1. China-Bangladesh bilateral trade has grown rapidly
In recent years, bilateral trade between China and Bangladesh has grown rapidly. According to Bangladeshi media reports, China is considering increasing the scope of its zero-tariff policy on Bangladeshi products to maintain and further accelerate this momentum.
At a China-Bangladesh bilateral meeting held in Dhaka at the end of September, Chinese Ambassador to Bangladesh Li Jun revealed that “China is considering increasing the scope of zero-tariff treatment for Bangladeshi goods, which is expected to be raised from the current 65% to 97%.” He said that with the deepening of economic globalization and regional integration, China-Bangladesh bilateral cooperation in various fields is facing huge opportunities. The economies of China and Bangladesh are highly complementary. Despite the weakening global economy in recent years, bilateral trade and investment between the two countries have maintained a rapid growth momentum. The trade volume between China and Bangladesh has reached 4.2 billion US dollars, an increase of more than 30% compared with the same period last year. China will make greater efforts to continue to promote all-round bilateral cooperation between the two countries. China proposed the China-India-Bangladesh-Myanmar Economic Corridor earlier this year, which will bring unprecedented development opportunities to Bangladesh. He called on all friends of Bangladesh to continue to join hands with China and make unremitting efforts for the well-being of the two peoples.
2. Current status and development trends of Bangladesh’s textile and garment industry
(1) Current Situation of Bangladesh’s Textile and Garment Industry
The textile and garment industry plays a very important role in Bangladesh’s economy. The industry accounts for approximately 38% of the total industrial output value, 75% of export earnings, and employs more than 4.8 million people, most of whom are women. The textile and clothing industry is the main source of customers for Bangladesh’s banking, insurance, and shipping industries, and drives transportation, hotels, beauty, cosmetics and other related industries, providing about 800,000 job opportunities in the textile, clothing and machinery accessories industry, and the resource recycling industry About 200,000 jobs.
1. Current situation of Bangladesh’s textile industry
In terms of the development and production system of Bangladesh’s textile and garment industry, the textile industries such as spinning, weaving, dyeing and finishing, which belong to the upper and middle reaches, are weak links, and are inferior in terms of export value and employment. The clothing industry is important. According to statistics, Bangladesh currently has more than 200 spinning mills with a yarn production capacity of approximately 500 million kilograms per year. Among the more than 200 spinning mills, about 40% have backward technology and very old equipment. They need to replace equipment immediately and improve the level of production technology. Bangladesh has more than 350 large and medium-sized loom weaving factories and more than 1,000 small power weaving factories. It has more than 40,000 power looms, but only about 1/4 of these looms are looms. It is a modern shuttleless type. In addition, Bangladesh has more than 500 knitted fabric dyeing and finishing factories and more than 300 woven fabric dyeing and finishing factories, with an annual processing capacity of about 2.5 billion meters.
2. Current situation of Bangladesh’s garment industry
The garment industry is a pillar industry in Bangladesh, contributing 10.5% to Bangladesh’s GDP. It also makes a huge contribution to export earnings and employment.
According to official statistics of Bangladesh, there are currently more than 4,000 large and small garment processing enterprises in Bangladesh (including about 600 large garment processing enterprises), directly employing 1.8 million people (most of whom are women), and absorbing about 50% of the industrial sector. labor force. At the same time, Bangladesh’s proportion of ready-made garment exports in total exports has gradually increased from 6% in the 1980s to 75% currently, becoming the most important source of foreign exchange for this poor and backward country. Therefore, the rise and fall of the garment industry directly affects the development of Bangladesh’s economy and the livelihoods of millions of people in Bangladesh. It can be said to be the lifeline of Bangladesh’s economy.
(2) Development Trend of Bangladesh’s Textile and Garment Industry
As the pillar industry of Bangladesh, the textile and garment industry has received full attention from the Bangladesh government. In recent years, the Bangladeshi government has been actively seeking various channels to obtain preferential trade policy support from textile export destination countries. On the other hand, the Bangladesh government is actively implementing the “Act East” policy and working hard to open up markets for Bangladeshi textile products in East Asia and Southeast Asian countries.
3. Analysis of pros and cons of domestic enterprises investing in Bangladesh textile industry
(1) Main favorable factors
1. The Chinese government’s support for textile enterprises’ “going global” strategy
The Chinese government has been attaching great importance to the “going out” of enterprises for many years, especially actively guiding and promoting the overseas investment of textile enterprises. To this end, the country has formulated a series of policies. “Notice on Relevant Policies to Promote my country’s Textile Industry to Transform Foreign Trade Growth Mode and Support Textile Enterprises’ “Going Global””. Supporting the construction of overseas textile industrial parks mainly includes formulating special policies for interest discounts on loans for park construction, providing special subsidies to park construction enterprises for the flat land, special workshops and public service facilities provided by the park construction enterprises for the textile enterprises entering the park, and providing special subsidies for the park construction enterprises to provide for the construction of textile enterprises entering the park. Textile enterprises will be given fixed subsidies for providing services to guide textile enterprises to enter in clusters. Support strong textile companies to “go global” and invest and set up factories overseas to diversify their origins. Focus on encouraging textile and garment enterprises with supporting infrastructure to enter overseas textile industrial parks to invest and set up factories in clusters. Provide subsidies for enterprise technology research and development, consulting services, feasibility studies and project evaluations, intellectual property protection, and upfront expenses related to “going out” to reduce the investment costs of textile enterprises entering the park. For enterprises in�Huge demand for raw materials and textile machinery
(1) The large gap in textile equipment, yarn and cloth in Bangladesh brings opportunities to our company
Bangladesh’s domestic supply of raw materials such as cloth and yarn is insufficient. The output of cloth products in Bangladesh has experienced double-digit growth almost every year. Due to strong market demand, only about 50% of the demand can be met. In order to narrow the gap between supply and demand, Bangladesh will invest in itself or attract foreign investment to establish a series of spinning and weaving factories in the future. This will undoubtedly bring huge benefits to my country’s spinning enterprises. investment opportunities.
