China pledges duty-free access till 2028, help relocate manufacturing to Bangladesh
Aside from duty-, quota-free access, a range of other issues, including the Rohingya crisis, was also discussed
On the second day of his visit to China, Chief Adviser Muhammad Yunus secured a commitment for Bangladesh to enjoy duty-free and quota-free access to the Chinese market until 2028. He also discussed relocating Chinese manufacturing plants to Bangladesh.
During their meeting, Chinese Vice Premier Ding Xuexiang confirmed that China will continue this trade benefit for two years beyond Bangladesh's transition from a Least Developed Country to a middle-income economy.
Beijing is also keen to start free trade negotiations with Dhaka, he said at the meeting with Yunus, who is attending the ongoing Boao Forum for Asia Annual Conference 2025 in Boao, China.
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Xuexiang told Yunus that "President Xi Jinping attaches tremendous importance to your visit." He also expressed hope that Bangladesh would prosper and grow under his leadership.
In a separate meeting, Chairman of China Export-Import Bank Chen Huaiyu said his bank would support the relocation of Chinese manufacturing plants to Bangladesh to make the country a platform for export to other nations.
The China Exim bank is a key financier of Beijing-funded infrastructure and energy projects in Bangladesh, but this is the first time it showed interest in supporting investment from Chinese private manufacturers in the South Asian country.
Muhammad Yunus also delivered his speech at the Boao Forum for Asia Annual Conference, where he said Asia must step up and strengthen cooperation in four key areas – financial, trade, food and agriculture, and technology, stressing Bangladesh faces multiple challenges which are shared by other Asian countries.
"In this changing world, the destinies of Asian countries are intertwined. We must chart a clear roadmap for a shared future and shared prosperity," he added.
Chief Adviser Yunus left Dhaka for China on Wednesday on a four-day official visit. After speaking at the Boao Forum for Asia Annual Conference and joining at least eight events, the chief adviser arrived at Beijing tonight to hold bilateral talks with Chinese President Xi Jinping today. He is scheduled to return home on 29 March.
Due to increased tariffs on Chinese goods imposed by the Trump administration, Chinese companies are shifting their operations elsewhere. The Ministry of Foreign Affairs has indicated that attracting greater Chinese investment is a key focus of Yunus' visit to China.
Duty-free access
Despite China granting Bangladesh 99% duty-free access in 2022, the country has struggled to capitalise on this opportunity, with exports actually declining.
According to the Export Promotion Bureau (EPB), Bangladesh's exports to China in FY23 totalled $677 million, a slight decrease from $683 million the previous year, and well below $715 million in the prior fiscal.
International trade analyst and RAPID Chairman MA Razzaque said Bangladesh's inability to fully utilise the duty-free benefits offered by China stems from a lack of capacity.
He speculated that China may be extending the benefits for an additional two years as a result. "However, unless Bangladesh attracts foreign investment in the export sector, including Chinese investments, the benefits may not be fully leveraged."
Razzaque suggested that Bangladesh should consider negotiating a trade agreement with China to ensure extended duty-free access. Under WTO rules, free trade agreements with developed nations require 99% duty-free access, a standard that does not apply to agreements between developing countries.
"As China remains a developing nation, Bangladesh could secure extended duty-free benefits by negotiating a deal that includes duty-free access to 10% of products," he added.
Fund for modernisation efforts
Vice-Premier Xuexiang said his country would fund modernisation efforts of the Mongla Port and the Dasherkandi Sewage project.
The two countries also agreed to boost investment, trade and cultural ties, people to people exchanges as they mark 50 years since the establishment of their diplomatic relationships.
Dhaka sought Chinese support in an array of developments and livelihood projects, and also called for reduction of interest rates for Chinese loans from 3% to 1-2 % to Bangladesh.
It also sought a waiver of commitment fees on the Chinese-funded projects in Bangladesh.
Vice-Premier Xuexiang also assured Chinese funding for the purchase of four ocean-going vessels for Dhaka's state-run Bangladesh Shipping Corporation.
He said the Chinese government and its universities would grant more scholarships to Bangladeshi students.
During the meeting, the chief adviser reiterated Bangladesh's firm commitment to the One-China policy and said Dhaka takes pride in being the first South Asian country to join China's Belt and Road Initiative, CA's Deputy Press Secretary Abul Kalam Azad Majumder told UNB.
Relocating manufacturing plants in Bangladesh
At the meeting with Chairman of China Export-Import Bank Chen Huaiyu, Chief Adviser Prof Yunus said Bangladesh's strategic location and its human resources can transform the country into a manufacturing hub for top global companies both from China and elsewhere in the world.
He said he has invited top Chinese private manufacturers to relocate their factories to Bangladesh, saying his government would offer attractive benefits for the manufacturers and provide a trade corridor.
"Bangladesh can be complementary to China as far as manufacturing is concerned," Yunus said, adding the Interim Government is fast-tracking the construction of a Chinese Special Economic Zone in the Chattogram region.
He said Bangladesh was also building large new ports to serve not only its economy but also the landlocked countries of Nepal and Bhutan and India's seven north-eastern states.
Huaiyu said Bangladesh is perfectly located to serve both southeastern and far eastern Asia and also the Middle East and Western Asia.
He said that more and more Chinese companies are going global and his bank would support their investment in Bangladesh and develop its manufacturing sector.
The China Eximbank would also support building infrastructures in Bangladesh to support the country's socio-economic and sustainable growth, he said.
Citing how Vietnam has transformed its economy by attracting Chinese and Western manufacturers, Chen said Bangladesh needs to improve its business environment in an effort to woo investors from China.
In response Prof Yunus said, "We will learn from Vietnam."
During the meeting, Bangladeshi officials also sought quick disbursement of Exim Bank's funding and support in new infrastructure projects such as the Dasherkandi Sewage plant. They also urged the bank to reduce the bank's commitment fees, which raise project costs.
Huaiyu said his bank would look into the proposals. He urged Bangladesh to switch to taking more concessionary loans in RMB, the Chinese currency.
CA's speech at Forum
While delivering his speech at the Boao Forum for Asia Annual Conference, Chief Adviser Yunus stressed the need for a sustainable financing system, stronger trade cooperation, and resource-efficient farming to enhance food security.
He urged Asia to embrace tech-driven, climate-smart agriculture and build a more inclusive digital ecosystem.
Yunus called for mobilising youth and intellectual resources to shape a self-sustaining society and promote a zero-waste lifestyle. He highlighted social business as the future, where innovation meets responsibility.
Addressing financial challenges, he warned of rising debt and slow SDG progress, noting that corruption costs developing nations $1 trillion annually. He urged Asia to unite in asset recovery efforts.
On food and energy security, he stressed resilient supply chains and increased investment in renewables. He also underscored the importance of health, education, and digital skills for future economic growth.
With global tensions rising, Yunus said Asia, as home to 60% of the world's population, must lead in shaping new policies and strengthening regional cooperation.
The chief adviser also highlighted the Rohingya issue, saying Asian leaders must come together to ensure their safe and dignified repatriation to their home country, Myanmar.
The protracted crisis in Myanmar threatens regional stability, he said.
