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Chinese companies eyeing Bangladesh to avoid looming US tariffs under Trump

Chinese companies eyeing Bangladesh to avoid looming US tariffs under Trump

Highlights

  • Foreign investors say recent political turmoil has worsened the business climate
  • To increase foreign investment, Bangladesh needs to simplify its export and import procedures.
  • Bida should play a more active role in addressing investor concerns and problem solving.
  • To create a stable business environment, a reliable system of law and order is necessary.

Bangladesh is likely to see a surge in foreign investment as Chinese businesses plan to move here to avoid high export tariffs from the US after the Trump administration takes office in January next year.

“I think the Trump administration is going to raise significant tariffs on Chinese goods,” Calvin Nyan, the recently re-elected president of the Overseas Chinese Association of Bangladesh (OCAB), said in an interview with TBS.

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“Manufacturers must move production to avoid looming high tariffs on Chinese exports to the US before they are implemented. So we will see a lot more investment (in Bangladesh),” he told TBS on the sidelines of the opening ceremony of the association’s fourth board meeting at a hotel in Dhaka on Saturday.

Nyan also pointed out some of the challenges that foreign investors face in Bangladesh, noting that one of the biggest challenges is the complex export-import process.

“We need simple import and export procedures. If they (the government) can streamline these processes, it will greatly benefit businesses,” said Nyan, who is also managing director of Golden Crown Enterprises International, an export-oriented textile and apparel company.

He gave an example, explaining that even minor errors, such as typos on a document, can stop both exports and imports, creating serious problems for manufacturers and exporters.

“Therefore, we need to think about simplifying business support procedures and policies,” he added.

He said the Bangladesh Investment Development Authority (Bida) could play a more prominent role in resolving investor concerns.

“Bida needs to have a stronger voice on certain issues to help investors solve problems. It would be very helpful if Bida took a more active role,” he said.

Expressing concern over the law and order situation in Bangladesh following the change of government in August, Calvin Nyan said: “There is widespread unrest in Bangladesh and we hope it will be resolved soon.”

He said: “The most important thing is that workers must understand that when a plant closes, they also lose their jobs. Owners, investors, government and workers must work together to restore law and order and restore sanity to the country.”

Regarding the change in the political regime, he said: “It came as a big surprise to us. We did not expect regime change, especially after the elections in January. The elections took place, she (Sheikh Hasina) won, and then suddenly the regime changed.”

“For us, as Chinese investors, it doesn’t matter who is in power. Law and order in society are much more important. People must do the right thing and we will support any government that promotes this. We’re not here for anything specific. political party, but to find a win-win situation,” the entrepreneur said.

“We create jobs, invest and pay taxes. We want to grow, but maintaining law and order is critical,” he added.

Golden Crown Enterprises International produces woven fabrics, jackets, trousers and hats, exporting them worldwide, including the United States, Europe, Japan and Korea. The company’s annual export value is $180 million; and it employs a total of 10,000 workers.

Regarding future investment plans, Calvin Nyan said they have paused their expansion due to the current political situation and economic downturn, but intend to resume expansion next year when stability returns.

“I think other investors will be hesitant to invest right now because they are worried too,” he added.

“However, in the long term, I believe investors will come back because the opportunities here are too attractive. The land, people and resources are excellent. Sometimes I would even say that when no one else comes, that’s the best.” it’s time to go to market,” Nyan said.

Describing developments in Bangladesh, he said Golden Crown set up business here 30 years ago during difficult times when the country had no backward-linked industry.

“Thirty years ago there were virtually no industries, but now there are many supporting industries. It was very difficult to establish the industry back then, but today a lot has changed. For example, when we needed buttons for clothes. We had to import them. Now we can buy them locally,” he said.

Calvin Nyan also noted a key difference between Bangladesh and other Southeast Asian countries: Bangladesh has many local entrepreneurs who are very successful and skilled businessmen. “We therefore believe that this industry (apparel) can sustain long-term growth,” he added.