China- SAARC trade and investment integration and its benefits have been discussed

1. 1
China-SAARC Trade
&
Investment Relations

2. 2
SAARC Imports from China
SAARCImport From China
0
10000
20000
30000
40000
50000
60000
70000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
InMillionUS$
SAARCImport From
China
Source: IMF Direction of Trade Online Statistics,
Year
Amount in Mn
US$
2003 7500
2004 12500
2005 17500
2006 24000
2007 36500
2008 45000
2009 42000
2010 58000

3. 3
SAARC Exports to China
SAARC Export to China
0
5000
10000
15000
20000
25000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
InMillionUS$
SAARC Export to
China
Source: IMF Direction of Trade Online Statistics,
Year
Amount in Mn
US$
2003 5000
2004 8000
2005 1000
2006 12000
2007 15000
2008 21500
2009 15000
2010 23000

4. 4
Investment of China to SAARC
China's Investment to SAARC
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2008 2009 2010 2011
MillionUS$
China's
Investment to
SAARC
Year Million US$
2008 1600
2009 750
2010 2760
2011 4020
Source: www.heritage.org/research/reports/2012

5. 5
Bangladesh-China
Trade and Business
Relation

6. 6
Import of Bangladesh from China
Year Amount
(Million
US$)
% of Total
Import
2010-11 5906 20
2009-10 3790 17.7
2008-09 3418 15.18
2007-08 3136 14.35
2006-07 2572 14.98
Bangladesh Import fromChina as % of Total Import
0
5
10
15
20
25
2010-11 2009-10 2008-09 2007-08 2006-07
Percentage %of TotalImport
Source: Bangladesh Bank

7. 7
Export of Bangladesh to China
Year Amount
(Million
US$)
% of Total
Export
2010-11 319 1.39
2009-10 179 1.10
2008-09 97 0.62
2007-08 107 0.76
2006-07 93 0.76
Bangladesh Export to Chinaas%of Total Export
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
2010-11 2009-10 2008-09 2007-08 2006-07
Percentage
%of TotalExport
Source: Export Promotion Bureau

8. 8
Exports and Imports share of
Major Trade Groups (%)
Year/Trade Groups APTA ASEAN SAARC EU APEC NAFTA
2006 Exports 11.83 6.35 1.31 37.82 45.07 13.84
Imports 10.52 5.55 1.92 38.21 47.19 20.55
2007 Exports 12.58 6.20 1.33 38.20 44.48 13.27
Imports 10.95 5.45 2.0 38.64 45.69 18.99
2008 Exports 12.81 6.26 1.39 36.65 44.21 12.76
Imports 11.63 5.8 2.31 37.42 45.51 17.69
2009 Exports 14.00 6.5 1.65 36.58 45.05 12.81
Imports 12.77 5.75 2.60 36.56 45.50 17.22
2010 Exports 15.13 6.93 1.80 33.93 47.66 12.93
Imports 14.28 6.20 2.73 34.21 48.26 17.43
Source: UNCTAD Handbook of Statistics-2011

9. 9
• It is apparent for the figure of the previous slide that
among all regional trade grouping SAARC is having
the lowest trade among the partner countries.
• India shares the largest portion of the trade within
the SAARC and other member countries are having a
very insignificant portion of the pie.
• As almost all the SAARC countries are having trade
with China, China-SABF can be a strong forum for
better regional, social and economic integration.

10. 10
Position of Bangladesh
Among SAARC

11. 11
Export of Bangladesh to
SAARC Countries in 2010-11
Countries Amount
in
Mn.US$
Percent
age(%)
India 512.50 78.55
Pakistan 86.79 13.30
Sri Lanka 34.73 5.32
Nepal 10.84 1.67
Afghanist
an
3.5 0.54
Bhutan 3.12 0.47
Maldives 0.92 0.15
India
79%
Pakistan
13%
Sri Lanka
5%
Nepal
2%
Afghanistan
1%
Bhutan
0%
Maldives
0%
India
Pakistan
Sri Lanka
Nepal
Afghanistan
Bhutan
Maldives
Source: Export Promotion Bureau

12. 12
Import of Bangladesh from
SAARC Countries in 2010-11
Countries Amount
(Mn.
US$)
Percent
age
(%)
India 4564.14 85.41
Pakistan 670.81 12.55
Nepal 48.46 0.90
Sri Lanka 27.57 0.52
Bhutan 18.58 0.34
Afghanista
n
12.62 0.23
Maldives 1.5 0.02
Maldives
0%
Bhutan
0%
Afghanistan
0%
Nepal
1%
Sri Lanka
1%Pakistan
13%
India
85%
India
Pakistan
Sri Lanka
Nepal
Afghanistan
Bhutan
Maldives
Source: Bangladesh Bank

13. 13
Driving forces of globalization:
• Private sector emphasis
increased private sector activity powered by
measures such as privatization and tax
reduction;
• Public deregulation
lowering of government-imposed regulatory
barriers which have formerly impeded market
entry;
• Technological changes
significant reduction of costs to enter
international markets and expand respective
activities.

14. 14
Impediments to Internationalization
• Financial factors,
• Regulation/bureaucracy,
• Language/cultural parameters,
• Competitive concerns,
• Double taxation concerns
• Personnel availability, etc.

