Bangladesh wants to secure more trade benefits from China as a least developed country rather than sign a free trade agreement. China offers duty-free entry for 97 per cent of all Bangladesh products under the LDC category. China is Bangladesh’s largest bilateral trade partner. Import duty levied on Chinese products accounts for 30 per cent of the total revenue collected by Bangladesh from import duties annually. China is a vital trade partner of Bangladesh for various reasons. For instance, the country’s garment industry is heavily reliant on Chinese fabrics although local manufacturers can supply nearly 80 per cent of the yarn required by the knitwear sector. Bangladesh’s woven garment makers import nearly 60 per cent of all the fabrics they require directly from China as local weavers cannot supply adequate raw materials. In total, apparel makers in the country source 46 per cent of their raw materials from China. Moreovre Bangladesh is dependent on Chinese dyes, chemicals and capital machinery.

Apparel exports from Bangladesh to China are increasing with time as a section of consumers in the middle income bracket cannot afford the high-end garment items made in China. This is why they depend on cheaper Bangladesh products. The cost of apparel production in China has gone through the roof due to a shortage of skilled workforce.