Global EditionASIA 中文雙語Fran?ais
Opinion
Home / Opinion / Global Lens

Leverage yuan to boost China-Bangladesh trade

By Fakhrul Islam Babu | China Daily | Updated: 2024-07-10 07:00
Share
Share - WeChat
A man (right) takes photos of a train ready for a trial run along the newly-constructed mega rail line via the China-built Bangladesh's largest Padma Bridge on the outskirts of Dhaka, Bangladesh, on Sept 7, 2023. [Photo/Xinhua]

In the face of a persistent dollar crisis, Bangladesh is looking to fortify its economic ties with China by leveraging the yuan for bilateral trade. Despite having the regulatory framework in place since September 2022, Bangladeshi businesses have yet to capitalize on this opportunity.

Bangladeshi Prime Minister Sheikh Hasina's ongoing visit to China is aimed at expediting this initiative, which is pivotal to stabilizing Bangladesh's economy.

China is a significant trading partner of Bangladesh, accounting for 25 percent of its total imports, but the problem of the trade imbalance should be addressed.

The post-COVID-19 economic landscape has exacerbated Bangladesh's financial challenges, with declining reserves, a 10 percent drop in garment exports, and soaring inflation. Despite a $4.7 billion loan from the International Monetary Fund last year, Bangladesh's export sector continues to struggle. The country's financial strain was underscored when Fitch Ratings downgraded Bangladesh's credit score in May due to dwindling reserves.

In a bid to mitigate the foreign exchange reserve crisis, Bangladesh has sought a loan of 36.5 billion yuan ($5 billion) from China. Abdur Rouf Talukder, governor of Bangladesh Bank, the country's central bank, said that this loan, to be taken in yuan, is aimed at alleviate the foreign exchange shortage and cover import costs. The favorable low interest rate, thanks to the Shanghai Interbank Offered Rate, makes this loan more attractive compared than US dollar-denominated loans.

Bangladeshi State Minister for Commerce Ahasanul Islam Titu has proposed using local currencies — the Bangladeshi taka and the Chinese yuan — alongside the US dollar for bilateral trade. This approach could help alleviate the ongoing dollar shortage and expand regional trade.

Unlike the Indian rupee, the Chinese yuan is one of the five high-value currencies recognized by the IMF, making transactions in yuan both feasible and internationally accepted. China's Ambassador to Bangladesh Yao Wen emphasized this point while addressing the media after meeting with Bangladeshi Planning Minister Abdus Salam at the Planning Commission office.

He said that the fluctuation of the dollar rate is now a worldwide problem, which China is also facing, and that China wishes to work with Bangladesh. He highlighted that engaging with Bangladesh in using their currencies — the yuan and the taka — for trade could be a viable alternative to using the highly fluctuating US dollar. In addition to trade, China seeks to collaborate with Bangladesh in other development activities.

Salam echoed this sentiment, acknowledging China's significant role in supporting Bangladesh's five-year plans, and assured that any delays in the disbursement of the promised funds from China would be resolved through discussions.

To foster yuan-denominated trade between Bangladesh and China, several measures need to be implemented:

First, it is necessary to strengthen the banking infrastructure to facilitate the yuan's transactions, and bank officials must be trained to handle yuan-denominated letters of credit and transactions.

Second, conducting awareness and training programs to educate businesses on the benefits and procedures of trading in the yuan can encourage them to switch to yuan-denominated trade and other exchanges.

Third, offering incentives such as reduced transaction fees or favorable exchange rates for yuan-denominated trade can encourage businesses to shift from dollar- to yuan-transactions.

Fourth, strengthening bilateral agreements to ensure smooth and secure yuan-denominated transactions will foster trust and confidence among businesses.

And fifth, establishing a robust monitoring and evaluation system to track the progress of yuan-denominated trade and address any challenges promptly is vital.

By implementing these measures, Bangladesh can effectively use the yuan for trade, reducing its dependency on the US dollar and strengthening its economic relationship with China. With Sheikh Hasina visiting China, there is renewed optimism that these strategic initiatives will pave the way for a more balanced and resilient bilateral trade framework. The move not only aims to stabilize Bangladesh's economy but also to enhance the economic interdependence between the two countries, fostering a more sustainable and mutually beneficial partnership.

The author is general secretary of the China Bangladesh Friendship Center Limited and president of Asian Club Limited. The views don't necessarily reflect those of China Daily.

If you have a specific expertise, or would like to share your thought about our stories, then send us your writings at opinion@chinadaily.com.cn, and comment@chinadaily.com.cn.

 

Most Viewed in 24 Hours
Top
BACK TO THE TOP
English
Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
License for publishing multimedia online 0108263

Registration Number: 130349
FOLLOW US
主站蜘蛛池模板: 欧美日韩亚洲国产一区二区三区| 麻豆国产原创剧情精品| 无码一区二区三区免费| 亚洲国产综合人成综合网站00| 美女福利视频一区二区| 国产精品一卡二卡三卡| zooslook欧美另类最新| 日韩av午夜在线观看| 亚洲欧美另类久久久精品能播放的| 美女动作一级毛片| 国产成人一区二区三区| 91香蕉国产在线观看人员| 性生活大片免费看| 久久精品中文字幕| 欧美日韩国产三上悠亚在线看| 全彩无修本子里番acg| 青春草在线视频观看| 国产精品亚洲综合久久| 99精品国产在热久久| 成人黄色小说网站| 久久精品国产亚洲精品2020| 欧美日韩精品一区二区三区不卡| 全免费a级毛片免费**视频| 视频一区视频二区制服丝袜| 国产福利91精品一区二区三区| av片在线观看永久免费| 成人无码Av片在线观看| 久久无码无码久久综合综合| 欧美国产在线视频| 亚洲综合久久综合激情久久| 精品无码人妻一区二区三区品| 国产午夜福利在线播放| 777奇米四色| 国产麻豆精品手机在线观看| √天堂8资源中文在线| 搞av.com| 久久国产欧美日韩精品| 桃子视频在线观看高清免费视频| 亚洲特级黄色片| 男女免费观看在线爽爽爽视频| 四虎成人精品无码|