China is going to increase the tariff-free quota benefit for more Bangladeshi goods to minimise the trade imbalance between the two countries.

Some 97 per cent goods originated from Bangladesh have been enjoying duty benefit to Chinese markets since July 2020 and now the Jinping administration offered raising it to 98 per cent.

The 97 per cent package covers nearly 9,000 Bangladeshi goods and the proposed 98 per cent threshold will cover more than 9,000 items meant for Chinese markets.

However, Bangladesh will lose the duty benefit for 98 per cent goods after its graduation to a developing nation in 2026 if the country does not sign any trade deal with China.

The tariff-free quota will be expanded by 1 percentage point as soon as possible, said Li Jiming, the Chinese ambassador to Bangladesh.

"We are at the final stage now," Jiming said at a seminar on "Making the most of market access in China: What needs to be done?" jointly organised by Bangladesh China Chamber of Commerce and Industry and the Research and Policy Integration for Development at Pan Pacific Sonargaon in Dhaka.

"One per cent is very crucial," he said. "We also need to make the free trade agreement (FTA). A joint working group is working on it. I hope the FTA can be signed as soon as possible," the Chinese envoy said.

The signing of the FTA with China will not only increase trade, but also fuel investment and give a boost to the two countries' tourism and education, he also said.

The Chinese ambassador also said Bangladesh may also join the Regional Comprehensive Economic Partnership, the largest regional free-trade bloc led by China.

The envoy also said a bilateral joint economic committee will sit in an important meeting at the end of this month to resolve pending issues related to livestock and agriculture.

"Deeper financial cooperation is also needed between the two countries," the envoy also said, adding that setting up of Chinese banks in Bangladesh is also important for currency exchange with Bangladesh in future.

However, peace and political stability are important for the economic growth of this region, Jiming also said.