A blossoming business partnership

For Armenian businesses, China looms large.

For Armenian businesses, China looms large. Trade and business relationships between the two countries have strengthened recently, with the value of trade doubling in the past three years.

According to Artur Petrosyan, Trade and Supply Chain Manager of HSBC Armenia, a survey of Armenian corporate customers in 2010 revealed that China is the main trade partner for more than half of Armenian businesses.

IMEX Group, one of Armenia's biggest companies, incorporates the IDEAL System store chain and has long enjoyed strong trade relations with Chinese exporters.

"Initially, we had the impression that Chinese products were unlikely to be a good fit for Armenia," Norayr Khachatryan, President of IMEX Group recalls. "But in fact, we were impressed by the high quality of Chinese goods. Today there are almost 40 Chinese companies among our business partners."

By carrying out payments in renminbi, we are building a completely new atmosphere with our Chinese partners

He is struck by the sheer pace of China's development: "I visit there twice a year, and each time I notice significant changes in the country.

"We stayed in a hotel which is the tallest building in Shanghai - 430 metres. A month earlier they had started building a skyscraper that will reach 650 metres. During our stay two floors were already complete, and the whole building is expected to be in use by the beginning of 2013.

"I feel nothing but respect for such drive and achievement. What is most interesting is that the quality of the result is not compromised."

HSBC has held strategic business partnerships with IMEX Group since the company opened its first-ever corporate account. Today the Group enjoys the benefits of trading with its Chinese partners in renminbi through the bank.

"For us it's very beneficial," says Norayr. "It allows us to make direct payments without additional foreign exchange costs - receiving funds in Chinese yuan and freely converting it into other currencies.

"By carrying out payments in renminbi, we are building a completely new atmosphere with our Chinese partners - it's an arrangement that makes them feel more comfortable."

Norayr says he learned much about the renminbi's global expansion - historic and predicted - during an HSBC exchange to China in 2011. He was also fascinated to pick up some nuances of Chinese business thinking.

"Armenian and European businesspeople like to have a face-to-face meeting to better understand their partners," he says. "But when a Chinese businessperson needs to discuss important questions with you, he asks you to write it down.

"Although I didn't go to Shanghai with the intention of signing new contracts, I did in fact make some fruitful contacts. For example, I made an agreement with a producer of fireproof materials from Poland. After my return to Yerevan, we started negotiations - and probably very soon we will have a new European partner."





Key points

  • China is the main trade partner for more than half of Armenian businesses
  • Trading in renminbi is enabling IMEX to strengthen partnerships in China
  • It is key to understand how business culture differs between Asia and Europe.
Best Global Trade Finance Bank, GTR Leaders in Trade 2014

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