Chinese companies are eyeing Bangladesh to avoid looming US tariffs under Trump

Highlights

• Foreign investors say recent political unrest has led to a deterioration in business sentiment
• For more foreign investment, Bangladesh needs to streamline export-import procedures
• Bida should play a more active role in addressing investor concerns and resolving issues
• To create a stable business environment, a robust law and order system is required

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

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

“Manufacturers must shift production to avoid the threat of high tariffs on Chinese exports to the US before they are imposed. So we will see a lot more investments (to Bangladesh),” he told TBS on the sidelines of the inauguration ceremony. The fourth meeting of the association’s board was held at a hotel in Dhaka on Saturday.

Nyan also pointed out some of the challenges faced by foreign investors in Bangladesh, pointing out that one of the biggest problems is the complex export-import process.

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

Citing an example, he explained that even minor errors, such as typos in a document, can stop both exports and imports and cause significant problems for manufacturers and exporters.

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

He said the Bangladesh Investment Development Authority (Bida) could play a more important role in addressing investors’ concerns.

“Bida should have a stronger voice on certain issues to help investors overcome challenges. It would be very beneficial if Bida took a more active role,” he said.

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

He said: “The most important thing is that workers must understand that if the factory closes, they will also lose their jobs. Owners, investors, the government and workers must work together to restore law and order and restore common sense to the country.”

Regarding the political regime change, he said: “It was a big surprise for us. We did not expect regime change, especially after the January election. The election 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. What is more important is law and order in society. People need to do the right thing and we will support any government that promotes that. We are not here for any specific reasons but to find a win-win situation,” said the entrepreneur.

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

Golden Crown Enterprises International manufactures woven fabrics, jackets, pants and headwear and exports worldwide, including to the United States, Europe, Japan and Korea. The company’s annual export value is US$180 million; and employs a total of 10,000 people.

On 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 also worried,” he added.

“In the long term, however, I believe investors will return because the opportunities here are too attractive. The land, people and resources are all excellent. Sometimes I would even say that the best thing is if no one else comes. “Time to get into the market,” said Nyan.

Describing developments in Bangladesh, he said Golden Crown set up its business here 30 years ago at a difficult time when the country lacked a backward-feeding industry.

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

Calvin Nyan also pointed out a key difference between Bangladesh and other Southeast Asian countries: Bangladesh has many local entrepreneurs who are very successful and skilled business people. “For this reason, we believe this industry (apparel) can sustain long-term growth,” he added.