Dhaka, Nov 14, 2025 (BSS) - President of the Chinese Enterprises Association in Bangladesh (CEAB), Han Kun, has underlined the importance of finalizing a Free Trade Agreement (FTA) between Bangladesh and China at the earliest possible time, saying it would unlock greater trade, investment and long-term cooperation between the two countries.

In an exclusive interview with the national news agency BSS, Han said the economic cooperation between Bangladesh and China has already deepened significantly, and a proper FTA would act as a vital institutional framework to further enhance bilateral opportunities.

“Many Chinese manufacturing companies are coming to Bangladesh because of its favourable investment environment,” he said, adding: “The delay in concluding the FTA is a bit concern for potential investors.”

He elaborated that Chinese investors are confident in Bangladesh’s stable growth — private investment in the power sector has increased by around 8 gigawatts in recent years, of which about 54 percent (roughly 4 GW) has come from Chinese investment.

Within the total installed capacity of around 27-28 GW, Chinese companies account for a significant portion, he added.

Han pointed out that one key concern for Chinese firms in the manufacturing sector is the potential constraint on raw materials and equipment imports through Bangladesh’s ports. “If the FTA could be signed sooner, these challenges would be eased and investment flow would be accelerated,” he observed.

He acknowledged that some stakeholders remain cautious because Bangladesh currently runs a significant trade deficit with China, as it imports far more from China than it exports. A 2025 analysis shows that Bangladesh has yet to fully utilise the zero-duty access offered by China due to limited product diversification and export capacity.

But, Han urged that this short-term imbalance be viewed in a long-term, strategic light: “Some believe that signing an FTA may result in a greater influx of Chinese products into Bangladesh. But, in the long run, it will help Bangladesh become a global export hub leveraging China’s strong manufacturing base.”

He noted that China already accounts for about 30 per cent of global manufacturing capacity. 

According to Han and CEAB data, Chinese firms have contributed significantly to Bangladesh’s infrastructure development — for example, through power, transport, and industrial zone projects. This has not only increased Bangladesh’s physical capacity but also reduced the social and economic costs of development, he said.

“Chinese companies play a vital role in giving Bangladesh access to low-cost equipment, semi-products and technologies that can help the country build export-oriented manufacturing,” he mentioned.

The CEAB president called for the Bangladeshi and Chinese governments to expedite both the FTA and an updated bilateral investment treaty. Talks on upgrading the investment treaty are already underway.

In its July 2024 joint statement, both sides announced completion of a feasibility study on the FTA, and agreed to begin negotiations on the investment agreement. “We hope both governments will expedite the process for signing the FTA and updating the investment treaty to ensure faster and smoother cooperation,” Han said.

He also emphasised the critical need for policy stability and credibility in Bangladesh to nurture investors’ confidence.

Han said: “There must be policy consistency and government credibility, not only for Chinese communities but for all foreign investors.”

Bangladesh and China have marked the 50th anniversary of diplomatic relations in 2025, underscoring the long-standing bilateral ties.

China has become one of Bangladesh’s largest trading partners, and its investment footprint is growing. According to data from March 2025, Chinese foreign direct investment (FDI) stock in Bangladesh stood at $2.67 billion as of September 2024.

China’s infrastructure investment under the Belt and Road Initiative (BRI) has helped Bangladesh in power, roads, tunnels and industrial parks; for example, China is reported to be implementing 21 bridge projects and 27 power/energy projects in Bangladesh. 

On the trade side, Bangladesh enjoys some duty-free/quota-free access to China as part of the Asia Pacific Trade Agreement (APTA) and China’s LDC scheme, but only about 61 per cent of Chinese tariff lines are currently covered. 

Han emphasised that an FTA would shift the relationship into a higher gear.

He concluded: “Bangladesh is not only a domestic market. It can become an export-driven manufacturing hub, leveraging China’s capacity, capital and technology. With the right framework, Bangladesh stands to gain enormously.”

Founded in 2004, the CEAB now counts around 250 member companies operating in Bangladesh across infrastructure, ready-made garments, textiles, logistics and aviation sectors.

Roughly half of the membership comes from the infrastructure sector, about 30 per cent from ready-made textiles, and the rest from trading, logistics and airlines.

Han said about 20 Fortune Global 500 companies, also Chinese companies, have a presence in Bangladesh through subsidiaries or branches — many of them clustered in infrastructure and power.