Chinese businesses are showing increasingly greater interest in Chattogram, considering the geographical advantage of the port city. Factors like the duty-free access China recently granted to 5,161 additional Bangladeshi products must also be taken into account.
Registration data from the Bangladesh Investment Development Authority (BIDA) show a clearer picture of the phenomenon.
Eleven foreign and joint-venture (foreign and local) companies had registered investments of only Tk52.7 crore in Chattogram during FY2018-19. But in FY2019-20, twelve such companies registered investments worth Tk735.6 crore, an increase of Tk682.9 crore in just one year.
All three companies with foreign direct investments (FDI) are from China, and Chinese companies also registered with BIDA for joint investment with many Bangladeshi companies.
Experts believe that Chinese investment in Chattogram would have increased even more in the past three months had circumstances not been interrupted by the Covid-19 pandemic.
According to economists and international relations analysts, If Bangladesh manages to increase its trade with China to at least $1 billion per year by using the duty free facility, Chinese investment in Bangladesh will go up even further.
They are optimistic that due to geographical advantages in Chattogram and the presence of the special economic zone for China, investments from Beijing will continue to rise.
Speaking to The Business Standard, Bida's Chattogram Director Mohammad Yasin said, "Foreign investors across the globe put utmost importance on the ease of doing business in a country. Bangladesh is making steady progress in that field.
"Investments from Chinese companies are increasing due to the Chattogram port being very close to China's special economic zone and also on account of the duty-free access of Bangladeshi products in that country's markets."
Yasin noted, "We could not register a significant number of investment proposals in the last three months due to the coronavirus pandemic. We hope that all kinds of investments will increase after the situation returns to normal."
Commenting on the issue, economist Dr Moinul Islam said, "The impact of the Covid-19 pandemic could last another year. Foreign investments will increase if normalcy returns. But even if FDIs decrease from China, Bangladesh will get them from other countries.
"Besides, if Bangladesh can properly utilise the duty-free access granted to it by China, the country's investments will surely go up."
Aside from the proposed FDI, China and some other countries, among which are Thailand, Singapore and Indonesia, have proposed joint investments with Bangladeshi companies.
Bangladesh's Ocean Truck Logistics, in a joint venture with China's Qian Chen Hu and Singapore' Zhu Shiyu, has proposed an investment of Tk9.7 crore for the service industry. Mattel, in a joint venture with Singapore's Zhu Shiyu and Bangladesh's South Teriyal, has proposed an investment of Tk630.6 crore for the recycling and melting industry.
Singapore's Ong Chee Peng, along with Orion Construction, has proposed an investment of Tk10 crore. China's Zheng Changrong, in a joint venture with Deep Dredgers Ltd, has proposed an investment of Tk49.2 crore in the ship building sector.
A Thai company, in a joint venture with CK Fish and Agro Products Ltd, proposed an investment of Tk2.1 crore in the frozen fish and agro product sector. China's Gue Tong Yuan, along with Thian Meng Trade International, plans to invest Tk1 crore in the construction business.
A Saudi company, along with Bangladeshi Saudi Private Ltd, has been showing interest in investing Tk4.2 crore in the poultry sector. The German company Avad, through a joint venture with Bitumen Solution, will invest Tk9.8 crore in the bitumen production sector.
China's Zeng Shida, jointly with the Bangladeshi company Hong De, has proposed an investment of Tk4.7 crore in the construction sector.
Among the foreign direct investment companies, China's Li Xiang has registered to invest Tk7.4 crore in the construction sector. Meanwhile, Chen Xi proposes to invest Tk4.7 crore in the shipping and logistics sector.
Besides, China's Wenta Footwear Ltd has registered with BIDA to invest Tk1.9 crore in the manufacture of footwear in Chattogram.
Responding to a query, Chittagong Chamber of Commerce & Industry President Mahbubul Alam said, "Chattogram is an economic hub. Even if foreigners are interested in investing in the Mirsarai Economic Zone, we must continue to attract more foreign investment from others.
"Foreign investments will increase after the completion of the Anowara Special Economic Zone project. The Bay terminal project must be implemented in the port city as soon as possible to bring in more foreign investments."
Helal Uddin Ahmmed, chairman of the Department of International Relations at the University of Chittagong, said, "China gave duty-free facilities not only to Bangladesh, but to other countries as well.
"But Bangladesh has a geographical advantage, so investments from China and other countries are increasing. It seems like the upward trend in investments will continue to increase in the future."