In spite of the fact that China has given 97% of Bangladeshi goods free market entry, over one-third of total apparel exports are still duty-free. According to Rubana Huq, President of BGMEA, only $308.4 million of clothing was duty-free from 507 million of clothing shipped to China by Bangladesh in 2018-19. Out of the remaining $198 million, she says, garment items worth $20 million will be included in the new duty-free system.
In June, 97 percent of Bangladesh’s tariff goods were given zero status on the Chinese State Council market effective 1 July by its Tariff Committee. In order to benefit from the zero-tariff status in its industry, China then adds 5161 additional goods from Bangladesh. Previously, the Asia-Pacific Trade Agreement had allowed 3,095 Bangladeshi goods to be duty-free on their markets.
Bangladesh has to add 40% more weight to its exports to gain duty-free benefits in China, Huq says. Previously, the value-added threshold for the China industry was 30 percent. In the first quarter of the financial year 2020-21, Bangladesh’s RMG exports to China dropped by 34.35% to $72.21 million. During July and September of the last fiscal year, it amounted to $109.99 million.