President H.E. Xi Jinping visited Bangladesh, and they agreed to strengthen the bilateral relationship in such key areas as trade, production capacity, energy development, transportation sectors and infrastructure construction.


China is Bangladesh’s first largest import source. In the last couple of years, some Chinese companies have come with direct and joint investments in Bangladesh, reflecting their growing interest.


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