Economics and Business
ISSN 2775-9237 (Online)
Published: 12 July 2021
Trade Deficit of Bangladesh with China: Patterns, Propensity and Policy Implications
Md Ekram Hossain, HUANG Dechun, Changzheng ZHANG, Ebenezer Nickson Neequaye, Vu Thi Van, Mohammad Ali
Hohai University (China), Busines School of Hohai University (China), Center for Research Innovation and Development (Bangladesh), Jiangxi Science and Technology Normal University (China)
Download Full-Text Pdf
Keywords: Bilateral Trade, Trade Deficit, Export Specialization, Bangladesh, China
This paper aims to examine export, import and trade intensity, export specialization index, Herfindahl-Hirschman index for bilateral concentration and diversification indices to analyze the specializations, structure and trends of deficit in bilateral trade between Bangladesh and China from 1995 to 2018 and policy recommendations in this regard. The results reveal that the gap of export and import intensity between Bangladesh and China is widening rapidly perennial. The export specialization indices expose very significant outcomes where among the analyzed 16 sectors; 6 sectors exhibit high specialization, 3 sectors demonstrate medium, 3 sectors exhibit low and the rest of the 4 sectors disclose no specialization for Bangladesh’s export to China. The findings of the Herfindahl-Hirschman Index (HHI) reveal that from 1995 to 2010 the export of Bangladesh to China concentrated within few sectors but from the year 2011 to 2018 the export has been reclassifying steadily into diversification. The overall analysis of the indices suggests the necessity to be improved of the level of intra-industry trade between China and Bangladesh. Moreover, emphasis should be given to the sectors having a high specialization that endure the capacity to narrow the trade deficit. Furthermore, the export baskets of Bangladesh to China require to be diversified. Hereafter, various measures and implications are also suggested in the policy recommendation for further improvement.
Kundu, N., Bilateral Trade Balance of Bangladesh with BRICS Countries: A Static Panel Data Analysis.Journal of Economics and Development, 2015. 17(2): p. 53-68.
Kohli, S.C., Bangladesh's sprouting bilateral relations with China: An overview, in Merinews (Accessed in December 2020). 2020: India.
DCCI, Bangladesh-China Bilateral Trade. 2020, Dhaka Chember of Commerce and Industries (DCCI), Accessed in December 2020: Dhaka Bangladesh; https://www.dhakachamber.com/
Database, U.C., Database of UN COMTRADE, UN, Editor. 2020: USA; https://comtrade.un.org/
WTO. WTO Time Series Data (Accessed in December 2020). 2020; Available from: http://stat.wto.org/Home/WSDBHome.aspx.
Bank, B., Bangladesh Bank Open Data Initiative. 2020: Dhaka, Bangladesh (Accessed in December 2020); https://www.bb.org.bd/econdata/
Kabir, D.M., Expanding the Bangladesh-China trade frontier, in The Daily Star (Accessed in December 2020). 2020: Dhaka, Bangladesh.
Islam, M.S., Xi Jinping's visit: Implications for Bangladesh-China relations, in The Daily Star (Accessed in December 2020). 2020: Dhaka, Bangladesh.
Lab, M.M. Atlas of Economic Complexity (Acessed in December 2020). 2020; Available from: https://atlas.cid.harvard.edu/
Islam, S., China to extend zero-duty facility to more BD items, in The Financial Express. 2012, The Financial Express: Dhaka, Bangladesh.
Wahid, S., China: A worthy trade partner, in The Daily Star (Accessed in December 2020). 2016: Dhaka, Bangladesh.
Islam, M.R., M.A. Mahfuz, and L. khanam, Motives for Investing Chinese Companies in Bangladesh and their Outwards FDI.International Journal of Scientific and Research Publications, 2013. 3(12).
Textiles from the Nile Valley (Research group). Conference (8th : 2013 : Antwerp Belgium), et al., Textiles, tools and techniques : of the 1st millennium AD from Egypt and neighbouring countries : proceedings of the 8th conference of the research group 'Textiles from the Nile Valley' Antwerp, 4-6 October 2013. 197 pages.
Bano, S., An Empirical Examination of Trade Relations between New Zealand and China in the Context of a Free Trade Agreement. 2014.
Raj, P.S., E. Wing, and D. Ambrose, A brief analysis of India-Japan bilateral trade: A trade intensity approach.International Journal of Economics, Commerce and Management, 2014. Vol. II(2).
Folfas, P., The Intensity of Bilateral Relations in Intra-EU Trade and Direct Investments: Analysis Of Variance and Correlation. 2010.
Brown, A.J., Applied economics: Aspects of the world economy in war and peace.London: Allen and Urwin., 1974.
Kojima, K., The pattern of international trade among advanced countries.Hitotsubashi Journal of Economics, 1964. 5(1): p. 16-36.
Ji, Z., Y.W. Hu, and J. Mao, An Analysis on the Interdependence of Sino-Australian Trades.Journal of Empirical Economics, 2014. 3(1): p. 1-9.
Yoon, C.-I. and K. Kim. Comparative advantage of the services and manufacturing industries of Korea, China and Japan and implication of its FTA policy. in Proceedings of the Conference" Korea and the World Economy." Korea University. 2006.
