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The welcome shadow of China
The private sector in Bangladesh have a lot to learn from what is going on in China...There is potential for China to invest in our EPZs...What we should remember is that Bangladesh's relations with China should not be subject to partisan politics. China has already demonstrated its maturity by inviting the Leader of our Opposition while our Prime Minister was a very important guest in that country. This is the essence of friendship.
The economic map of Asia is being redrawn, with China at the centre. Its economic policies have borne remarkable fruit over the last decade. It has become the most important manufacturing nation in the world.
The results over the last two decades have been staggering. Even if one assumes that some of the growth numbers might be slightly exaggerated, 'it has moved hundreds of millions of people from poverty into middle-income status' (Newsweek, 30 December, 2002). One would tend to also agree with economist Jeffrey Sachs' assertion that 'China is the most successful development story in world history' cannot be denied.
China's single minded focus on economic growth through market reforms has today become an example for its Asian neighbours. It has also become an example of how a country can integrate into the world economy, utilize foreign investment and convert such input into export potential. This is probably what most developing nations aspire to achieve. It can be best explained through some simple raw statistics. It makes this assumption that much more understandable. In 1985, exports from foreign companies in China were composed of only 1 per cent of the country's total exports, amounting to $300 million. In 2001 they composed 50 per cent of its exports, totalling $133 billion. It would be interesting to note here that China is now the largest provider of Japanese imports, and 'these goods are not all cheap plastic toys'. The other day, Sony, Japan's flagship corporation revealed that it will be manufacturing more goods in China than in its home country. No wonder that Singapore's Prime Minister, Goh Chok Tong has called China's continuing growth 'scary' in terms of competition for the Singapore economy.
However, a scenario where China continues to grow in economic strength will also be beneficial for its neighbours. After all, as China's exports continue to grow, so will its imports. As its exports diversify, so will its import needs. In the long run it will not be surprising to find the emergence of complementarities of economies. Politics will of course play an important role in this evolution.
It is in this context that the countries of the European Union and the United States have started focussing very carefully not only on the possible areas of future cooperation but also on the consolidation of existing sectors of cooperation. The private sectors in these countries are also exerting indirect influence on the formulation of trade and foreign policies of these countries towards China. Both the public and the private sectors realize that this is the need of the hour. I am happy to note that this is also the case in Bangladesh.
Although China formally recognised Bangladesh in 1975, informal contacts had been made even earlier. Subsequently came the visit of journalists in 1976 and the visit of General Zia in 1977. He went back again as President in July, 1980. After Begum Khaleda Zia became Prime Minister in 1991, she led a delegation to that country. Similarly, former Prime Minister Sheikh Hasina went to China in September, 1996. This process of strengthening existing bilateral relations were also enhanced by visits to Bangladesh over the years by important Chinese leaders.
The latest visit to China by Prime Minister Khaleda Zia from 23 to 27 December, 2002 may be considered as one of the high points in her Administration's efforts to further open the eastern horizon for Bangladesh entrepreneurs. The recent inter-action with Thailand and Myanmar and now with China will hopefully give Bangladesh a stronger economic platform to pursue her economic and trade agenda.
It is at this point that I revert to political will. In this case, during the Chinese visit, the Bangladesh Prime Minister not only had the singular opportunity to hold talks with Chinese Premier Zhu Rongji and Chinese President Xiang Zemin, but she also met the newly elected Chinese Communist Party Secretary General Hu Jin Tao. This was important, given the fact that the Sixteenth Congress of the Communist Party of China has just concluded with a smooth and meaningful transition from one generation of leaders to another. In a way, as has been correctly pointed out by some analysts, the visit enabled Bangladesh to thank the 'old guards' and welcome the new leadership. This renewal of high level contacts also gained particular significance given the fact that Begum Zia was paying a return visit within twelve months of Chinese Prime Minister Zhu Rongji's visit to Dhaka.
