China expected to become important trade partner of Bangladesh: expert

The miraculous growth performances and development history of China offer an opportunity of learning for Bangladesh, an expert said.

While most developed economies including the United States, Britain and the European Union experienced falling output due to the COVID-19 pandemic, China showed its resilience by maintaining growth momentum last year, Abdur Razzaque, research director of leading local think-tank Policy Research Institute of Bangladesh, said at a recent virtual discussion.

It has emerged as a major global economic power having achieved remarkable transformations of its economy and in the process of becoming the world's largest exporter and one of the most important sources of foreign investment, he said.

Considering the geographic proximity and strong economic prospects of Bangladesh and China, Razzaque said that China is expected to become an even more important trade and development partner of Bangladesh in the coming years.

Bangladesh's impending graduation from the group of least developed countries (LDCs), set to take place in 2026, testifies to its solid economic development process, he said.

Effectively dealing with COVID-19, revitalizing the export-led growth process, and a renewed dynamism in investment activities are amongst the most important drivers that can put Bangladesh back in its recent track record of high economic growth, poverty alleviation, and making progress on achieving Sustainable Development Goals (SDGs), said Razzaque.

As Bangladesh aims to become an Upper Middle-Income Country (UMIC) by the 2031 fiscal year, and a High-Income Country (HIC) status by the 2041 fiscal year, he said China could be an important trade and development partner supporting Bangladesh's growth prospects and economic transformation in a post pandemic world.

As part of its unilateral market access schemes for LDCs, the Chinese government has allowed Bangladesh exports to China Duty-Free Quota Free access for 97 percent of its tariff lines from July 1, 2020.

Under this initiative, 8,256 Bangladeshi products enjoy zero tariff for exports to China, Razzaque said.

The researcher, however, underlined the need for establishing a full-fledged free trade agreement (FTA) with China to retain the available market access to the Chinese market.

Bangladeshi Commerce Minister Tipu Munshi has recently said a memorandum of understanding had been signed between the ministries of commerce of the two countries on Launching a Joint Feasibility Study of China-Bangladesh Free Trade Agreement in October 2016.

He said FTAs help to enhance competitive advantage, increase market access for goods and services, strengthen investors' confidence and to a large extent, build Bangladesh's economic sustainability.

"Although some progress had been made, still we need to put lots of effort to conclude the negotiation and materialize the prospect of the FTA," said the minister.