Sino-Bangladesh relations

At the invitation of Bangladeshi Prime Minister Sheikh Hasina, Chinese Vice President Xi Jinping recently visited Bangladesh, which has certainly brought fresh hope of further strengthening Sin-Bangladesh relations in the coming years. Bangladeshi Prime Minister Sheikh Hasina appreciating the decade old relations between Dhaka and Beijing said China is a time-tested friend of Bangladesh.

This visit of Chinese Vice-President Xi Jinping to Bangladesh is significant for bilateral relations. It may be noted that Xi Jinping has been anointed as the likely successor to President Hu Jintao as party chief in 2012. It is a coincidence that the Chinese leader will observe his 57th birthday on June 15 in Bangladesh. The visit comes at a time when both countries will celebrate the 35th year of establishment of diplomatic ties by holding commemorative activities in Dhaka and Beijing to further enhance their friendship.

China's exports and imports have jumped again, according to trade statistics revealed last month. Trade figures in both sectors registered a nearly 50% rise in May from the levels of a year earlier. The figures have surprised analysts who expected more modest increases.

The figures signal a picture of an economy that is well on its way toward overtaking Japan as the world's second-largest economy after that of the United States.

As China emerges as a superpower, countries large and small are seeking to forge close relations with it. Germany, France and Britain frequently vie with one another to win trade deals with China.

Bangladesh's Relationship with China has been one of the priorities of successive governments. The heads of government of Bangladesh, irrespective of their political affiliations, invariably visited China and met with Chinese leaders to strengthen relations in every possible sector.

Bangladesh's relations with China are multi-faceted. China has assisted in infrastructure, power -- including hydropower -- coal mining, industrial plants, telecommunications, flood control, disaster prevention, river training, irrigation and water resources utilization.

During Sheikh Hasina's visit to China, Beijing agreed to provide preferential tariff treatment to more Bangladeshi products.

In the year 2009, bilateral trade between Bangladesh and China exceeded $ 4.58 billion, positioning China as Bangladesh's biggest formal trade partner.

The balance of payment is heavily tilted in favour of China, although Bangladesh's export to China has also been following an ascending curve in the past few years.

Last year Bangladesh's import from China was $ 4.4 billion and export $ 140 million.

Bangladesh's import from China includes textiles, machinery, equipment, chemicals, fertilisers, seeds and consumer goods etc, while Bangladesh primarily exports jute and jute goods, raw and processed leather, shrimp and frozen food, PVC materials etc.

By 2009, China's direct investment in Bangladesh had reached $88 million, much higher than in the previous two years. There are about 186 Chinese enterprises with a registered capital of $320 million in Bangladesh.

As of 2009, the volume of trade between the countries stood at about $4.5 billion, positioning China as Bangladesh's largest trading partner. During the Bangladesh prime minister's visit, China agreed to provide preferential tariff treatment for more products from Bangladesh (in July this year, China will offer zero tariff to another 4,721 products).

China has been a major supplier of defence materials to Bangladesh. Senior armed forces officials, including the chief, have developed cooperative relations with their counterparts.

China will contribute to projects related to greater connectivity, and is waiting for a concrete proposal from Bangladesh for building a deep-sea port in Chittagong.

"Bangladesh's location in between South Asia and Southeast Asia is highly important, especially important for the land locked countries like Nepal and Bhutan," Chinese Ambassador in Dhaka Zhang Xianyi said.

Speaking at a press briefing at the embassy ahead of Chinese Vice President Xi Jinping's official visit to Bangladesh, he said China will contribute to building the deep-sea port as it will connect many countries in this region.

Bangladesh sought Chinese assistance to build the deep seaport and direct road link with China during Prime Minister Sheikh Hasina's visit to Beijing on March 17-21.

Political pundits and diplomats in Bangladesh are seeing present government policy in further strengthening relations with Asian nations as "smart diplomacy". Bangladesh has growing relations with New Delhi too for past several months, which certainly gives a good signal for both the nations. Presently Dhaka and New Delhi is working in unison in combating terrorism as well as cross border terrorism. Bangladesh already has handed over several top figured fugitives from various anti-Indian separatist groups especially in the North-Eastern province on India as a symbol of friendship. In response, Dhaka too is expecting similar initiatives from India in sending back all those absconding notorious terrorists and Islamists, which are hiding inside India for many years. Most of such terrorists are operating various forms of crime inside Bangladesh right from sitting inside India. This certainly is a matter of grave concern for Dhaka and New Delhi definitely needs to pay highest and immediate attention to this issue.

Policymakers in New Delhi should look into the track record of decade-old excellent relations between Bangladesh and China and should adopt similar policies in giving confidence to Bangladeshi leaders on further strengthening the existing ties.

While the new vista of cooperation between Bangladesh and China is set to open after the visit of the Vice President, according to newspaper reports, rising labor costs in China are forcing U.S. apparel and accessories retailers, such as AnnTaylor Stores Corp. and Coach Inc., to consider relocating at least some of their production to countries with cheaper work forces. But doing so could risk increasing other expenses, such as shipping.

Guess Inc. is thinking along similar lines. Dennis Secor, the fashion brand's chief financial officer, said in an interview that Guess is looking to build its production capabilities in Vietnam, Cambodia and Indonesia.

Recent minimum-wage increases have pushed up Chinese labor costs by 5% to 15% on average this year, said Rick Darling, president of LF USA, a unit of Hong Kong-based Li & Fung Ltd., which acts as a go-between for retailers and their webs of suppliers. In the southern coastal province of Guangdong, one of a handful of hubs for apparel and accessories makers, the monthly minimum wage rose on average by more than 20%, effective May 1, the firm said.

Increased cost of labor in a number of Asian nations is a great concern for most of the major buyers of textile products in the West including United States. After the recent increase in labor cost in China, those prospective buyers could have put their focus on Bangladesh as labor cost here in even cheaper than especially Vietnam. But, acute power shortage in Bangladesh, which has no hope of seeing any solution at least in next two years has become a major obstacle to both Bangladeshi exporters as well as prospective importers into extreme challenge. Due to such power crisis, Bangladesh may even lose a significant stake of export business in the textile sector during 2010-2011.

Bangladesh government is on the process of finalizing a nuclear based power station with Russian assistance. A memo between Dhaka and Moscow has already been signed in this regard. But, according to experts, Russian technology is not very much trustworthy in today's world, especially after Chernobyl disaster. Bangladesh could seek assistance either from Beijing or Washing in establishment of nuclear power plant. On the other hand, the most prospective nation in Asia with stable technology of assisting any country with technology and infrastructure for resolving power crisis is Israel. Unfortunately, Bangladesh is continuing total ban on Israel since 1971, though, a number of Muslim nations are already having diplomatic or economic relations with Jerusalem. Saudi Arabia is also having economic relations with Israel since 1982.

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Sino-Bangladesh relations

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