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Rising Apparel Exports to China a Sign of New Opportunities for Bangladesh Apparel Export

Rising Apparel Exports to China a Sign of New Opportunities for Bangladesh Apparel Export

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Due to duty free trade privilege, Bangladesh has exported $391.59 million apparel products to China in 2016-2017 fiscal year which indicates a boost of 14.77 percent than the previous period. So, Bangladeshi exporters are seeing an enormous opportunity in China.

China has been ruling the apparel industry for long and due to the rise of middle-income household it is becoming a major export destination for Bangladesh.

Because of the shortage of the skilled labor, Chinese garments manufacturers are shifting from basic to high end product manufacturing which is opening a gate for Bangladesh.

Both the international and domestic manufacturers are also moving for Chinese retailers for short lead-time and better prices.

Exporters are also focusing on Chinese market because this huge market can be a better alternative if when the traditional market like USA, Europe and Canada are falling.

Despite the global recession during 2008-2009, Bangladeshi exporters got a huge boost due to increased shipment facility to China while the global trade got a significant damage.

Bangladeshi exporter and Director of Ananta Group Asif Zahir expressed, “Garment Export from my group has been maintaining 10% growth every year to China”. 

He also said that he exported mainly denim and trousers worth of $15 million last year and H&M, GAP and Zara are the main buyers from Chinese market.

Zahir further added, “We need strong marketing for the Chinese market. We have a very strong potential in the Chinese market.” The businessman argued that China produces high quality jackets and lingerie and because of that export of such products are not that high from Bangladesh. Despite the fact, the growing Chinese middle-class are the main customer for Made-in-Bangladesh products.

In China, demand for Bangladeshi garment products is increasing because the growing middle class Chinese customers cannot afford the high quality Chinese products.

As a result, Chinese government is exploring affordable and alternative options for the growing middle-class customers.  

Bangladeshi garment export to China is on the rise since the government opened the duty-free trade deal on 4721 products in 2011 being majority of them are garment and apparel products.

According to a study by Swiss-based organization ITMF, by the end of 2020, China would manufacture US $750 billion worth of garments products which is currently US $300 billion. Half of the produced garments will be for export and half for domestic consumption. Currently, 80% of Chinese products are manufactured for domestic consumption. So Bangladesh has a huge opportunity and they should focus on Chinese market for the ultimate growth.

China produces 20% of their total production is solely dedicated to export which accounts for 40% of total global apparel trade which is worth nearly US $200 billion. Most of the Chinese manufacturers do not bother for export oriented business because China has 1.35 billion people. In a recent interview, former president of BGMEA, Anwar-ul-Alam Chowdhury Parvez said Chinese market will automatically grow because they have shifted from basic item production. “We should maintain a warm relationship with China for higher export” also said by Parvez. To minimize the global effect for financial recession, three percent cash incentive was introduced in 2009 for Bangladeshi exporters to China.

Both the State owned and privet sector companies are highly interested in trade deal with Bangladesh because of the recent flagship and road initiative in which Bangladesh is included.

It is expected that Bangladeshi export will cross US $1 billion mark soon and China will be the second largest market in Asia for Bangladesh after Japan. According to Bangladesh Export Promotion Bureau, the total export has increased 17.49 percent in the 2016-2017 fiscal year which accounts for US $949.41 million.             

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