Bangladesh Apparel Exports To China Dwindle

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Although Bangladesh’s overall export earnings from China increased 9.81% year-on-year to US$ 426.14 million in the last seven months, apparel shipments to the East Asian nation failed to meet expectations despite enjoying duty benefits.

Apparel shipments to China fell to US$ 131.20 million in the July-January period of the current fiscal year, a decrease of 19.66% from US$ 163.30 million in 2020-21.

Of the total garment exports to the world’s second-largest economy during the period, knitwear shipments brought home US$ 53.53 million and woven products fetched US$ 77.68 million, registering a negative growth of 30.77% and 10.36% respectively, data from the Export Promotion Bureau showed.

China became a highly promising export market for local apparel products after Beijing extended duty-free benefits to 97% of Bangladesh’s garment items considering its status as a least-developed country in July 2020.

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Products that now enjoy duty-free access to the world’s most populous nation include 299 garment items, of which 226 products are also covered by the Asian Pacific Trade Agreement. Under the garments category, Bangladesh mainly exports woven T-shirts, polo shirts, trousers, sweaters, and other knitted items to China.

With China’s move to allow duty-free access for Bangladeshi apparels, an opportunity to export US$ 25 billion worth of garment items has opened up, if Bangladesh exporters could just grab an additional 1% share of the Chinese apparel market of US$ 350 billion, experts had predicted.

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Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), enumerates two reasons for the fall in apparel exports to China in recent months.

First, China has almost completely stopped importing garment items as a part of its zero-tolerance policy towards the spread of Covid-19. Second, Chinese consumers were affected by a recent depreciation in their local currency.

“So, the Chinese government is encouraging production of their own garment items, which negatively impacted Bangladesh’s exports,” Hassan said. He is hopeful that exports to China will grow with the easing of coronavirus restrictions.

However, shipment to the US and EU have risen significantly. Besides, Vietnam, China and Cambodia have formed a strong regional apparel supply chain that is very active now. So, imports from other countries have declined, experts point out.

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