15. 15
The Benefits of China-SAARC
Integration for Socio-Economic Bridging
• China shares a geographical border with five of the eight
SAARC states, namely Afghanistan, Pakistan, India, Nepal
and Bhutan.
• Both historically and geographically, therefore, China bears a
number of intrinsic connections to the South Asian region.
• Despite the fact that China does not fall within the
traditionally acknowledged boundary lines of South Asia, it
has a long history of engagement with its neighbors in that
region.
• An important first point to make with regard to the prospect
of deeper economic integration between China and the
SAARC nations is the vast scale of the potential benefits
involved.

16. 16
• SAARC and China both are characterized by high levels of
extreme and moderate poverty. Successful integration will
generate mutual gains for both regions, these benefits
would accrue to an immense cluster of societies and
individuals, ideally with sizeable consequences for poverty
alleviation efforts.
• China's growth boom in recent years has been
geographically uneven. The greatest beneficiaries of
increased trade and foreign investment in China have
largely been its coastal cities, such as Shanghai and
Guangzhou, while the provinces on its landlocked western
border which suffer from high transport costs and greater
distance from China's major export markets have generally
experienced lower growth.
• Closer integration with South Asia might provide China with
a means of achieving more widespread growth.
The Benefits of China-SAARC
Integration Cont…

17. 17
• Climate change is particularly a relevant concern for
China, whose rapid growth and industrialization has
had adverse impacts upon the environment further
increases the benefits to China of regional
cooperation with its South Asian neighbors.
• A collaborative approach to the issues of poverty
alleviation and disaster relief, as well as an attempt at
promoting a multilateral human resources training
program, bilateral infrastructure development and
bilateral energy cooperation can be done through the
integration of China with South Asian countries.
The Benefits of China-SAARC
Integration Cont…

18. 18
• Some measures may be taken to improve China-
SAARC trade such as: removal of non-tariff and Para-
tariff barriers, the granting of preferential market
access to South Asian states and the relocation of
labor-intensive industries from China to South Asia.
• Some measures may also be taken to improve
investment such as the sharing of information and the
exchange of fact-finding missions to uncover potential
investment opportunities, investment in infrastructure-
building projects and a general increase in investment
flows from China to South Asia.
The Benefits of China-SAARC
Integration Cont…

19. 19
• SAARC not only lacks the resources to initiate meaningful
projects for regional integration but also misses out on a
large proportion of the spill-over benefits. China's
engagement with SAARC could, therefore, address some of
these shortfalls.
• Successful transition from extreme poverty to impressive
growth since the beginning of its market reforms in 1978
with the member states of SAARC, China nowadays is viewed
as a desirable role model for the collectivity of South Asian
states.
• China's reduction of extreme poverty from 40% to 8% of its
total population over the last two decades as being 'perhaps
one of the wonders of the 21st century'.
• There are valuable lessons to be learnt by South Asia from
China, and the close association with SAARC would
effectively facilitate such a learning process.
The Benefits of China-
SAARC Integration Cont…

20. 20
• China is like an 'economic ocean' from whose vast
waters, presumably, the South Asian economies might
drink to satiation while still barely skimming the surface.
• The potential for integration between China and SAARC
is not limited to trade only. Important opportunities also
exist for investment, technology transfer and
infrastructure development, all of which could produce
large regional gains.
• Moreover, China's entry into the equation of regional
integration would facilitate a greater balance of power
by diminishing India's dominance in South Asia that
would facilitate greater openness to regional trade and
investment, thereby benefiting the region as a whole.
The Benefits of China-SAARC
Integration Cont…

21. 21
• The strong position that China enjoys in other significant
multilateral organizations is an important facet of China’s
integration with SAARC.
• Despite the efforts of SAARC over the years, South Asia
remains the 'least integrated region in the world'. Thus, the
cultivation of alliances with other multilateral institutions is
important for SAARC, not merely as a means of learning, but
also in order to consolidate its position and gain some much-
needed credibility as a regional actor.
• Consequently, China's position as a permanent member of the
United Nations Security Council and its involvement in other
regional blocs such as ASEAN (through ASEAN Plus Three)
and APTA are likely to benefit SAARC's standing in the
international arena.
The Benefits of China-SAARC
Integration Cont…

22. 22
• If SAARC is truly to benefit from, for instance, Chinese
investment in regional energy and infrastructure
development projects, it must be prepared to take
collective action to facilitate such initiatives.
• Involvement of the civil society in policy-making and
project development should be highlighted in
furthering SAARC's interactions with China. Such
efforts could go some way towards countering
stagnation in official channels.
• Chamber-to-Chamber relation among these countries
should be strengthened.
Concluding Remarks

23. 23
• Most of the SAARC LDCs are suffering from supply
side constraints – two important BRIC members, e.g.
China and India could join hands to support LDCs.
• An effective study can be commissioned to identify
common areas of actions to move forward.
• Secretariat of China-SABF should maintain close
cooperation with all leading chambers of SAARC
countries so that similar type of useful programs can
be done throughout the year.
Concluding Remarks Cont…

24. 24
Thank You
Very Much