The garment industry is the backbone of Bangladesh’s economy, contributing over 80 per cent of the country’s export earnings and employing millions of workers, most of whom are women. Over the past two decades, the sector has grown exponentially, positioning Bangladesh as the second-largest garment exporter globally, following China.
However, a deep and complex relationship between Bangladesh and China, particularly in the context of trade, has emerged over the years, shaping both the opportunities and challenges in this crucial industry. The socioeconomic impact of Bangladesh’s garment trade with China is profound, influencing employment, economic growth, and broader societal development.
Trade relations between Bangladesh and China
China and Bangladesh have long-standing economic ties, but in recent years, these relations have intensified due to China’s increasing investment and trade partnerships in South Asia.
In the garment industry, China plays a dual role — as both a key supplier of raw materials and a major competitor in the global market. Bangladesh imports a significant amount of fabric, yarn, dyes, and other textile-related raw materials from China.
According to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), around 50 per cent of Bangladesh’s textile raw materials come from China, making China a crucial supplier. This reliance on Chinese imports has had a significant impact on Bangladesh’s garment industry.
By providing inexpensive raw materials, China helps Bangladesh keep its production costs low, enabling the country to remain competitive in the global market. This symbiotic relationship has been beneficial for Bangladesh, particularly in terms of cost-efficiency, but it also raises concerns about over-dependence, especially when supply chain disruptions occur, as witnessed during the Covid-19 pandemic.
Job creation and employment
The garment industry in Bangladesh employs around 4 million workers, with women making up about 80 per cent of the workforce. The industry’s growth, partly fuelled by access to affordable raw materials from China, has created jobs for many marginalised and rural populations, particularly women. These jobs have offered women financial independence and played a vital role in empowering them socially.
However, the growing dependence on Chinese raw materials poses both opportunities and risks for these workers. While the availability of cheaper materials supports employment by allowing manufacturers to scale up production, the volatility of international trade can lead to instability.
For instance, disruptions in the supply chain, such as sudden shortages of Chinese imports or price increases, could potentially threaten jobs. Moreover, Chinese competition in the global garment market poses a challenge to Bangladesh, as China’s vast production capabilities can undercut Bangladeshi exports, impacting the overall sustainability of employment in the sector.
Economic growth and export competitiveness
Bangladesh’s garment trade with China has had a significant impact on the country’s economic growth. The lower costs of raw materials from China help Bangladesh maintain its competitive edge in the global market. As a result, Bangladesh’s garment exports have surged over the years, contributing substantially to GDP growth and foreign exchange reserves.
The country’s competitive labour costs, coupled with China’s supply of inexpensive raw materials, have allowed Bangladeshi garments to remain attractive in price-sensitive markets such as the United States, Europe, and Asia.
However, there are challenges. China’s dominance in global trade, including its status as the world’s largest garment exporter, means Bangladesh faces tough competition. China has been able to offer similar garments at competitive prices, threatening Bangladesh’s position in key markets.
The trade relationship is thus both cooperative and competitive, with Bangladesh benefiting from Chinese inputs but facing fierce competition in the finished goods market.
Furthermore, as China transitions away from low-end manufacturing towards high-tech industries, the dynamics of this relationship could change.
China’s potential move away from garment manufacturing may create new opportunities for Bangladesh to expand its market share, particularly in regions where Chinese dominance has historically overshadowed Bangladesh.
Social development and gender empowerment
The impact of Bangladesh’s garment trade with China extends beyond economics and job creation. The sector’s growth, supported by the supply of affordable Chinese materials, has contributed to significant social changes, particularly in empowering women.
With millions of women employed in garment factories, the industry has become a crucial avenue for gender empowerment in a traditionally patriarchal society. Women working in garment factories often gain financial independence, access to healthcare, and education for their children, improving their overall quality of life.
Many women workers also become primary breadwinners for their families, which shifts social norms and helps reduce poverty in rural areas. However, while the industry has provided opportunities, challenges remain.
The jobs, although empowering, are often low-wage and subject to poor working conditions. Over-reliance on Chinese raw materials can exacerbate this situation, as any fluctuations in material costs or availability could squeeze profit margins and potentially worsen working conditions.
Long-term sustainability and future prospects
As Bangladesh continues to grow as a global garment manufacturing hub, the relationship with China will play a critical role in shaping the sector's future.
To ensure long-term sustainability, Bangladesh needs to reduce its over-reliance on Chinese raw materials by diversifying its supply chain. Establishing more local textile industries or seeking alternative trade partners could mitigate risks associated with dependence on China.
Moreover, to withstand competition from China and other emerging markets, Bangladesh must focus on enhancing the quality of its garment products, investing in technology, and improving working conditions.
This will not only strengthen the country’s position in the global market but also contribute to more sustainable socioeconomic development.
In the end, we can say that the garment trade between Bangladesh and China has a profound socioeconomic impact on Bangladesh. While it has spurred economic growth, created employment, and empowered women, it also presents challenges related to dependence on imports and global competition.
Moving forward, Bangladesh must strike a balance between benefiting from Chinese trade partnerships and safeguarding its own industrial sustainability.
Diversification of supply chains, investment in local industries, and improvements in labour conditions are crucial to ensuring that the benefits of this relationship are both enduring and equitable for the millions who rely on this vital sector.
The writer studied at Shandong University of Finance and Economics and is currently studying at Chongqing University of Posts and Telecommunications.
