Bangladesh eyes investment gain as Japanese firms exit China

japan-bd

Due to the ongoing pandemic, Japan is now incentivizing its companies to shift manufacturing facilities out of China and adding Bangladesh to a list of preferred destinations for relocating the factories.The island nation’s nudge to relocate companies comes at a time when a Special Economic Zone is in the making in Bangladesh to lure Japanese firms’ production facilities. The industrial zone sprawling on 1,000 acres in the Araihazar subdistrict is expected to bring in $20 billion in Japanese investments, according to the BEZA. As wages rose and infrastructure in countries like Vietnam and Bangladesh improved, Japanese manufacturers have already been seeking lower labor costs and supply-chain diversification by moving some output out of China.

According to lto, the number of Japanese companies operating in Bangladesh has tripled to about 300 over the last 10 years. Japan has allocated $350 million in special loans to develop the $1 billion industrial zone, making it the largest such assistance for an SEZ in Asia. Ito said that the country nestled between India and the Bay of Bengal sea is a destination with “good and strong” prospects for Japanese companies and “The pace of recovery is faster in Bangladesh, compared to the neighboring countries.

 

Source: Economic Times, MENAFN

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