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Bangladesh-China-Economic Cooperation-Golam Rasul

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Bangladesh-China-Economic Cooperation-Golam Rasul

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  1. Bangladesh and China Economic Relations: Present and Future Paper presented on Seminar Organized by Department of Economics, IUBAT on March 6, 2024 Dr. Golam Rasul, Professor, Department of Economics, IUBAT

  2. Outline of the Presentation • Nature of the current economic relations between China and Bangladesh • Issues & Challenges • Future opportunities for expanding economic cooperation

  3. Economic Relations • China is an old civilization and long history • China has become a global economic powerhouse • China has made Miracles-Rapid Economic Growth, Industrialization & Poverty Alleviation • China-Bangladesh forging strong economic relationship- Spanning a wide range of sectors- trade, investment, connectivity, power, energy, health, education, technology. • China-BD economic cooperation has wider implications • It got attention from Academia & Practitioners- How to learn from Chinese Experiences?

  4. Patterns of Trade Relations • China is BD’s largest trading partner — trade US$ 29.13 billion, Export US$ 1.13 billion, imports 28.0 billion • About 25% of Bangladesh's imports come from China • China’s exports to Bangladesh have grown at a rate of 14.9%, Bangladesh’s exports to China increased at a rate of 11.8%. • China provides DF-QF market access to Bangladesh • Export to China increased from $55.2 M in 1995 to $1.13 billion in 2022.

  5. Top 5 Import & Export from China BD- top Five Exports to China BD- top Five Imports from China • Chinese imports are important for Bangladesh’s Consumers, Producers, Industries & Exporters. Bangladesh's exports to China are mostly Garments, Frozen & live fish, Leather & leather goods •

  6. Foreign Direct Investment (FDI) • Chinese FDI to BD increasing • Between 2016-22, Chinese state- owned & private companies invested nearly US$26 billion • In 2022, China emerged as the country's largest FDI provider- with investments USD 764.0 million. • About 15.8% of total inward FDI flow to Bangladesh. • Chinese Economic & Industrial Zone in Bangladesh • Investment in Dhaka Stock Exchange

  7. Main sectors of Chinese FDI in Bangladesh • Major Chinese FDI are in Textile & wearing and Power sectors

  8. Chinese Loan to Bangladesh • China -4th largest source of foreign loans in BD • Chinese loan in BD has increased after President Xi Jinping’s visit in 2016 • Beijing & Dhaka signed deals worth $21.5 billion, covering various power & infrastructure projects • China has invested about $9.75 billion in transportation projects from 2009 to 2019. • A number of projects are ongoing under BRI • Chinese loans now constitute about 7% of BD’s total outstanding foreign loans

  9. BD’s Debt Position with China as of June 21 •BD is the second largest recipient of Chinese loans under the BRI in South Asia • At present the total outstanding debt stood at USD 4.76 billion or 8.6% • Chinese loans are relatively costly than the World Bank, but still concessional - interest rates are below the commercial (market) rates • Grace period on average 5 years; repayment period on average 15 years

  10. Issues & Challenges • Reducing trade deficit- raising competitiveness & expanding exports • Managing Debt Burden: concern arises about the commercial viability of the some of the infrastructure projects & their debt sustainability. • Improving quality & governance of investment projects • Balancing geopolitics

  11. Future Opportunities • Changing world economic order. Emerging role of South-South cooperation- create new opportunities for BD-China economic cooperation for mutual benefits • Pursuit of Vision 2041: Bangladesh is set to graduation from LDC & aspire to be a upper middle income country by 2031 & Developed country by 2041- • Needs high economic growth & more investment • China’s BRI investments complement this vision- Leveraging Chinese Investment & Expertise

  12. Future Opportunities • Develop comprehensive economic partnership- identify areas for future collaboration • Find ways & means to reduce trade gaps • Strengthen collaboration in Research, Development innovation, business, joint venture • Promote partnership between the Institutions of the two countries- particularly Universities • Increased investment in Social Sector - Education, Health & Social Development, Climate mitigation to achieve SDGs

  13. Thank you

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