Chinese delegates expressed readiness to invest across various sectors but voiced frustration over persistent obstacles in doing business in Bangladesh. These include complex bureaucratic procedures, inconsistent government policies, inadequate infrastructure, and a lack of transparency.
China has called on Bangladesh to improve its investment climate to attract more Chinese enterprises, as growing interest from Chinese businesses is being stymied by longstanding barriers, officials said on Tuesday.
The appeal was made during a high-level meeting of the Bangladesh-China Working Group (WG) on economic cooperation and investment held in Dhaka last week, after a six-year hiatus. The meeting brought together representatives from China’s Ministry of Commerce, the Chinese Embassy in Dhaka, and Bangladesh’s Economic Relations Division (ERD), ahead of the Bangladesh-China Joint Economic Commission (JEC) meeting scheduled for June 1.
Chaired by ERD Additional Secretary Mirana Mahrukh, the working group reviewed bilateral economic ties and explored new avenues for cooperation. Central to the discussions was the growing enthusiasm of Chinese firms to set up operations in Bangladesh—an opportunity increasingly hindered by what participants described as an “impoverished business climate.”
Chinese delegates expressed readiness to invest across various sectors but voiced frustration over persistent obstacles in doing business in Bangladesh. These include complex bureaucratic procedures, inconsistent government policies, inadequate infrastructure, and a lack of transparency – issues that have long deterred foreign direct investment (FDI), particularly from China.
“Chinese investors are keen to invest here, but the ground reality is deterring them,” a senior ERD official told The Financial Express on condition of anonymity. “They’ve asked us to simplify the licensing system, ensure easier access to land and energy, guarantee policy stability, and facilitate profit repatriation.”
Frustrating Red Tape
China has grown into one of Bangladesh’s most significant economic partners. In FY 2023–24, Bangladesh imported goods worth $16.637 billion from China, accounting for 26.4 per cent of the country’s total imports, indicating the growing demand for Chinese products.
Chinese investment in Bangladesh is also on the rise. According to Bangladesh Bank data, Chinese FDI – including from Hong Kong – stood at $2.789 billion as of December 2024, making China the second-largest investor in the country. Chinese firms are active in a wide range of sectors including textiles, energy, and infrastructure, with prominent involvement in major projects such as the Padma Bridge and the Karnaphuli Tunnel.
Many of these firms are exploring a “China Plus One” strategy to diversify their manufacturing bases amid rising production costs and geopolitical uncertainties at home. Bangladesh, with its strategic location, cost-effective labour, and expanding economic zones, presents a promising option.
However, officials and industry insiders caution that Bangladesh must address key weaknesses to become a truly attractive destination.
A senior official from the Bangladesh-China Chamber of Commerce and Industry (BCCCI), requesting anonymity, said: “We are trying hard to bring in FDI, especially from China. But the reality is that the business environment here remains challenging. Chinese firms are hesitant to fully commit.”
He pointed to issues such as bureaucratic red tape, lack of coordination among government bodies, and slow processing of investment approvals. “These concerns often translate into significant delays and higher operational costs,” he added.
Chinese delegates at the working group meeting reiterated these frustrations, highlighting the need for timely implementation of economic zones, particularly the proposed zone in Anwara, Chattogram, dedicated to Chinese investors. “There’s enthusiasm, but it’s being met with operational roadblocks,” said the ERD official.
Working to Address Challenges
Analysts note that despite some progress, infrastructure shortfalls remain a significant impediment. Unreliable electricity and gas supply, congestion at ports, and underdeveloped transport links increase the cost of doing business and reduce investor confidence.
The government, however, says it is working to address these challenges. The Bangladesh Investment Development Authority (BIDA) has launched initiatives to streamline FDI approval processes and improve services. In parallel, large-scale economic zones are being developed, and regional investment promotion agencies are being merged to reduce administrative overlap.
“The Chinese side has been informed of these reforms,” the ERD official said.
Additionally, the interim government has shown particular interest in attracting Chinese investment in emerging sectors such as healthcare, solar panel manufacturing, and high-value textiles—areas seen as vital for Bangladesh’s economic diversification.
Yet analysts argue that while policy initiatives are welcome, deeper structural reforms are necessary if Bangladesh is to fully benefit from China’s shifting industrial landscape. “What we need is fundamental reform – cutting down inefficiency, eliminating corruption, ensuring policy consistency, and investing in better infrastructure,” said one Dhaka-based economist.
Without these reforms, Bangladesh may struggle to compete with regional rivals such as Vietnam and Indonesia who are also courting Chinese investors aggressively.
As Bangladesh gears up for the upcoming JEC meeting, expectations are high that both sides will use the platform to not only enhance bilateral cooperation but also iron out the friction points deterring investment.
For Bangladesh, the stakes are high. With global supply chains being redefined, the opportunity to host Chinese industries could be transformative, if only the right conditions are created.
