Bangladesh's trade deficit with its largest trading partner, China, widened by nearly 23 per cent to Tk 2.54 trillion (approximately US$ 20.66 billion) in fiscal year (FY) 2024-2025, driven by higher imports of industrial raw materials from the world's second-largest economy.
According to Bangladesh Bank data, the country's total outflows to China reached Tk 2.685 trillion during the period against inflows of Tk 143 billion.
Around 80 per cent of Bangladesh's trade with China comprises goods, or general merchandise, while the remaining volume of services also increased by more than 19 per in the period under review over its corresponding period a year earlier.
The deficit in the services category, including payments of remittances to foreign workers, also increased sharply.
Outflows under the segment rose to Tk 3.374 billion in comparison with the inflows of about Tk 1.0 billion, leading to a deficit of Tk 2.34 billion. The figure was an increase of nearly 97 per cent year-on-year, the BB data showed.
Bangladesh employs a significant number of Chinese nationals in various infrastructure and development projects, which contributes to the higher outflows.
According to business people, imports from China remain strong due to competitive pricing and flexible payment terms.
"We import both raw materials and semi-finished goods from China because they are cost-effective and the suppliers often allow deferred payments," said Mr. Anwar Alam Chowdhury Parvez, Managing Director of Evince Group, a textile conglomerate.
He further said shipping costs and delivery time from China are competitive compared to many other regions, further reinforcing its position as a key sourcing destination.
Industry insiders said Chinese government-backed projects in Bangladesh continue to drive demand for imported machinery, equipment and services from China.
According to economists, China's growing involvement in Bangladesh's infrastructure and services sectors for long has also contributed to the persistent trade imbalance with Bangladesh.
"Bangladesh has experienced limited export diversification to China despite having 100 per cent duty free access for all products from Bangladesh, effective from December, 2024," said Dr. Zahid Hussian, an independent economist.
jasimharoon@yahoo.com