Nath, N.C., Dynamics of Trade Pattern and Competitiveness of Bangladesh: Implications for Future Development.Paper for Presentation at the Biennial Conference “Global Economy and Vision 2021” during 12-14 July, 2012, to be held at the Institution of Engineers, Dhaka 2012.
Bernatonyte, D. and A. Normantiene, Estimation of trade specialization: the case of the Baltic States.Engineering Economics, 2015. 62(2).
AHRC Research Centre for Textile Conservation and Textile Studies. Conference (3rd : 2005), M. Hayward, and E. Kramer, Textiles and text : re-establishing the links between archival and object-based research : postprints. 2007, London: Archetype. xv, 267 p., 32 p. of plates.
Rahman, M.M., Bangladesh-India Bilateral Trade: Causes of Imbalance and Measures for Improvement.University of Sydney, NSW 2006, Australia, June 2005, 2005.
VAHALÍK, B., Analysis of export diversification development of the European Union and BRICS countries.2015.
Wu, Y. and Z. Zhou, Changing bilateral trade between China and India.Journal of Asian Economics, 2006. 17(3): p. 509-518.
Bano, S. and J. Tabbada. Economic relations between New Zealand and the Philippines: An empirical analysis. in 53rd New Zealand Association of Economists Annual Conference, Palmerston North. 2012.
Kellman, M.H.S., Yochanan, Adam Smith Meets an Index of Specialization in International Trade.PIER Working Paper 10-029, 2010.
Iapadre, P.L., Measuring international specialization.International Advances in Economic Research, 2001. 7(2): p. 173-183.
Ferrarini, B. and P. Scaramozzino, Indicators and Patterns of Specialization in International Trade.NCCR Trade Regulation, 2011.
Katsikeas, C.S., L.C. Leonidou, and N.A. Morgan, Firm-level export performance assessment: review, evaluation, and development.Journal of the Academy of Marketing Science, 2000. 28(4): p. 493-511.
Bhattacharyay, B.N. and K. Mukhopadhyay, A comprehensive economic partnership between India and Japan: Impact, prospects and challenges.Journal of Asian Economics, 2015. 39: p. 94-107.
WITS, Trade Outcomes Indicators, T.W. Bank, Editor. 2013: Washington DC; https://wits.worldbank.org/
UNSCAP, A., Trade Intensity – Technical Notes, UNSCAP, Editor. 2020: Thailand; https://artnet.unescap.org/APTIAD/trade%20intensity.pdf
Hausmann, R. and B. Klinger, Structural transformation and patterns of comparative advantage in the product space.2006.
Hausmann, R., J. Hwang, and D. Rodrik, What you export matters.Journal of economic growth, 2007. 12(1): p. 1-25.
bdNws24.com, Chinese president Jinping promises to cut trade deficit with Bangladesh, in bdnews24.com (Accessed in December 2020). 2020: Dhaka, Bangladesh.
Lee, J., Export specialization and economic growth around the world.Economic Systems, 2011. 35(1): p. 45-63.
Hirschman, A.O., National Power and the Structure of Foreign Trade.Los Angeles: University of California Press, 1945.
Hirschman, A.O., The Paternity of an Index.The American Economic Review, 1964. 54(5)( 761).
Herfindahl, O.C., Concentration in the U.S. Steel Industry., in Unpublished Doctoral Dissertation. . 1950, Columbia University: NY.
Vassilopoulos, P., Models for the identification of market power in wholesale electricity markets.UFR Sciences of Organizations, DEA, 2003. 129.
Berger, E.A., Survival of the fittest: an assessment of the herfindahl index and product market competition.Available at SSRN 2367374, 2014.
Tesfay, Y.Y. and P.B. Solibakke, Structure of the Norwegian Imports Trade Concentration: The Seemingly Unrelated Autoregressive Regression Modelling Approach.Global Business and Management Research, 2016. 8(2): p. 19.
Canada, G.o. Dependency or diversity? The concentration of Canadian exports (Accessed in December 2020). 2016 2016]; Available from: http://tradecommissioner.gc.ca/canadexport/158554.aspx?lang=eng.
Export Promotion Bueraue of Bangladesh, E., Statistic Data-2016-2017d (Accessed in December 2020). 2020: Dhaka, Bangladesh; http://epb.gov.bd/site/view/epb_export_data/-
Md. Ekram Hossain, et al., Dynamics of Comparative Advantage and Competitiveness of Textile and Apparel Industry: An Empirical Analysis for China and Bangladesh.British Journal of Economics, Management & Trade, 2017. 16(01): p. 1-19.
Bangladesh, E.P.B.o. Market Access Facilities for Bangladeshi Exportable. 2020 [cited 2020; Available from: http://www.epb.gov.bd/site/page/7bd7d4d7-cdba-4da3-8b10-f40da01e49b6/Market-Access-Facilities.
Nations, T.N., New Chinese investment in BD may lower trade deficit, in The New Nations (Accessed in Decmber 2020). 2020: Dhaka, Bangladesh.
Ovi, I.H., Chinese investment may close trade gap, in Dhaka Tribune (Accessed in December 2020). 2020: Dhaka, Bangladesh.