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Short-term dividends coexist with long-term challenges
[2025/9/12]  Read total of [3] times

As the trade tensions between China and the United States escalate again, Chinese manufacturers are accelerating the transfer of some of their production capacity to Bangladesh to avoid the high tariffs imposed by the United States on Chinese goods. According to the Bangladesh Export Processing Zones Authority (BEPZA), several Chinese enterprises have recently signed investment agreements in the country, and more projects are queuing up for approval, demonstrating the growing confidence of Chinese investors in Bangladesh.


Short-term dividends coexist with long-term challenges


Meanwhile, the timing and scale of these investments indicate that China is actively positioning itself to absorb future trade shocks, especially those that may occur if the United States takes further punitive measures after the current period of tariff easing ends. By expanding their footprint in Bangladesh, Chinese enterprises can continue to enter the lucrative US market through more favorable trade channels, thus avoiding the impact of higher tariffs.


In view of these developments, the China-Bangladesh trade axis is clearly becoming an important part of the Chinese government's broader strategy to deal with the complex economic standoff between China and the United States. Bangladesh, with its tariff advantages, growing industrial base and cheap labor force, offers a feasible solution for Chinese manufacturers.


Despite the surging investment boom, analysts caution that infrastructure bottlenecks, energy shortages and policy stability in Bangladesh remain potential risks.


The November deadline is approaching, and the window of opportunity is narrowing


As the tariff suspension period on November 10th approaches, the outcome of the new round of negotiations between China and the United States will determine the future direction of trade. For Chinese-funded enterprises, it remains to be seen whether Bangladesh will become a long-term "safe haven" or a short-term "transitional port". But it is certain that the global supply chain is being reshaped, and Bangladesh is no longer a marginal player.


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