Bangladesh-China Economic Engagement under Global Geopolitical Shifts: Challenges and Opportunities for Trade Diplomacy and Industrial Transformation

Abstract

Abstract

Bangladesh-China economic relations are situated between two changes: the restructuring of the global political economy and Bangladesh's quest for diversified, science- and technology based industrialization. This article explores the potential of bilateral trade, investment, infrastructure cooperation, and market-access arrangements as a means of translating economic transactions into capability building within the country. The study finds that there is a structural asymmetry that has been present in the bilateral trade of Bangladesh and China over the years, using a qualitative explanatory design and the evidence provided by official Bangladesh Bank and Chinese customs data, bilateral statements, WTO and UNCTAD reports, and recent scholarship produced between 2021-2025. In 2024, China exports USD 22.88 billion of goods to Bangladesh and imports USD 1.17 billion, with the value of the goods exported to China rising by 13.7% year-on-year, according to the data from the customs. Meanwhile, the Bangladesh Bank data show that a significant portion of the imports from China is related to production, such as textiles and textiles products, machinery and electrical products, and chemicals and so on, and the Chinese FDI in Bangladesh increased to approximately USD 1.49 billion by the end of 2024. It is thus not just the bilateral deficit, but whether imported inputs, investment and infrastructure bring about learning, promote local supplier development, technological upgrading and export capacity, which is the central policy issue. It suggests an approach to trade diplomacy, which is based on capabilities and links market access, facilitation of foreign direct investment, standards, logistics, and industrial policy to the measurable domestic capabilities. The results indicate potential in the garment sector, man-made fibres, dyes and chemicals, light engineering and electronics, clean energy, digital services, agro-processing, and logistics, as well as risks from the concentration of suppliers, low local linkages, and limitations in standards, geopolitical fragmentation, and the transition towards LDC preferences.