China-Bangladesh
Bilateral Ties
Geopolitics at Play?

Christmas this year, seems to have come early in Bangladesh! With the intention to explore possibilities that lie in Bangladesh, Chinese President Xi Jinping, visited Bangladesh in early October. Jinping is China’s first President to visit Dhaka in 30 years. And he came bearing gifts worth $23 billion! 

The visit had more than mere high level exchanges and strategic communication in it, as the two countries signed 27 agreements on various issues. The agreements cover several crucial sectors, which include agriculture, infrastructure, transportation, energy and power, information technology, and even development of living standards.

The most notable deal of them all is the installation of a power plant in Bangladesh, with a capacity of 1,320 MW. It was signed with China’s TBEA (Tebian Electric Apparatus), which will invest about $1.6 billion in the project in the next few years – Dhaka had already signed a deal worth $1.1 billion with Jiangsu Etern Group of China to strengthen its power grid network earlier. It’s worth noting that Bangladesh’s current installed capacity is 12,780 MW, which it plans to increase to 20,000 MW by 2021.
Sources say that Bangladesh was expecting about $40 billion in loans from China – including $2.57 billion for the Padma Bridge rail link project, $3.03 billion for the Dhaka-Chittagong railway project, $1.39 billion for Dhaka-Ashulia elevated expressway, etc. However, for a starter, $23 billion in investments is nothing to complain about!

The visit of Jinping came just before the 8th BRICS Summit that was hosted by India (in Goa) in the middle of October. India had also invited leaders of the leaders of BIMSTEC (the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) for a BRICS-BIMSTEC summit on the the sidelines of the main BRICS conference. Prime Minister Sheikh Hasina of Bangladesh represented the country and expressed solidarity with India over its concerns about terrorism being exported from our India’s neighbour in the west.
While Bangladesh and India seem to be on the same page when it comes to tackling the threat of terrorism, China seems to have stolen the march when it comes to trade and investments. Interestingly, the Dragon is Bangladesh’s biggest trading partner, with exports from China touching $13.9 billion in CY2015. The new developments may make India jittery, especially since India’s $2 billion credit line to Bangladesh, announced last year, pales in comparison to China’s investments. China though believes that Bangladesh has enough room for both India and China.

Saudi Arabia
Port Ranking
Surfing The Fastest Wave

Pronouncing Saudi Arabia’s strategic commercial prowess, Container Management, a UK-based journal, in its last month’s report mentioned that Saudi Arabia’s King Abdullah Port is the fastest growing port among the publication’s list of top 120 ports.

This is the first commercial port in Saudi Arabia that is fully privately owned, developed and operated. It is run by the Ports Development Company and is strategically located about 100 km north of Jeddah on the coast of Red Sea, one of the busiest maritime shipping lanes in the world, with direct access to extensive transportation networks and urban centres. The management expects the port to complete its first phase of bulk cargo terminals with a capacity of 3 million tonne, in addition to the RORO (roll-on/roll-off) terminals with a capacity of 300,000 CEU, by the beginning of 2017. And, once finished, the port will be able to handle 20 million containers (TEUs), 1.5 million vehicles (CEU) and 15 MMT of clean bulk cargo annually.

The port is increasingly contributing to the Kingdom’s regional and global role in trade, logistics and shipping. And, despite weak oil price and slow global economic growth, King Abdullah Port has achieved rapid growth. In 2015, the annual throughput in King Abdullah Port doubled, to reach 1.3 million TEU. It’s worth noting that the Gulf is also home to the second fastest-growing port in the world, the Khalifa Port, in Abu Dhabi.

Russia
Wheat Supremacy
G(r)aining a stronghold

Russia will no longer be synonymous only to oil and gas when it comes to trade. The country is now taking measures to reclaim its leadership in the world wheat trade, a position it enjoyed during the times of the Czars.

This season (trading year 2016-17), Russia has toppled US in wheat exports for the first time after several decades – Russia exported 30,000,000 metric tonne (MT) of wheat this season versus 26,000,000 MT exported by US (USDA data) – to become the largest exporter of the foodgrain. Expecting a bumper crop this season, Russian President Vladimir Putin said, “This year we are expecting the best grain harvest in modern Russian history, about 115 million tonne. Our country has taken a leading position in the world in the export of wheat.”

Russia resumed supplies to Egypt, after Egypt lifted restrictions on Russian wheat in September, and is now gaining footholds in countries such as Nigeria, Bangladesh and Indonesia. Wheat exports were also buoyed by Russia’s decision to lift export duty on wheat in September. The duty was imposed last year to stabilise the internal grain market. This spike in exports has happened four decades after Soviet Union turned to US shipments of wheat and corn to offset shortfalls in harvest.

Vietnam-EEU
Free Trade Agreement
Strengthening bonds

Now, Vietnam seems to be looking beyond just the Trans-Pacific Partnership (TPP). In a meeting held in the first week of October, Russia-led Eurasian Economic Union (EEU) and Vietnam ratified a free trade agreement (FTA) which was signed in 2015. The accord opens the gates of EEU’s market – consisting of Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan – of about 200 million potential customers to Vietnam.

The trade agreement covers more than 90% of the goods traded between the two signatories. And, in the first year alone, it is said that exporters from EEU will save between $40-60 million, while exporters from Vietnam are likely to save around $5-10 million in tariffs.

Vietnam mainly imports mineral fuels, machinery, fertilisers, and distillates from EEU – it exports boilers, electrical machinery, knitwear, etc., to EEU. And going forward, the two expects to double their trade to $10 billion by 2020.

Following the ratification, Moscow hosted another meeting later in the month, where the duo discussed investment projects on customs warehouses and logistics centres for exports and imports goods to give immediate boost to trade.

The EEU trade bloc, once considered a poor cousin to European Union (EU), now seems gaining momentum with several countries across the globe such as China, Israel and Indonesia looking forward to negotiating a free trade agreements with the bloc.

USA
Export Finance
A micro boost?

If you’re one of those who are under the impression that US has scaled its full potential in terms of exports, then consider this: two-thirds of the world’s purchasing power is outside America, and yet only about 1% of America’s 28 million small businesses are reaching
customers beyond US borders.

Last month, the US Small Business Administration (SBA) provided federal states a total of $18.85 million to support regional SME export growth and increase the number of small exporters. The aid will assist US states to support small businesses in their export-related activities, including participation in foreign trade missions, foreign market sales trips, as well as in designing international marketing campaigns. It’s worth noting that, SBA, through its export loan guarantee programme, can finance up to $5 million to help SMEs fulfil export orders. Expect more Made in America products at your doorsteps in the near future!