China has expressed strong interest in investing in Bangladesh but has called for significant improvements in the country’s business climate, officials revealed following a meeting of the Bangladesh-China Working Group on economic cooperation. This meeting—held after a six-year gap—included representatives from the Chinese Ministry of Commerce, the Chinese Embassy, and Bangladesh’s Economic Relations Division (ERD).
Chinese businesses showed willingness to invest across sectors like textiles, energy, manufacturing, and infrastructure but cited persistent challenges, including bureaucratic inefficiency, inconsistent policies, and infrastructural deficiencies. These issues, they said, are stalling plans despite Bangladesh’s strategic location, competitive labor costs, and expanding economic zones.
China is Bangladesh’s largest trading partner, with imports totaling $16.64 billion in FY 2023–24. Chinese foreign direct investment (FDI), including from Hong Kong, reached $2.79 billion as of December 2024, making China the second-largest investor in the country. Key Chinese-funded infrastructure projects include the Padma Bridge and Karnaphuli Tunnel.
Chinese investors are also motivated by the “China Plus One” strategy to diversify production beyond China due to rising costs and geopolitical tensions. However, they continue to face operational barriers in Bangladesh, such as complex licensing systems, energy and land access issues, and lengthy customs processes.
While Bangladesh has initiated reforms—such as creating economic zones and streamlining investment promotion—the slow pace of implementation and unresolved structural problems threaten to derail investor confidence. Without deeper reforms to address inefficiencies, corruption, and infrastructure gaps, Bangladesh risks losing out to regional competitors in attracting vital Chinese investment.
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