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Bangladesh gains, China loses as low cost textile maker

As per a Asia Development Bank study, Bangladesh textile value chain is rising faster than any other Asian country. Reason: shift of low cost manufacturing from China to Bangladesh. In fact, companies Singapore, Japan, Taiwan and South Korea, which have traditionally relied on low cost production in China, have had to adjust. Intraregional trade within the labor-intensive Asian textile industry is still increasingly dominated by China but Bangladesh and Vietnam are emerging as important players, says the ADB report on Asian Economic Integration, 2015.

In the meantime, domestic value added shares of Japan, Korea and China have declined six to eight percentage points during 2000 to 2011. Apart from rising domestic value added shares, the foreign value added to Bangladesh and Vietnam exports is also increasing at a much faster pace than that experienced by the rest of their peers (excluding China).

With rising production costs in other economies, operations are being set up in countries like Bangladesh and Vietnam. Governance gaps and lack of focus have undermined performance in some special economic zones in Asia, while successful zones have managed to build close ties with the domestic economy. Bangladesh has attracted FDI in garments and generated new trade, but has had limited success in upgrading and diversifying special economic zone exports.

 
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