According to a commentator’s article published by Bangladesh’s “Financial Express” on February 23, as the new crown pneumonia epidemic has caused great harm to China, the world’s second largest economy, any relationship with Countries with close economic and trade relations with China should pay attention to the economic and trade impacts that will be affected. About 30% of Bangladesh’s total imports come from China, and many raw materials used in the textile industry come from China. Data as of February 21 show that the quantity and value of imported goods from China have dropped by 20.87% and 8.29% respectively since January 1. Bangladesh’s textile industry, in particular, has been hit hard by the decline in raw material imports. Because Bangladesh cannot import substitute products from other alternative channels at the price of textile raw materials originally imported from China. However, local raw material and other ancillary material processing companies took this opportunity to increase product prices.
The decline in Bangladesh’s imports from China will also affect Bangladesh’s fiscal and tax revenue because tariff revenue will decline. According to estimates from the Bangladesh National Revenue Service, if the adverse economic impact caused by the new coronavirus epidemic continues, the Bangladesh Revenue Service’s import tariff revenue will be reduced by 7-8% compared with the expected target. Since many imported raw materials in the garment processing industry enjoy tax-free policies, the impact of losses will not be as high as double digits.
The article also stated that for many countries, China has always been a stable source of production and suppliers that provides a variety of high-quality and low-price goods and services. If there are problems in this part of the supply chain, it will aggravate other impacts caused by the epidemic.
