China-Asia’s largest economy, has decided to give duty-free export to 98 percent of Bangladesh’s products, including leather and leather goods. 383 new items were added to the list.
From now on, a duty-free facility will be available for the export of 8,930 Bangladeshi products in the Chinese market.
Letter of Exchange will be issued by Bangladesh and China to implement this additional facility.
Meanwhile, the Chinese Ambassador to Dhaka Li Jiming has signed the agreement on behalf of the Chinese government.
It is learned that the Ministry of Commerce of Bangladesh is also preparing to sign it.
China has increased duty-free export facilities for Bangladeshi products. From now on, Bangladesh will get duty free facility on 98% of the tariff line products for export to China.
According to sources, the pace of export of goods to China has not been increasing much for a long time.
The Corona epidemic in 2020 was when the country was in a deep economic recession.
Uncertainty and frustration prevailed among other exporters, including garments. At the same time, on 16 June 2020, China offered Bangladesh unconditional access to 97% of its products (8,256 products) duty-free and quota-free access, giving China unique cooperation or unique opportunities.
Which opens up new avenues for the export of goods to the Chinese market.
It facilitates the country’s export trade.
Besides, the friendship between the two countries deepened due to the huge tax exemption given to Bangladesh.
And in this continuity, the duty-free facility for the export of 383 new products will presumed to take the friendship between the two countries to a new height and more so will be a great opportunity for Bangladesh.
This is especially good news in this difficult time of the Corona epidemic. According to them, the step will expand export trade. Besides, the trade deficit between the two countries will come down.
According to experts, China is a huge potential market with a population of 1.4 billion. With the economic development, the purchasing power of the people of this country is increasing and so is the cost of production.
If 98% of the products in the Chinese market are given duty-free access, almost all the products with the export potential of Bangladesh, including ready-made garments, will be able to enter China without duty-free quotas.
As a result, exports to China are expected to grow significantly which will play an effective role in reducing trade inequality in Bangladesh.
The government and business community should plan as soon as possible how to use this opportunity.
China has given a great opportunity to Bangladesh. It will expand the export trade between the two countries.
It has been financing big projects before.
But we must be careful not to become dependent on them in any way.
According to high placed sources, in 2020, China granted duty-free export to 97 percent of Bangladesh’s products, effective July 1 of that year.
Under this, 8547 products of Bangladesh have got duty-free export facility.
In other words, China is giving new duty-free facilities to 383 more products of Bangladesh.
However, some items of leather and leather products, one of the main exports of Bangladesh to China, were out of the duty-free facility.
It is learnt that this time these products have also been included in the duty-free list.
The items of leather and leather goods are included in Chapter 48. Among the products under this chapter, earlier 8 products had the duty-free facility, the number of products in this chapter has increased considerably in the new list.
The main market for leather tanneries in Bangladesh and leather products produced in Bangladesh is China.
Leather products exported to European countries are produced by importing leather from abroad.
Therefore, duty-free facilities of Bangladeshi leather and leather products in the Chinese market will play a role in increasing the exports of this sector.
China’s decision to include leather and leather goods in the list of duty-free facilities was positive. China’s imports were declining due to the Corona situation. In this case, the duty-free facility in the Chinese market will be a blessing for Bangladesh.
According to the media reports, the Chinese embassy in Dhaka on January 12, 2021, handed over a note to the Commerce Ministry requesting Bangladesh to sign a letter of exchange to implement the 98 percent duty-free facility.
In addition to the economic development of China and Bangladesh, in order to strengthen the economic and trade relations between the two countries, the Chinese government will provide duty-free access to goods produced in Bangladesh.
The letter further said that it would be a great thing if the Bangladesh government would soon sign this letter of exchange so that the people of Bangladesh could benefit from this special initiative and duty-free facility.
Under the 97 percent duty-free facility provided by China, the main export products covered 99 percent of the total exports of Bangladesh, including all items in the garment sector.
However, several items of leather and leather goods were out of the list, which would benefit Bangladesh if included now.
The increase in China’s duty-free facility for Bangladeshi products by 1 percentage point was significant not only from a commercial point but also from a global political point of view.
As a single country, Bangladesh imports the most from China. But Bangladesh’s exports to the huge Chinese market are very low.
Although the duty-free export facility has increased since the first day of the last financial year, Bangladesh’s exports to China have not increased much.
According to the Bangladesh Bank, Bangladesh’s imports from China last fiscal year amounted to about 13 billion, which is one-fourth of the total import expenditure of Bangladesh.
At the same time, Bangladesh’s exports to China amounted to 681 million. This is 13.42 percent more than the previous financial year.
During July-December of the current 2021-22 fiscal year, Bangladesh’s exports to China amounted to 357 million.
Bangladesh’s main exports to China are oven garments, knitwear, home textiles, leather and leather products, footwear, jute and jute products, and plastic products.
China is a big country and also a country with large economy.
The world’s biggest brands work in China. China’s domestic market is also much larger.
This facility will expand the export trade. China will also increase investment in Bangladesh.
It will produce products here which will also create employment opportunities for Bangladesh. The trade deficit between the two countries would be reduced.
It may be recalled that on July 1, 2010, China was the first to grant access to the least developed countries to the duty-free quota-free market.
Initially, under this facility, 33 least developed countries, including Bangladesh, get duty-free access to 60 percent of China’s tariff lines.
But an examination of whether China’s facility is conducive to Bangladesh’s export potential shows that many products that Bangladesh’s export potential is not included in the list of duty-free facilities.
In this context, the Ministry of Commerce requested China to provide duty-free access to export potential products for Bangladesh.
At the request of Bangladesh, China signed the letter of exchange.
After lengthy negotiations, on June 17, 2020, China issued an order granting Bangladesh unconditional access to 97% of its products (6,256 items) duty-free.
As a result, all potential products of Bangladesh will get duty-free quota-free access to the Chinese market, effective July 1 of that year.
Now Bangladesh may benefit from this offer if it utilizes this properly.
The trade relations between China and Bangladesh would be further strengthened.