China Announces "Zero Charges" For Bangladesh, India Textile Industry Is Facing Difficulties, Or Will It Lay Off 10 Million?

China's economic development is obvious to all over the world, and the strength of the national economy is growing. Meanwhile, China has become the world's largest trading nation and the largest middle class market in the world. At the level of foreign trade, China has always adhered to the principle of fair trade and free trade. However, some countries are "not satisfied" with the way of cooperation. The United States has listed "entity list" several times, including 140 Chinese enterprises, and India has followed closely. It has repeatedly "charged" goods exported to India, which has caused trade barriers.

The trade barrier in India has not obviously affected China's foreign trade, because in the trade with India, China mainly buys India's rice, minerals, timber and processed products, while India needs more products such as China's electrical appliances, communications equipment and industrial equipment. The added value of the two commodities is not exactly the same. India's neighbor Bangladesh is extremely friendly to China's trade than India's foreign policy toward the US. Bangladesh is a big agricultural country in South Asia, and its economic structure is very different from that of India. Mainly rely on the export of agricultural products to achieve the growth of foreign trade. For example, a large part of Chinese herbal medicine ephedra imported from China is from Bangladesh.

Recently, China announced that Bangladesh's export commodities to China will enjoy "zero fee" treatment since July 1st, which is undoubtedly a great opportunity for Bangladesh. Bangladesh's exports of agricultural products have also been severely hit in the face of the continuing weakening of the global economy, and China's action is undoubtedly a "strong agent" for Bangladesh's economic recovery.

Data show that in the first half of 2019, China's imports from Bangladesh increased by nearly US $800 million, an increase of more than 7.2%. Among them, textiles and textile processing products were the main commodities for Bangladesh's exports to China. Over the past 2 years, Bangladesh exported over 230 million US dollars of clothing and cotton textiles to China. The prospect of excellent textile industry in Bangladesh has also made domestic textile enterprises see the opportunity of industrial transformation. In 2019, Chinese enterprises invested 120% in Bangladesh. China has become the most important source of foreign investment in Bangladesh.

Bangladesh and China are the world's top two textile exporters, while China's industrial transformation of high polluting and low return enterprises has indirectly promoted the establishment of factories in China's textile industry to Bangladesh. Competition in the same field has not hindered the economic development of both sides, but promoted the further development of Bangladesh's economy. In contrast, India has to be "miserable". In April 2020, the India Garment Manufacturers Association (CMAI) issued a statement that if there is no further support from foreign investors, India textile industry may lay off 10 million people in 2020.

Many readers may think that laying off 10 million people in India textile industry is exaggerating. Therefore, it is necessary to introduce the difference between India's textile industry and China's textile industry. The current situation of India's textile industry still stays in the 80s of last century, and even the spinning and weaving industry of some underdeveloped areas still stays in the Republic of China. Textile processes involved in printing, dyeing, washing, drying, weaving and other processes need manual completion. We often see in India movies that women who wash large quantities of cloth on both sides of Ganges RIver are workers in the textile industry. According to the statistics of the India clothing manufacturers association, the number of workers engaged in textile industry in India is between 25 million and 32 million. Therefore, the India textile industry is facing difficulties and 10 million people are not alarmed.

However, even though the textile industry in India has already been in such a difficult position, India seeks instead of seeking global cooperation. Instead, it starts all kinds of "trade protection" and increases tariffs on China's exports to India. Since the beginning of 2020, India has taken 10 "charging" measures for China's export commodities, and even launched anti-dumping investigations to China's textile raw material polyester yarn exported to India.

In fact, the discerning eye can see that the plight of India's textile industry is not caused by trade, but because of the overall backwardness of India's textile industry. India textile industry, which still stays in artificial textile, dyeing and drying, is naturally unable to compete with the modern mechanized textile industry. India's trade protection policy is not only unable to protect its textile enterprises, but because of its lack of competitiveness due to technology closure, it is more difficult to stand on the international market. At the same time, Bangladesh's textile industry will take the lead in India in terms of equipment, capital, technology and human resources after accepting the middle and lower reaches of the textile industry that has been fully accepted by China's industrial transformation. At that time, Bangladesh will be the biggest competitor to seize the global textile market.

It is reported that the textile industry and raw materials are one of the three major products exported to China by India. With the further cooperation between Bangladesh and China, once the industry transfer is completed, India needs to face not only Bangladesh, but also the competitiveness of China's textile industry and Bangladesh's textile industry worldwide. India will lose its qualification to compete with Bangladesh in the textile industry.