Trade deficit widens as China floods domestic market

12 Mar '08

2 min read

A business meeting with delegates from China was held on March 11 by the Dhaka Chamber of Commerce and Industry (DCCI) at its auditorium at Motijheel in the city.

The meeting discussed trade gap between Bangladesh and China which is increasing at a rapid pace.

Last year itself, Bangladesh recorded a trade deficit of US $2.56 billion. This is mainly due to huge import of goods worth $2,534 million from China.

China, on the other hand, imported goods worth only $93 million in the year 2006-07. Experts believe that low cost Chinese products are making Bangladesh more and more dependent on imports of goods like raw cotton, machinery, knitted fabrics, man-made staple fibre and filament, equipment, fertilizer, organic chemicals, special woven fabrics and readymade garments.

Bangladesh in turn largely supplies jute, jute goods and chemicals to China. This is also one of the reasons that make bridging trade deficit an impractical prospect because the list of domestic export goods fall way too short compared to that of its trading partner.

Trade gap of more than two and a half billion dollars has been caused in just about six months. Besides, Chinese goods are not only price-competitive but also qualitatively superior when compared to those of India.

Local importers therefore cling to China for its easy trade procedure and speedy shipments.

Since Bangladesh has a very strong hold over its readymade garment and Knitting sector, China can cooperate to strengthen it further by attracting investments for textile and clothing industry. Jute based-textiles can also be explored to plan future expansions.

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