Beijing Raises Export Tax Rebate And Worries Bangladesh

Bangladesh garment manufacturers and Exporters Association (BGMEAZ) said yesterday that Bangladesh textile exports face more intense competition, because China's textile and clothing export rebate rate from 11% to 13%.

BGMEA chairman Anwarul Alam Chowdhury Parvez said China's tax rebate adjustment came into effect on Friday to help Chinese textile exporters overcome difficulties such as appreciation of the renminbi, weak demand and rising costs.

This means that China's competitiveness in the international market will increase, and Bangladesh will face more difficulties in competition with China.

Bangladesh provided 5% cash incentives, down from 25% six years ago.

The president said we are facing the same problem, and the cost of domestic currency appreciation to the US dollar is also rising.

In the past two years, the US dollar depreciated by about 4%, with an average exchange rate of 68 Tucca.

In addition, as other production inputs raised prices, Bangladesh raised oil prices last month and production costs rose 15%.

India poses another threat to Bangladesh. The India rupee depreciates against the US dollar, and the Central Bank of Bangladesh is putting dollars into the market to prevent currency devaluation.

Bangladesh's infrastructure is weak, especially with frequent power failures, high interest rates on bank loans and high pportation costs, which have led to the failure of Bangladesh to compete with China and India.

He said we have to pay 20% interest on bank loans, but Chinese exporters only need to pay 3% interest.

We need 42 days to export goods to the United States, and our two competitors only need 18 days.

In the financial year ended in June 2007, Bangladesh exported a record of US $12 billion 180 million, of which 9 billion US dollars were exported.