Two Canadian businessmen, Michael Spavor and Michael Korvig, were detained in China in December 2018 on accusation of espionage, after the detention of Huawei executive Meng Wanzhou in Vancouver on a US extradition request. Although the Canadian businessmen were released recently, and the diplomatic row seems to be ending, the risk of such exchanges in the future, be it geopolitical or personal, cannot be ruled out. China is still one of the top national security concerns for the country.
In the past too there have been several trade-related disputes between Canada and the PRC, which included complaints against import restrictions, China’s espionage of Canadian expertise and theft of intellectual property, as well as demands for technology transfer.
Considering the expanse of opportunities and the market size of China, it would be necessary to come up with alternatives that are effective, and one country that fits the bill is Bangladesh.
Bangladesh has been emerging as the world’s fastest-expanding economy, and with that it has been a major alternative to the manufacturing companies who have explored their options during the time the US-China trade war kicked in, or even before that. It is renowned for its readymade garment export, which also is a driving force behind its economy, and a 20% contribution to its GDP. Its source of attraction has been its competitive labour costs which still remains one of the lowest in the World.
Some of the challenges faced by manufacturing units have been environmental compliances in factories and underdeveloped logistics infrastructure, but the country has done some commendable work in these areas.
During the pandemic, Bangladesh has become a centre of attraction for the global business community, and the country has been taking drastic steps to improve its infrastructure. The scope for investment is large in the areas of energy, infrastructure and consumer products.
The government in Bangladesh has also been taking steps to improve the country’s business climate and regulatory environments so as to improve its ranking in the Ease of Doing Business Index. It has been successful in increasing the network capacity of electric grids and reducing corporate income tax for companies based in Dhaka and Chittagong.
The government has also introduced an automated system for customs data, which is a fully computerised customs clearance system, among various other things. The country has also been working to improve its human capital and make them productive as per the needs of the market.
Bangladesh has been considered ideal for labour intensive industries, considering its low manufacturing wages. The country continues to offer better and more opportunities to the Canadian manufacturers willing to enter the consumer market.
With the rise in foreign manufacturing units, the country has also been witnessing a rise in investments and growing wealth among the people. Therefore Bangladesh also provides for a consumer market of over 200 million people hoping and expecting to transition to a middle income country in the near future.
The world has been seeing the market potential of Bangladesh, and it will be up to Canada to explore and make use of the opportunities available.