Bangladesh is experiencing a significant increase in foreign direct investment (FDI) from China, which has reached US $ 2.67 billion as of September 2024, positioning China as the country’s second-largest investor. This investment figure comprises US $ 1.41 billion from mainland China and US $ 1.26 billion from Hong Kong, according to the Bangladesh Bank (BB). The surge in FDI reflects a strategic move by Chinese companies to diversify their operations amid the ongoing US-China trade war.
The low-cost labor and expanding industrial landscape of Bangladesh have made it an attractive alternative for Chinese firms looking to shift away from traditional manufacturing hubs. The textile sector, pivotal to Bangladesh’s export economy, has attracted the largest share of Chinese investment, amounting to US $ 760.14 million. Additionally, the telecommunications sector has seen substantial funding, with US $ 322.45 million dedicated to enhancing 4G and 5G networks.
Investment from China is also flowing into critical sectors such as agriculture, energy, and pharmaceuticals, contributing to the strengthening of Bangladesh’s infrastructure and supply chains. The trading sector alone has garnered US $ 203.78 million, fostering modernisation in logistics and boosting the nation’s global competitiveness.
Experts believe that the trend of rising Chinese investment could continue if Bangladesh creates a more conducive business environment. Al Mamun Mridha, former secretary general of the Bangladesh China Chamber of Commerce and Industry (BCCCI), emphasised that improving infrastructure and regulatory frameworks could attract increased Chinese investment, particularly in sectors like textiles.
Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue (CPD), cautioned that while China invests heavily in countries like Vietnam and Cambodia, Bangladesh has yet to secure the same level of commitment. However, he affirmed that the evolving global economic landscape and the trade war have positioned Bangladesh as a viable option for Chinese investors, provided the country capitalises on these opportunities.
Despite the presence of Chinese investments, Rahman noted that Bangladesh has not fully leveraged its potential. He highlighted the need for further development of the special economic zone for China in Anwara, Chattogram, which has yet to be realised even after nine years of planning.
The US Government’s recent imposition of an additional 10 percent tariff on Chinese goods has created an opportunity for Bangladesh. With duty-free access to European, UK, and Canadian markets, Bangladesh could serve as a gateway for Chinese firms looking to mitigate the impact of high tariffs on their exports.
Riad Mahmud, managing director of National Polymer Group, noted that while his company has not received direct investment proposals from China, interest from US buyers has increased, often with the assistance of Chinese firms. He emphasised the importance of Chinese partnerships for accessing the US market, given the relative immaturity of Bangladesh’s synthetic shoe industry compared to those in China and Vietnam.
The construction of the Chinese Economic and Industrial Zone (CEIZ) in Chattogram is still pending, although the Bangladesh Economic Zones Authority (Beza) has initiated discussions to expedite the project’s implementation. The Bangladesh Economic Processing Zones Authority reported a steady rise in Chinese investment in export processing zones, with 29 investment agreements finalized between July 2024 and March 2025, 19 of which involve Chinese companies.
This growing interest underscores Bangladesh’s potential to attract further foreign investment and drive its economic growth amid shifting global trade dynamics.