Thanks to the ‘Made in China 2025’ strategy, Beijing’s been pursuing a transformation blueprint to move up the value chain for some time now, leaving in its wake, huge business opportunities in RMG and textiles! Adding to which is the spiralling production cost and labour wages in China, which have paved way for countries like Bangladesh to take advantage of.
Banking on its massive human resource and cheap labour, Bangladesh’s prospects are not restricted to the global arena only, where it can effectively fill in the business vacuum left by China. Even the Chinese domestic market is equally promising! As per a Euromonitor forecast, China is expected to overtake United States to become the largest apparel market by 2019 globally (by then, the annual apparel sales in China is pegged to touch US $ 3,33,312 million).
Keeping pace with this, Bangladesh has been making steady inroads into China. In 2016-17, the country’s apparel export to China witnessed a significant rise of around 14.77 per cent Y-o-Y to reach around US $ 400 million. However, during the period of July-March 2018, earnings slipped marginally by 5.65 per cent to touch US $ 269 million, compared to what was US $ 285 million in the corresponding period of previous year.
So just when the industry was busy figuring out on what went wrong, came in the big news – China cuts tariffs on imports from Bangladesh. The provision, which has come into effect from July 1 2018, could not have come at a better time for Bangladesh.
Though the Chinese cabinet’s decision is primarily to remove tariffs on soybean from five countries- Bangladesh, South Korea, India, Laos and Sri Lanka, the tariff cut is also applicable for agricultural products, medical supplies, clothing, etc. Even Soybean meal will be exempted from the tariffs.
“Apart from South America, I consider China as the second-most potential market from Bangladesh’s perspective. We stand very good chances to benefit from the Chinese market if we can grab the opportunities that are around,” maintains Rafiqul Haq Parosh, Managing Director of Versatile Apparel Pvt. Ltd.
ForMd. Aminul Islam, CEO of City Apparel Tex and Secretary General of the Bangladesh Garment Buying House Association (BGBA), China’s role is very pivotal from Bangladesh’s perspective. Speaking to Apparel Resources, he avers, “I am very upbeat about the Chinese domestic market, which would be around US $ 150 billion in size. If we can capture China, our dependence on other markets can be balanced out accordingly.”
With Bangladesh’s exports to once its biggest market, USA, bordering on the erratic lately, and the long-term repercussions of Brexit on the UK and European Union markets open to conjectures still, Aminul’s views on China playing the balancing act, seem pertinent.
China slashing tariffs on imports from the five Asian countries is seen by experts as a move to strengthen its defences in the ongoing ‘trade war’ with the United States. But there is no denying that Beijing’s move has opened up a new window of opportunity for Bangladesh.
“My target now is to get some Chinese buyers as Chinese domestic market is very promising and they have already started importing from Bangladesh,” quips Md. Moqbul Hossen, Managing Director of Macro Style, underlining his future plans where China figures prominently in the scheme of things.
Even the President of the country’s apex exporters’ body, BGMEA, seems equally optimistic about China. “Exploring new markets has become very critical for growth; there is a big market each in Russia and China…We know China has a very big domestic market. Despite their significant global presence, we can find some space there for us,” Siddiqur Rahman had briefed to Apparel Resources earlier.
Now that China has set the ball rolling, hope the Bangladeshi exporters are gearing up to lap up this big opportunity!