Chinese investment in Bangladesh has experienced very high annual growth in recent years. Two factors are driving Chinese investment into Bangladesh. One is that labor cost in China is getting higher. Second there are opportunities in Bangladesh, in power, infrastructure, rails, roads and bridges.

Many of China's labor-intensive export processing units have been shifting to other countries.

Standard Chartered Bangladesh has been involved in facilitating Chinese investment into the Bangladesh economy and has been acting as a bridge between Chinese investors and investment opportunities in Bangladesh.

Bangladesh's exports to China are heavily concentrated on garments despite having duty-free market access of over 4,700 items.

Of nearly 800 million dollar exports to China this fiscal year, 84 per cent were garments.

The trade gap between China and Bangladesh is in favor of China. The Chinese are looking to invest in export-oriented manufacturing, where Chinese companies will make their products in Bangladesh for shipping back home.

Chinese companies would undertake joint ventures with local companies as this would decrease their costs while also providing them with local knowledge.

A lot of Chinese investment in Bangladesh comes via Singapore, Hong Kong or the US. Garments, shoes and toys are some of the labor-intensive industries that may relocate to Bangladesh.