China’s investment in backward industries is essential to reduce the trade deficit

To take advantage of duty-free access to the Chinese market, Bangladesh needs to attract investment in manufacturing-oriented industries and emphasize product diversification. To reduce the trade deficit of the two countries, backward industries should be developed in the country through Chinese investment.

Chairman of Research and Policy Integration for Development (RAPID) said this in an interview to Jago News on the development of bilateral trade relations between China and Bangladesh. Dr. MA Razzaq Said this. Interviewed by Chief Reporter and Special Correspondent of Jago News Ibrahim Hossain Abhi.

Jago News: What do you think needs to be done to increase exports to China?

MA Razzak: Although Bangladeshi products have duty-free access to the Chinese market, we are not able to utilize it fully. Although Bangladesh imports the highest amount of goods from China, our exports there are yet to reach one billion dollars. Bangladesh’s exports to the Chinese market have not reached the desired level. Because Bangladesh is not producing the kind of products that are required in the Chinese market or what it is doing is not enough. To exploit the duty-free advantage of China’s market, we need to create higher value products, diversify products and attract buyers.

In the Chinese market, our competing countries such as Vietnam, Cambodia and other countries have done very well. Compared to them, our position is very weak. Most of the countries that have done well in exporting to China have done so through Chinese investment.

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The Chinese market is huge. We need to know about their needs and product types. In this case, there is no alternative to China’s investment. Chinese investors have a good understanding of their market and are skilled in product development. If China’s investment increases, we will connect with their supply chain. As a result, our exports will increase and our capacity will also increase.

Apart from this, if we produce new products such as semiconductors, we will be able to export to many countries. In this case, when investment comes, I will get two types of opportunities. Technical knowledge will be acquired and employment will be created.

Jago News: What kind of investment attraction from China should be looked at?

MA Razzak: There are many opportunities for foreign investment in Bangladesh. On the other hand, China is a big investor. We have to think about the type of investment considering the international context. Investments that may have geopolitical and political implications should be carefully considered.

Since Bangladesh’s economy is largely export-dependent, it would be best to attract investment in manufacturing-oriented industries. It can be invested here and exported to other countries, while Bangladesh will benefit in acquiring technical knowledge.

The way we work is constantly changing due to the influence of technology. New technologies are being added to the production system. Therefore, initiatives should be taken to attract investment in technology development and efficiency enhancement projects. For example: Artificial Intelligence (AI) has new possibilities and challenges. China’s investment here is very important for us. We need to incorporate this new technology into the production system through technical assistance.

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Jago News: Debt or Investment? Which is important for Bangladesh?

MA Razzak: We are getting funding from China for various projects. These have helped a lot in developing our infrastructure. But to harness the benefits of improved infrastructure, we need to attract more than just credit, we need to attract investment and pay special attention to where increased investment will lead to our economic growth.

Jago News: How can Bangladesh reduce the trade deficit?

MA Razzak: We import more for export oriented industries. But our backward industry is weak. So there will be import dependency. Business costs may increase if we reduce imports from China and seek imports from other countries. On the other hand, exports may be hampered. Therefore, it is not necessary to reduce imports but to increase exports.

On the other hand, backward industries should be developed in the country through Chinese investment. It will have two types of benefits. We will get raw materials from domestic sources and exporting from here will increase our export earnings. Employment will be created and foreign exchange will be earned.

If we can attract large investments then it will be possible to eliminate the trade deficit to some extent by increasing exports.

So if we can develop the commercial relations and friendship between the two countries then the bilateral trade will go to new heights.

Jago News: Thank you.

MA Razzak: Thanks also to Jago News.