US-China trade war and good performance of apparel exports in non-traditional markets acted as a catalyst for the rise in apparel export.
Bangladesh’s overall merchandise export earnings have registered a 10.55% growth to $40.53 billion in the just-concluded fiscal year, riding mainly on apparel exports, according to the provisional data of Export Promotion Bureau (EPB). Of them export to China contributed $506.51 million.
Since 2011 the Chinese government has given Bangladesh a priority trade advantage, Bangladeshi exporters enjoy duty-free access to an export of more than 5,000 products, which is the case for garment export. This has helped boost garment exports to China.
US economy was better in the last year, which helped Bangladesh to export more. Beyond this, export performance to non-traditional export destinations including China, Japan, and India were better.
Over the past decade, garment shipments in the Chinese market have grown 9.6 times bigger. In the first quarter, the export revenue was only $ 52.81 million. FY2018–19 saw a growth of 29.33%, according to the Bangladesh Export Promotion Bureau.
Increasing production costs in China have given Bangladesh the opportunity to export cotton-based clothing. China is reluctant to engage in the manufacture of low-end garments as the high-tech industry is moving towards manufacturing, opined industry leaders.
The Chinese government discourages textile production in their country due to environmental concerns. China is reducing investment in garment factories at the domestic level. Instead, it continues to operate production in countries like Bangladesh, Cambodia, Vietnam and India.
“China has already invested heavily in the Bangladeshi garment sector. We welcome new Chinese investment, but Chinese factories have to be fully compliant factories that are approved by buyers worldwide, “said an industry leader.
China is one of the top investors with $1.03 billion in Bangladesh from that $430 million in the textile sector last year according to BIDA.
Bangladesh needs to use geographical proximity with China to exports our readymade garment exports.
“Lead times are important to us in this age of fast fashion. China and Bangladesh are less distant than European countries and the US. This has led us to increase shipments to China,” said BGMEA Director Md. Mohiuddin Rubel. The stimulus package from the government seems to be working to export the new market.