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According to Bangladesh Bank data, Bangladesh imported goods worth $18.19 billion from China in FY2024–25, accounting for around 27 percent of the country’s total import bill, up from $16.63 billion in FY2023–24.

Quarterly imports reached $4.64 billion in July–September 2025 and $4.58 billion in October–December.

Bangladesh and China are also discussing a possible free trade agreement (FTA) to deepen trade and investment ties. A joint feasibility study has already been completed, although formal negotiations remain at an early stage.

However, Dhaka may move cautiously, as import duties on Chinese goods generate significant government revenue.

China also remains strategically important as Bangladesh explores pathways to join the China-led Regional Comprehensive Economic Partnership (RCEP).

Chinese investment has already gained a substantial foothold in Bangladesh.

According to the Chinese Enterprises Association in Bangladesh, nearly 2,000 Chinese companies are operating in the country with investment totalling around $3 billion, particularly in the garment sector.

‘IMPOSSIBLE TO OVERTAKE’

Mohammed Amirul Haque, chairman of Seacom Group and president of the Chittagong Chamber of Commerce and Industry (CCCI), said replacing China as Bangladesh’s main source of industrial inputs is virtually impossible.

“China remains Bangladesh’s preferred sourcing destination because of competitiveness, pricing, supply chains, logistics and shorter lead times,” he said. Most industrial machinery used in Bangladesh is imported from China for those reasons.

Amirul added that maintenance costs are also significantly lower. Chinese technicians can be hired for machinery repairs at around $60 to $100 per day, while technicians from Europe and the US may cost $600 to $800 per day, excluding accommodation expenses.

Mohd Khorshed Alam, president of the Bangladesh-China Chamber of Commerce and Industry (BCCCI), said reducing dependence on China would also be difficult because of pricing advantages.

Importers can source Chinese goods at prices around 28 percent lower than alternative suppliers, he said.

CHINESE PARTICIPATION VITAL

Mohammad Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID), said Bangladesh’s weak export performance in China shows that duty-free access alone cannot create demand.

“We simply do not yet produce enough of the goods that Chinese consumers and firms want to buy,” he said.

Given China’s dominance in apparel manufacturing, Bangladesh has limited room to expand exports through its traditional basket, he added.

Razzaque argued that the bigger challenge is commercial.

Without integration into Chinese retail networks, distribution channels and sourcing systems, Bangladeshi products will struggle to gain meaningful access to the Chinese market.

“What we need is a new model based on Chinese joint ventures with Bangladeshi entrepreneurs producing specifically for the Chinese market,” he said.

Such partnerships could bring market knowledge, product design, technology, branding and direct links to retailers.

“The tariff door is open, but we still need the products and commercial connections to walk through it.”

Razzaque said an FTA with China could still be useful, especially after Bangladesh graduates from least-developed-country status.

Since China already grants duty-free access, the value of an agreement would lie more in securing long-term preferential treatment, attracting Chinese investment and reducing regulatory and non-tariff barriers.

But Bangladesh must proceed carefully.

“China is the world’s most efficient manufacturing powerhouse with enormous supply-side capacity. A poorly designed FTA could place significant pressure on domestic industries and reduce government revenue,” he said.

He urged Bangladesh to adopt a China-specific export strategy by identifying 20–30 promising products and supporting firms through certification, packaging, product adaptation and stronger commercial representation in major Chinese cities.

Bangladeshi exporters also need direct connections with Chinese importers, retailers, supermarkets and digital platforms.

“Chinese participation will be critical because without their investment, market knowledge and distribution networks, it will be difficult to generate a meaningful export response from Bangladesh.”

Razzaque said Bangladesh should move beyond seeking isolated Chinese projects and instead focus on investment-led production clusters.

Special economic zones could play a central role, particularly if investment brings technology, managerial expertise and access to international markets rather than serving only domestic demand.

Promising sectors include export-oriented electronics and components, renewable-energy equipment, technical textiles including man-made fibres, agro-processing and light engineering.

He added that Bangladesh must improve its investment climate through reliable energy supply, serviced industrial land, faster customs clearance, predictable taxation, transparent profit repatriation procedures, effective one-stop services and digitised regulatory approvals.