In July, the first month of its financial year, Bangladesh shipped 1.82 billion dollars of goods -- the highest export figure in the country's 40-year history, the Export Promotion Bureau said.

This was due to a sharp rise in apparel exports as firms chose to buy from Bangladesh instead of China in a bid to keep costs down, Jalal Ahmed, the head of the EPB, told AFP.

"Our textile exporters are receiving more orders from new markets which previously would source products in China," he said.

EPB figures showed shipments to new markets such as Turkey, Japan, South Africa and China grew 200 percent, although Western Europe and the United States still account for nearly 90 percent of Bangladesh's export market.

Apparel exports rose nearly 30 percent year-on-year, with overall shipments up 25.5 percent, Ahmed said, adding that exports of eco-friendly jute -- known as hessian in Europe or burlap in the United States -- have also surged.

The figures come as Beijing has been forced to increase minimum wages over the past few months following several protests and raising concerns in China that foreign firms may look elsewhere for cheaper labour.

Abdus Salam Murshedy, the head of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said that despite the strong figures, a chronic utilities crisis and shoddy infrastructure was hindering export growth.

"We are ready to grab new opportunities as China becomes increasingly costly. These July export figures are good, but we can do far better," he said.

The government must improve power and gas supplies and find a way to make the country's main port in southern Chittagong town, more efficient, he added.

earlier related report
China buys 6.9 billion dollars of Japan bonds in July
Tokyo (AFP) Sept 8, 2010 - China bought 6.9 billion dollars worth of Japanese bonds in July, Japan's finance ministry said Wednesday, as the Asian giant continues to ramp up purchases of Japanese debt.

China bought a net 583.1 billion yen of Japanese bonds in July, a finance ministry official said. The figure counts long-term government bonds as well as medium- and short term bonds issued by the public and private sectors.

The figure was higher than the 456.7 billion yen worth of securities purchased in June.

The news came after the yen marked a fresh 15-year high against the dollar Wednesday. Currency traders say China's buying of yen-denominated assets, while too small on its own to sharply push up the yen, could be bolstering the currency indirectly.

For the first half of the year, China bought 1.73 trillion yen worth of debt, nearly seven times the full-year record of 253.8 billion yen in 2005.

In May alone Chinese investors bought a net 735.2 billion yen in Japanese government bonds (JGBs).

China has sought to diversify its vast investments away from the dollar and Europe since the onset of the financial crisis.

Most of the bonds bought by China are thought to be used by the government to manage its foreign reserves.

The increase coincides with renewed doubts about the pace of recovery in the United States and Europe and indicates China is putting more of its ballooning foreign exchange reserves into relatively stable Japanese bonds as a result, say analysts.

With around 95 percent held by domestic investors, Japan's risk of default is perceived to be much lower than other countries, even though its public debt is nearing 200 percent of gross domestic product, the highest among developed countries.

However, "China appears to be using JGBs as a temporary shelter and it does not appear to be settling down for a long stay," given the predominance of the short-dated JGB buying, Shuji Tonouchi, a senior fixed income strategist at Mitsubishi UFJ Morgan Stanley, told Dow Jones Newswires.

Echoing that view, last week's China Securities Journal report said that China was unlikely to continue buying Japanese government debt in the coming months due to the yen's volatility.

China's foreign exchange reserves have ballooned in recent years, surging to a record 2.454 trillion dollars at the end of June.

The reserves, already the world's largest, grew 15.1 percent from a year ago, the People's Bank of China said on its website.

One way Beijing has diversified its investments is through sovereign wealth fund China Investment Corp, which manages around 300 billion dollars and has been investing heavily in resources companies.

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