Business | Bangladeshi and Chinese firms ink deals worth US$13.6 billion
China's President Xi Jinping (L) shakes hands with his Bangladeshi counterpart Abdul Hamid after arriving in Dhaka on Friday.  Xinhua/via Reuters
China's President Xi Jinping (L) shakes hands with his Bangladeshi counterpart Abdul Hamid after arriving in Dhaka on Friday. Xinhua/via Reuters

Bangladeshi and Chinese firms ink deals worth US$13.6 billion

President Xi Jinping's visit also marked by US$20 billion in loan agreements to indicate growing ties between Beijng and Dhaka

DHAKA, October 14, 2016 3:32 PM (UTC+8)

Bangladeshi and Chinese firms have signed US$13.6 billion in trade and investment deals on the sidelines of President Xi Jinping’s brief tour to the South Asian nation, a trade group official said on Saturday.

The deals are in addition to US$20 billion in loan agreements that the two governments signed on Friday, in a mark of Beijing’s growing ties with Dhaka, which is a very close ally of regional power India.

“These trade and investment deals are between Chinese companies including some of their state firms and Bangladesh private sector. They are worth US$13.6 billion,” Abdul Matlub Ahmad, head of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), told AFP.

Ahmad said the deals reflect Dhaka’s improving security situation after Bangladesh launched a deadly crackdown on Islamist extremists following an attack on an upmarket restaurant in the capital in which suspected militants killed 22, mostly foreign hostages.

“The agreements send a positive signal to the rest of the world that Bangladesh is a safe haven as an investment destination. The Chinese investors are satisfied with the security situation here,” he added.

The deals were signed after the FBCCI, Bangladesh’s top trade and business lobbyist group, and the China Council for Promotion of International Trade (CCPIT) organised a two-day tete-e-tete between business officials of both nations on the sidelines of Xi’s tour.

“We will invest in investment parks. There are many entrepreneurs in our delegation who want to invest in this country,” CCPIT vice-chairman Chen Zhou said, according to local news portal bdnews24.com.

Chinese investors were considering investing in infrastructural development, leather, ready-made garments, pharmaceuticals, automobile and other sectors.

Bangladesh has already agreed to set up an industrial park exclusively for Chinese investors near the strategic port of Chittagong hoping it will attract manufacturers seeking cheaper labor than they can find at home.

As a mark of their deepening economic ties, the two nations on Friday also signed an agreement to conduct a feasibility study on a China-Bangladesh free trade agreement.

Dhaka has been so far reluctant to sign a bilateral FTA with China and instead sought unilateral duty-free and quota-free access for its products in the Chinese market, the world’s second largest economy.

Trade between the two nations is currently heavily skewed in China’s favor with Bangladesh exporting goods worth only about US$808 million last year while its imports from China stood at US$9.64 billion.

Xi concluded his visit on Saturday, flying to India to attend a BRICS summit of leading emerging nations.

His visit was the first in more than three decades by a Chinese president to Bangladesh, which lies firmly within New Delhi’s sphere of influence.

Xi hailed what he called a “historical turning point” in relations with Bangladesh after talks with Prime Minister Sheikh Hasina.

Impoverished Bangladesh needs tens of billions of dollars of investment in its transport infrastructure and energy production to boost its flagging economic fortunes and create jobs for its 160 million people.

 

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