China next big market for Bangladeshi apparel

China, the world's largest apparel supplier, has become a major export destination for Bangladeshi ready-made garment (RMG) makers.

Increasing manufacturing cost is making China shift its sophisticated and heavy industries production.

Bangladesh's apparel exporters are widening and deepening their businesses with China because of geographical proximity to the Asian giant and better prices.

The Chinese government has been providing Bangladesh with a preferential trade benefit since 2011.

Under this package, Bangladesh is enjoying duty-free access for the export of more than 5,000 products – most of which are apparel items – which is a major boost for Bangladesh's export to China.

Bangladesh's apparel export to China grew by 860 percent in the last 10 fiscal years, amounting to $506.51 million.

The export earnings were only $52.81 million in 2010-2011, according to the Bangladesh Export Promotion Bureau.

Based on the year-on-year calculation in 2018-19, the growth was 29.33 percent.

With a growth of 10.60 percent, the export earnings stood at $112.64 million in July-August of the current fiscal year, which was $101.84 million last year.

Bangladesh mainly exports cotton-based apparel items to China, including T-shirts, shirts, trousers, singlets, vests, breeches, anoraks, windcheaters, jerseys for men and boys, pullovers and blouses for women and girls.

The export items also include pullovers, anoraks, windcheaters of man-made fibre and some specialised garments for women, girls, and babies.

Bangladesh is doing great in exporting cotton-based apparel to China due to the country's rising production cost. The East Asian country is losing its competitiveness in the low-end segment of ready-made garment, said Mohammad Hatem, the first vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association.

China has a strong position in the non-cotton garment segment, Hatem said, adding that Bangladesh can export a T-shirt at $1.50 which would cost a Chinese company $3 to produce.

China is not willing to produce and further investment in lower-end products and the Chinese government is also discouraging the production of hazardous textile, and coal-based power plant products, Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue, said.

For the same reason, Chinese investment is also being relocated to countries like Vietnam, Bangladesh, Cambodia, and India.

Bangladesh has enjoyed a large-scale Chinese investment in the textile industry and coal-based power plants in recent years, Moazzem elaborated.

Chinese delegations are regularly visiting Bangladesh and the South Asian country is also looking forward to an "inward-looking region" to be a part of "Rising Asia", Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association, told The Business Standard.