The Bangladesh government is set to establish two new economic zones specifically for Chinese investors, further solidifying economic ties between the two nations. This initiative complements the existing Chinese Economic and Industrial Zone in Anwara, Chattogram, and underscores Bangladesh’s strategy to attract foreign direct investment (FDI) and diversify its industrial base.
Officials from the Bangladesh Economic Zones Authority (BEZA) have confirmed that this expansion is in direct response to the increasing interest from Chinese companies in investing in Bangladesh. The new zones aim to provide dedicated spaces for Chinese enterprises to set up manufacturing and industrial operations, fostering greater economic collaboration.
One of the planned economic zones, the Chandpur Economic Zone-1, will be developed by Power Construction Corporation of China Ltd (PowerChina), a state-owned enterprise. This zone will span 3,038 acres and will be located in Matlab North upazila, Chandpur. The development will proceed under a government-to-government (G2G) agreement, highlighting the strategic importance of this project.
The second zone, the Bhola Eco-Development Economic Zone, will be situated in Bhola Sadar and Daulatkhan upazilas. Unlike the Chandpur project, this zone will be developed privately by Leez Fashion Industries Limited, a Chinese company with existing operations in Bangladesh. This demonstrates a dual approach, involving both state-led and private sector initiatives, to attract Chinese investment.
A significant meeting of BEZA’s governing board, chaired by Chief Adviser Professor Muhammad Yunus, is scheduled for Sunday. According to the meeting agenda, the board is expected to approve the establishment of nine new economic zones, including the two specifically designated for Chinese investment. This approval will pave the way for the formal establishment and development of these zones.
Furthermore, BEZA officials have indicated that the upcoming governing body meeting will also address the allocation of land from abandoned jute, textile, and sugar mills under BEZA’s management. This strategic move aims to expedite the process of attracting foreign investment by making readily available land resources. Crucially, the plan includes ensuring adequate gas and electricity supply to these areas, which are critical factors in making them attractive and viable for industrial development.
The existing Chinese Economic and Industrial Zone in Anwara has been a key project in strengthening economic ties. BEZA has already prepared a detailed project proposal for this zone, which has been under development since 2016, and submitted it to the Planning Commission. Officials anticipate that the project will receive final approval at an upcoming meeting of the Executive Committee of the National Economic Council (ECNEC). The expected investment for the Anwara Chinese Economic Zone is substantial, estimated at $1.5 billion. The Bhola Eco-Development Economic Zone is projected to attract even higher levels of investment, with estimates reaching $1.8 billion. The final investment figure for the Chandpur Economic Zone-1 will be determined following a comprehensive technical feasibility study to assess its full potential.
According to BEZA documents, the Chandpur Economic Zone-1 is uniquely located on an island within the Meghna River. This presents both opportunities and challenges. Currently, the zone lacks waterway infrastructure connecting it to the mainland, resulting in the absence of regular transportation links. To address these logistical considerations, BEZA is prioritizing the development of renewable energy projects and agriculture-based industries within the zone, rather than focusing on traditional manufacturing and heavy industrial setups. Following the signing of a Memorandum of Understanding (MoU) between Bangladesh and China for this economic zone, a technical feasibility study will be conducted to thoroughly evaluate its investment potential and determine the optimal development strategy.
BEZA anticipates that the Bhola Eco-Development Economic Zone holds significant potential for attracting foreign investment in key sectors such as garments, textiles, electronics, and ceramics. These industries are expected to be major drivers of economic growth and job creation, with projections indicating the potential to create approximately 40,000 jobs.
Several factors are driving the increased interest from Chinese companies in investing in Bangladesh. BEZA officials have noted that rising US tariffs on Chinese products, which have reached as high as 125% in some cases, have prompted export-oriented Chinese companies to seek alternative investment destinations. Bangladesh’s strategic location, competitive labor costs, and favorable investment policies make it an attractive option for these companies.
Furthermore, Chinese firms that supply raw materials for Bangladesh’s vital textiles and ready-made garment (RMG) industry are increasingly considering relocating their factories to Bangladesh. This strategic move would allow them to supply raw materials at lower costs, enhancing their competitiveness and strengthening the supply chain within Bangladesh.
The growing interest in investment is being further solidified by high-level visits and delegations. BEZA Executive Chairman Chowdhury Ashik Mahmud Bin Harun has announced that a substantial delegation of 200 Chinese business representatives, led by the Chinese Minister of Commerce, will visit Bangladesh in the coming month. The primary purpose of this visit is to explore potential investment opportunities across various sectors. These discussions are being coordinated with the Bangladesh Investment Development Authority (BIDA).
A BIDA official, speaking on condition of anonymity, confirmed that the majority of the 200-member Chinese delegation comprises representatives of companies involved in exporting raw materials for the textiles and ready-made garments industry. These companies already have established trade links with Bangladesh, and their interest in direct investment stems from internal cost analyses that indicate significant potential for cost savings by establishing manufacturing operations within Bangladesh.
In addition to this major delegation, Al Mamun Mridha, former Secretary General of the Bangladesh-China Chamber of Commerce and Industry, revealed that a separate business delegation from China’s Yunnan province, led by the head of state, will also visit Bangladesh next month. This delegation had previously visited Bangladesh last year and engaged in discussions with companies such as ACI and Energypac regarding potential investments in the automotive and electronics industries. “However, due to political changes, progress on those investment plans slowed,” Mridha noted. He confirmed that the Chinese business delegation is now returning to Bangladesh to revive those investment proposals and explore new opportunities. Mridha also emphasized that many Chinese investors are showing strong interest in investing in Bangladesh’s rapidly growing renewable energy sector, as well as the textile, RMG, leather and leather goods, ICT, agro-processing, agro-machinery industries, and the blue economy.
These developments signal a deepening of economic ties between Bangladesh and China, with significant implications for Bangladesh’s industrial development, export diversification, and overall economic growth. The establishment of dedicated economic zones for Chinese investors, coupled with increased trade delegations and investment interest, points towards a sustained increase in Chinese FDI in the years to come.