It is understood that the leaders of both sides exchanged views on regional and international issues of common concern. They apparently also agreed to strengthen and intensify the existing 'special' bilateral ties in different fields between the two countries. In this context many accords were signed between the two sides. China is to provide Bangladesh with a grant of US $ 7.25 million for construction of the Sixth Bangladesh-China Friendship Bridge over the Dhaleswari river. There will also be a soft loan of over US$ 6.04 million and the conversion of a US$ 3.02 million credit into grant. The Chinese government also demonstrated their goodwill for the people of this country by announcing that the new Conference Centre in Sher-e-Bangla Nagar, Dhaka built with Chinese assistance of US$ 24 million would be a gift from the Chinese people. Although, we did not host the Non-Aligned Conference in Dhaka, the Centre itself is proving to be an important addition in terms of available facilities.
Another important aspect was the signing of an umbrella defence cooperation agreement aimed at integrating piece-meal accords. It is being hoped that this will maximize cooperation in defence training, maintenance and also in some areas of production. It is presumed that this will facilitate the supply of armaments, military hardware and special equipment. It is also expected that it will assist in the modernisation of the armed forces. According to published reports, the duration of the agreement will be for five years in the first stage, with the provision of further extension if both parties so agree. Supporters of the present Administration have hailed the signing of this arrangement as 'a turning point in foreign policy'. There is no question about it being a significant step. One hopes however that this does not lead to further unnecessary misunderstanding with other countries in our region and some of our development partners. I am sure that our relevant authorities will be taking the required steps to explain the peaceful content to all concerned. The Foreign Minister in his press briefing on 28 December, 2002 has already outlined the organizational reasons for the signing of this accord. This has been a good decision.
The other interesting feature of the visit appears to have been the last part of the itinerary which took the Bangladesh delegation to Kunming, capital of China's Yunnan province. It has been subsequently explained by the Foreign Minister that this was part of an initiative that seeks to create a 'growth quadrangle encompassing Yunnan, Myanmar, the seven north-eastern states of India and Bangladesh'.
I strongly believe that sub-regional cooperation is as important as regional cooperation. The previous Administration had also emphasized this perspective. We should not forget the great advantages that can accrue for Bangladesh through such a system. We need to look at Europe to understand the merits for such inter-linkages.
The potential for tourism and the putting in place of the required infrastructure will for obvious reasons be that much easier if such regional cooperation can take place. Joint investments and regional airline connections will also emerge in the long run. When one thinks of also including Laos, Cambodia and Thailand in this grid, the scope continues to grow. However, like all good ideas, this one will need very careful planning as various sensitive factors exist within the equation it would probably be useful in this regard to set up an inter-ministerial committee in Dhaka to not only study the implications but also the measures that will have to be undertaken to activate this process. Getting the various Chambers of Commerce and the private sector representatives from this sub-region together would also help.
There is also the question of improving the existing communications network. Efforts are already underway for connecting the south-eastern fringe of Bangladesh with Thailand through Myanmar. China can be asked to participate in a meaningful way in this exercise of inter-linkage.
The private sector in Bangladesh have a lot to learn from what is going on in China. They need to focus on the bigger picture after 2004 in the field of textiles, readymade garments and knitwear, particularly in high fashion items. They should try to establish links and seek technical expertise in the fields of agriculture, horticulture and agro-processing. Bangladesh, because of the 'Everything But Arms' initiative introduced by the European Union (for LDC States) has a distinct advantage. Its products can enter Europe duty-free and quota-free. We should try to cash in on that. There are limitations at this point of time, but these can be overcome. Phyto-sanitary standards and other regulatory requirements can be put in place with technical assistance from Thailand, South Korea and China. With their assistance, we can also create forward as well as backward linkages for our products. Packaging and canning facilities are particular areas that can benefit. There is potential for China to invest in our EPZs. This can be specially geared towards information technology.
What we should remember is that Bangladesh's relations with China should not be subject to partisan politics. China has already demonstrated its maturity by inviting the Leader of our Opposition while our Prime Minister was a very important guest in that country. This is the essence of friendship.
Muhammad Zamir is a former Secretary and Ambassador.
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