Chinese investment booms in Bepza EZ: 24 deals signed, 34 more in pipeline

Chinese investment in Bangladesh's economic zones is rising, driven partly by tariff policies imposed by the USA and the competitive labour market, according to the Bangladesh Export Processing Zones Authority (Bepza).

So far, 41 companies from various countries have signed lease agreements to invest in the Bepza Economic Zone in Chattogram's Mirsharai, with 24 of them being Chinese firms.

Their total committed investment stands at $614.58 million, with four Chinese companies already in production. The overall proposed investment in Bepza EZ, including all foreign companies, stands at $867.22 million.

Bepza has also reported a strong pipeline of Chinese investments.

Between August 2024 and March 2025, Bepza received proposals from 34 potential Chinese investors. From July 2024 to March 2025, eight Chinese companies signed lease agreements, with a proposed investment of $153.82 million.

These companies plan to manufacture solar accessories, bags, luggage, light engineering products, readymade garments, silicon dioxide, flexible intermediate bulk containers and packaging.

Among these, YiXin Bangladesh Co Ltd is set to establish a shoe accessories manufacturing unit, while Home Joy Socks Bangladesh Co Ltd has committed $50 million for a socks and garments factory.

Four Chinese companies have already commenced operations within the economic zone.

Fengqun Composite Material Co (BD) Ltd, with an investment of $2.2 million, specialises in the production of shoe accessories and packaging materials.

Additionally, Kaixi Lingerie Bangladesh Co Ltd, KPST Shoes (BD) Co Ltd, and Mingda (Bangladesh) New Material Co Ltd are also contributing to the zone's output.

The combined investment from these four entities totals $147.55 million.

Bepza Executive Chairman Maj Gen Abul Kalam Mohammad Ziaur Rahman noted that rising production costs in China and potential increases in US tariffs on Chinese goods have led companies to seek relocation.

"Trump's China policy is a significant factor. If they have to pay extra tax, the price of their products in the American market will increase significantly. As a result, they will fall behind in competition," he said.

Adding that the workforce is decreasing in China and wages are increasing, the official said that the competitive labour market in Bangladesh is also attracting Chinese investors.

"To avoid this, some Chinese investors are looking to relocate their companies outside China. Bangladesh is their top choice among countries like Vietnam, Cambodia, Indonesia, Sri Lanka, and Myanmar," he added.

Challenges in investment

While Bangladesh seeks to attract foreign investment, water scarcity in the Bepza Economic Zone in Mirsharai has forced authorities to reject investment proposals from water-intensive industries.

"A Chinese investor proposed a $135 million investment for a textile company, but we had to decline as we could not provide the required water," Ziaur Rahman stated.

While gas and electricity are not an issue in Mirsharai, water availability remains a major challenge.

Bepza has already allocated 249 plots to 42 companies, prioritising those that require minimal water use.

To address the issue, the organisation has constructed a 45-acre lake to store rainwater and is implementing rainwater harvesting requirements for companies operating in the zone.

However, the Bepza ED added that the existing factories in production are not currently facing any water scarcity.

Future prospects

Bepza expects Chinese investment to continue diversifying beyond readymade garments into sectors such as renewable energy and raw material production for solar panels.

The Bangladesh Investment Summit-2025, scheduled for 7-10 April, is expected to attract further Chinese interest.

At a press conference on 23 March, Chowdhury Ashik Mahmud Bin Harun, executive chairman of the Bangladesh Investment Development Authority (Bida) and the Bangladesh Economic Zones Authority (Beza), highlighted that rising US tariffs on Chinese goods have increased Chinese interest in Bangladesh.

"When we speak with the Chinese business community, they indicate growing interest in setting up factories here," Ashik stated.

China remains Bangladesh's largest foreign investor, particularly in renewable energy and advanced textile manufacturing.

Notably, Chief Adviser Prof Muhammad Yunus, currently on a visit to China, urged Chinese business leaders to invest, highlighting Bangladesh as a hub for regional and global trade.

Bepza manages eight operational Export Processing Zones (EPZs), including Chattogram, Dhaka, Mongla and Ishwardi.

Recent Bepza data indicates Chinese firms have invested $1.6 billion in 107 industrial units within these EPZs, generating 133,000 Bangladeshi jobs.