China hopes to open free trade with Bangladesh within two years

The Chinese envoy says the agreement would ease the way for Bangladeshi exports and reduce the trade deficit between the countries

Published : 28 March 2024, 02:44 PM
Updated : 28 March 2024, 02:44 PM

China is hopeful of signing a free trade agreement with Bangladesh by 2026.

A joint working group formed by the two countries has conducted a study for this purpose, said Yao Wen, the country’s ambassador to Dhaka.

Based on the data obtained from the survey, the two countries will work to raise the level of bilateral free trade in the future.

A draft of the report on the joint feasibility study was presented at a joint press conference organised at the Secretariat on Thursday.

Commerce Secretary Tapan Kanti Ghosh also attended the event.

“Many Bangladeshis ask me why China is interested in a FTA with Bangladesh,” said Ambassador Wen. “There are two reasons for this. Both countries want to simultaneously tackle economic challenges and ensure smooth development. Secondly, we want to take China-Bangladesh relations to greater heights.”

He was hopeful that the FTA would play a positive role in bilateral trade after Bangladesh transitioned from a less developed country to a developing country in 2026.

If the agreement is finalised, it will be easier to export goods from Bangladesh to China and the trade deficit between the two countries would also narrow, the Chinese envoy said.

“The FTA will also facilitate China's investment in Bangladesh. For these reasons, China is interested in completing the FTA with Bangladesh by 2026.”

China has signed 22 FTAs with 22 partners around the world. Both developing and developed countries are among their partners.

Ambassador Wen said that their partners had also benefited from the arrangement.

“We signed an FTA with the African country of Mauritius in 2019. The following year, the trade deficit between China and the country fell by 15 percent. In 2022, China signed an FTA with Cambodia. The following year, Cambodian exports to China jumped by 30 percent.”

China is working to expand its import of Bangladeshi mangoes, jute products, and leather products, he said.

“China has also encouraged the businessmen of the country to invest in Bangladesh.”

In addition to its role as a major trade partner, China is also one of Bangladesh’s largest development partners, said Secretary Ghosh.

“In the fiscal year 2022-23, the trade between the two countries stood at $24 billion dollars. Bangladeshi exports accounted for $600 million of this amount.”

“Although we have a massive trade deficit with China, there are some areas of common interest between the two countries where we can work together.”

After Bangladesh’s graduation from LDC status in 2026, it will face some challenges due to the removal of existing trade facilities, Ghosh said. In order to protect business from this challenge, the Ministry of Commerce has decided to seek FTAs with major trade partners.