When Chinese businessman Leo Zhuang Lifeng arrived in Dhaka 22 years ago, only one of the two luggage conveyor belts in the airport was functioning. The lighting wasn’t working properly, either.
The rundown airport in the capital of Bangladesh prepared many Chinese and foreign businessmen for what they were about to experience in the country, which was still an economic backwater at the time, with frequent power outages and inadequate infrastructure.
Zhuang, now 51, landed in Dhaka in 1997 to set up garment factories there, taking advantage of the low labour costs and abundant supply of workers. “Back then, there was a lack of daily commodities. It was not even easy to buy instant noodles,” said Zhuang, managing director of the LDC Group, which now employs about 20,000 workers in the country. “But Bangladesh has gone through tremendous changes over the years, though of course you cannot compare those changes to what China has experienced.”
Workers make eyeglasses at a factory owned by a Hongkonger in Bangladesh’s Uttara Export Processing Zone. Photo: Phila Siu
His factory compounds were so big they resembled villages on their own. There were medical centres providing free consultation for staff and their family members, as well as day-care centres for their children.
Such compounds are now everywhere in Bangladesh, as Chinese and other foreign investors have kept coming. This investment has transformed the country into a manufacturing powerhouse with 3.5 million labourers making clothing for local and international brands such as Uniqlo and H&M. Luxury brands such as Michael Kors also have some products made in Bangladesh.
As wages soar in China, more clothing is expected to carry the tag “Made in Bangladesh” rather than “Made in China” in the years to come.
Zhuang, now the president of the Overseas Chinese Association in Bangladesh, estimated there were only 20 to 30 Chinese companies in Bangladesh 22 years ago. By his estimate, that number has since grown to roughly 400 in the relatively young South Asian country, which gained independence from Pakistan in 1971.
The factory compound of Chinese businessman Leo Zhuang Lifeng’s LDC Group has a medical centre and a day-care centre. Photo: Phila Siu
Chinese loans have boosted Bangladesh’s economic growth. For about a decade, it grew at an average of 6 per cent, but is expected to hit 8.13 per cent this year, making the country one of the fastest-growing economies in the world.
Bangladesh’s ability to achieve such fast and stable economic growth over the years has raised eyebrows. In interviews, however, Bangladesh’s Minister of State for Foreign Affairs Mohammed Shahriar Alam as well as Information Minister Dr Hasan Mahmud said the administration was able to handle the debt because the economy was strong.
The information minister also made it clear Dhaka did not want to become dependent on any country, and his administration would befriend any country extending their support to Bangladesh’s development. “We have a wonderful economic relationship with India,” he said, pointing to the billions of dollars in loans India has granted Bangladesh. “Your question is whether we will be able to pay back the (Chinese) loans. No worries for Bangladesh.”
Analysts say Dhaka has avoided the so-called Chinese debt trap because while it cosies up to China, it continues to seek economic partnerships with other countries, in particular India.