Make shorter and more relevant to the title - Empowering Bangladesh-China Bilateral Trade with Robust Banking 

Bangladesh and China have a longstanding history of diplomatic relations, dating back to 1975. In recent years, the economic ties between the two countries have strengthened, with China emerging as a major investor in Bangladesh’s infrastructure and energy sectors. The China-Bangladesh Economic Corridor project is a prime example of this cooperation, presenting significant opportunities for economic growth and development in both countries. However, to fully realize the potential of this project and other initiatives, a strong and reliable banking sector is essential. A robust banking system can provide the necessary financing, support, and risk mitigation tools for businesses to take advantage of the opportunities presented by the corridor. By leveraging the expertise and resources of both countries, we can create a truly world-class partnership that sets an example for others to follow, ultimately driving economic growth and prosperity for both countries.

Just as the economic ties have grown stronger over the years, the bilateral trade volume has also reached new heights in recent times with many milestones. In the fiscal year 2020-2021, the bilateral trade between Bangladesh and China reached USD 25.52 billion, with Bangladesh’s export to China accounting for USD 1.19 billion. In December 2022, China exported $1.96B and imported $80.5M from Bangladesh, resulting in a positive trade balance of $1.88B. In addition to trade, there have been significant milestones reached between Bangladesh and China in terms of money, banking, and trade. In 2020, the two countries signed a Memorandum of Understanding (MoU) on the establishment of a yuan settlement mechanism to facilitate bilateral trade and investment. n the same year, the Bangladesh-China Investment Forum was held, which aimed to promote investment opportunities in Bangladesh to Chinese investors.

For economic development of these countries, the banking sector plays a critical role. In Bangladesh, the banking industry has undergone significant changes in the past few decades, with the emergence of private commercial banks and foreign banks operating in the country. The Central Bank of Bangladesh, Bangladesh Bank, is responsible for regulating and supervising the banking sector to ensure its stability and growth. On the other hand, China has a robust and well-developed banking sector, with both state-owned and private banks operating in the country. The People’s Bank of China is the central bank responsible for regulating and supervising the banking sector.

That being said, both Bangladesh and China face challenges in their respective banking sectors. In Bangladesh, the banking sector has been plagued by non-performing loans (NPLs), lack of corporate governance, and weak risk management. The COVID-19 pandemic has also affected the banking sector, with decreased profitability and increased provisioning. In China, the banking sector faces challenges related to high debt levels, shadow banking, and potential asset bubbles.

However, there are also significant opportunities in the banking sector in both countries. In Bangladesh, the banking sector has significant room for growth, with a large unbanked population and increasing demand for financial services. In China, there is an opportunity for the banking sector to expand its operations globally and play a more prominent role in international finance.

A significant initiative to boost trade and travel, the China-Bangladesh Economic Corridor (CBEC) is a mega-infrastructure project that aims to connect Bangladesh with China through a network of roads, railways, and ports. The project was announced in 2016 during Chinese President Xi Jinping’s visit to Bangladesh, and it is a part of China’s Belt and Road Initiative (BRI). The CBEC project is expected to boost trade, investment, and connectivity between the two countries, and it is considered to be a game-changer for the economic development of Bangladesh.

The success of this CBEC project heavily relies on the banking sector’s ability to provide financing and support to the various stakeholders involved. Banks play a critical role in financing the infrastructure projects, facilitating cross-border trade, and ensuring smooth financial transactions. Therefore, the banking sector is a vital component in realizing the full potential of the CBEC project. The CBEC presents significant opportunities for the banking sector in both Bangladesh and China. As the project expands, there will be a growing demand for financial services, such as project financing, working capital financing, trade financing, and foreign exchange risk management. This presents significant opportunities for banks to expand their services and grow their business. Moreover, banks can also support the project by providing advisory services to businesses and investors involved in the CBEC. This includes providing market insights, financial analysis, risk management advice, and other services that are essential for businesses to make informed decisions and manage risks effectively.

HBL is an international bank with a strong presence in China, contributing significantly to economic cooperation between China and Bangladesh. With offices in Beijing and Urumqi, HBL has established itself as a key player in the Chinese market. As the only bank with a branch in Beijing and an RMB business license in South Asia, the Middle East, Africa, and other regions, they have a competitive edge in facilitating cross-border transactions and supporting bilateral economic ties.

HBL’s expertise in trade finance makes it a valuable partner for businesses engaged in cross-border trade between Bangladesh and China. Its unique offerings highlight its commitment to facilitating the growth of bilateral trade and investment between Bangladesh and China. The bank’s RMB settlement license and RMB client accounts make it a reliable and convenient banking solution for businesses engaged in cross-border trade. The dedicated China Desk provides personalized support for businesses with specific needs, while its RMB salary remittance services make it easier for Chinese expats to manage their finances while working in Bangladesh.

HBL’s commitment to supporting the growth of bilateral trade and investment between Bangladesh and China is reflected in its focus on environmental sustainability and social responsibility. As a subsidiary of the Aga Khan Fund for Economic Development (AKFED), HBL shares its commitment to improving the quality of life for people in the communities they serve while safeguarding the environment. Through AKFED’s investment, HBL is not only supporting the growth of the bank but also the wider economic development of Bangladesh. The bank has launched several initiatives to support sustainable development, including investments in renewable energy and efforts to promote environmental awareness and conservation in Bangladesh.
To sum up, it is clear that the banking sector plays a crucial role in facilitating economic growth and development in both Bangladesh and China. The robust banking system is essential to realize the full potential of the economic ties between the two countries as well as the China-Bangladesh Economic Corridor project. The banking sector’s ability to provide unique financial services is essential to support cross-border transactions and investments and boost bilateral trade and investment.

Therefore, we urge the stakeholders in both Bangladesh and China to continue to invest and commit to the banking sector’s growth and development. As the economic ties between the two countries continue to strengthen, the demand for financial services will only increase. As such, it is critical to ensure that the banking sector is adequately equipped to meet this demand. HBL, with its extensive experience and unique offerings, is well-positioned to support the growth of bilateral trade and investment between Bangladesh and China. There seems to hold great potential for further collaboration between HBL and businesses in both countries to drive growth and prosperity. Through its expertise in trade finance, cross-border transactions, and commitment to environmental sustainability and social responsibility, it aims to play a pivotal role in facilitating economic ties between Bangladesh and China.