(2) Chinese textile machinery has broad market prospects in Bangladesh
China’s textile machinery industry has developed very rapidly in recent years. Not only the spinning frame, but also other equipment such as blowing and carding machines, combing machines, draw frames, roving frames, winding machines and certain chemical fiber equipment, etc., in terms of product quality and reliability. All aspects can fully meet the needs of Bangladeshi customers. At present, many textile factories in Bangladesh use equipment from Germany, Japan and other countries. Although the performance is superior, it is expensive. Since Chinese textile machinery has an absolute competitive advantage in terms of price, it is expected to occupy an increasing share in the Bangladesh textile machinery market.
(3) China’s dyeing and finishing industry has a promising market prospect in Bangladesh
The production capacity of wide-width fabrics and knitwear and post-printing and dyeing finishing capabilities are seriously insufficient. While the contradiction between the abnormal development of cotton, cotton yarn and weaving capabilities has not been alleviated, the contradiction between the large amount of gray fabrics in urgent need of processing and the serious lack of finishing capabilities after printing and dyeing has become increasingly prominent. What is embarrassing is that in order to obtain the certificate of origin, garment processing enterprises in Bangladesh have to use more than 70% of local raw materials. Because the large amount of gray fabrics processed or imported by Bangladesh cannot be processed and treated as they should be, garment processing enterprises are often unable to Meeting fabric demands for apparel production results in delivery delays. According to statistics from the Bangladesh Garment Manufacturers and Exporters Association, Bangladesh still has a dyeing and finishing gap of more than 2 billion square meters that needs to be filled, which leaves a large space for my country’s dyeing and finishing companies to move.
(3) Main disadvantages
1. Bangladesh relies on imported textile raw materials
Bangladesh has a small land and a large population, and farmers are simply unwilling to plant cotton on their limited land, resulting in heavy reliance on imported spinning raw materials. This is the biggest problem encountered by the development of Bangladesh’s textile industry. According to statistics, 95% of the cotton used in Bangladesh’s textile industry, 80% of the yarn used for weaving, and more than 70% of the gray fabric used for printing and dyeing must be met through imports. Therefore, the supply of textile raw materials in Bangladesh relies heavily on the import market. If the cotton supply in the international market is tight, it will inevitably lead to a tight supply of local fabrics in Bangladesh. Garment investment companies in Bangladesh will face the embarrassment of having to import a large amount of fabrics but having difficulty in obtaining certificates of origin. situation.
2. Bangladesh’s infrastructure is seriously backward
Bangladesh’s water, electricity, gas supply, transportation, ports and other infrastructure are weak. The Asian Development Bank calls Chittagong “a choke point in the supply chain”. The average time a container stays in port is 15 days. In the event of port congestion or worker strikes, goods may not be shipped or picked up for more than 30 days. In order to abide by the contract and deliver goods on time, exporters sometimes have to choose air transportation, which often causes large losses to export companies.
Electricity supply is in short supply, and production activities are often suspended due to power outages. Because once the dyeing and finishing equipment is shut down, uneven dyeing will occur. In order to solve the power supply problem, almost all textile companies in Bangladesh independently use natural gas to generate electricity. Natural gas power generation is cheap and has solved the power supply problem for now, but this is far from a long-term solution because Bangladesh’s natural gas supply is tightening. If new gas fields are not discovered and exploited, Bangladesh’s natural gas supply will be almost exhausted by 2015. .
3. Workers in Bangladesh go on strike frequently
Strikes have been frequent in Bangladesh in recent years, especially in the export processing zones. There are many reasons for strikes, sometimes because workers demand a raise, sometimes because employees are abused or unreasonably fired. According to United Nations estimates, Bangladesh’s annual losses due to strikes account for 4% of GDP.
4. Bangladeshi government officials are procrastinating
Corruption among Bangladeshi government officials is endemic. Although the current interim government has implemented a vigorous anti-corruption campaign after taking power, resulting in the collapse of a large number of officials involved, it has not fundamentally reversed the corruption habit. Starting a business in Bangladesh requires contacting government officials at different levels, such as purchasing land, opening a telephone, applying for a business license and a work permit for foreign employees, etc. It will probably take more than half a year to complete these procedures.
5. Financial services in China and Bangladesh need to be improved
The amount of investment in setting up factories overseas is relatively large, and the company’s own strength is limited, so it needs to obtain bank loans. Although there is interest subsidy support from the Chinese government, the loan conditions of domestic banks for long-term investment of companies are still relatively stringent, which does not truly reflect the need for “going global” companies. Preferential financing arrangements. For example, enterprises are required to have both financing guarantees and capital verification certificates, overseas investment loans for new assets are not recognized, and the repayment period of long-term loans is too short, etc., resulting in some enterprises being unable to receive effective financing support.
