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China to become key RMG export market for Bangladesh

Publication Date : 03-09-2012


Bangladeshi readymade garment exports can hit the one billion dollar-mark within the next few years due to China shifting their production focus from basic to high-end garment items.

“Since Bangladesh is a strong player in the basic segment of the market, it can grab a share of the 1.3 billion Chinese customers,” said Feng Dehu, vice-president of China National Garment Association, who is currently leading a high-powered Chinese business delegation to Dhaka.

China, the leader in global apparel exports, is increasingly shifting its focus to manufacture of high-end garment items due to spiralling wage rates.

As a result, the country has become an attractive market for Bangladeshi readymade garment (RMG) products, Dehu purported, adding that the Chinese middle-income group are now being catered by imported garment items.

“So, it will not be difficult for Bangladesh to export one billion dollar worth of garment items to China in the next few years,” Dehu said.

China's annual garment output clocks upwards of US$300 billion, according to Dehu, and their garment exports in 2011 stood at $143 billion.

“Given the current state of the Chinese market, one billion dollar worth of garment export is too small. I am hopeful the exports will be more,” Dehu said at a joint press briefing at the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) office in Dhaka.

At the briefing BGMEA president Shafiul Islam Mohiuddin said Bangladesh exported $102 million worth of garment items to China last fiscal year, which was almost zero as recently as the fiscal 2008-09.

On July 1, 2010 the Chinese government offered duty-free facility to 4,721 Bangladeshi products, mainly garment items, after which exports to China have been on a steady rise.

China is not only important to Bangladesh as an export destination, but of late it has become a source of foreign direct investment as well.

“A number of Chinese entrepreneurs are coming to Bangladesh to set up garment and textile factories,” the BGMEA chief said.

Bangladesh's RMG exports are still concentrated in the North American and European region, with the percentage being upwards of 87 per cent, according to Mohiuddin.

“It is a high-risk factor for the sustained growth of our industry. Unforeseen phenomenon like the global recession is also a major source of risk, given the overwhelming market concentration.”

Commerce Minister G.M. Quader assured the visiting Chinese business delegation of all the support necessary for setting up factories in Dhaka.

“We need to diversify both of our products and market,” Quader added.

In fiscal 2011-12, total exports to China from Bangladesh stood at $320 million, while imports registered were $5.9 billion, BGMEA data suggest.


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