Bangladesh is the second-largest apparel manufacturer in the world and China is the main trading partner for apparel manufacturing and trading. Recently China has opened a gateway for Bangladesh with a duty-free trading policy which is showing a new ray of hope for Bangladeshi manufactures. There is no doubt that the economy of Bangladesh has been critically hit by the COVID-19 where billions of dollars orders have been canceled but this trading policy is directing Bangladesh towards a quick recovery.
According to the new policy, 97% of Bangladeshi products will be tariff-free in the Chinese market which is a significant development in the trading facility. Usually, the Chinese market used to impose a high tariff on Bangladeshi goods that varied from 25 to 30 percent. On the other hand, this percentage was much higher than those of EU nations (12%) but in the recent development, 97 percent of the goods will get duty free export facility which is a great signal for the nation.
Due to this duty-free trading facility, the economic backbone of Bangladesh, the apparel industry will drive the most benefit to its economy. This year, the COVID-19 has pushed Bangladeshi apparel manufacturers into a very critical situation, so does the collective economic growth of the nation.
The experts of this sector are looking into a new hope for the already growing industry. Bangladesh will get advantage of the new policy and will be a step ahead to its competitors like Vietnam.
It has been several years, that China is focusing to build its industrial facilities in other nations like Bangladesh, Vietnam, and some other African nations including, Ethiopia and Kenya. Due to the rising labor issue and production cost, both the Chinese government and private companies had to look for an alternative and in response to that, Chinese companies are shifting their manufacturing facilities in countries with low labor costs.
On the other hand, China is now the largest apparel market in the world. And due to the thriving middle class with increasing purchasing power, fashion consumption has grown significantly. To feed the consumers, China needs higher production of its own brands and Bangladesh is the most favorite place to produce. Like the EU, if Bangladesh can capture the majority percent export market to China, the apparel industry is going to win over all the other global manufactures and this new trade facility is the largest signal.
Under the agreement of the APTA (Asia-Pacific Trade Agreement), the local exporters can get the benefit from this month which has been accepted by the agreement and China bilaterally.
This agreement is not only for the apparel industry but also for many other industries like pharmaceuticals and some traditional goods and this is going to be the golden opportunity for Bangladesh to regain its economic balance.