Trade and economic relations between Armenia and China offer Armenian businesses opportunities to enter one of the world's largest consumer markets. China is attractive not only for the scale of its economy, but also for its modern technologies, equipment and manufacturing solutions, which are in demand in international markets. What opportunities does the Chinese market offer Armenian entrepreneurs, what challenges might they face when entering it, which business projects have already proved viable, and how can Chinese technology and equipment be used to develop businesses in Armenia? Markos Arzumanyan, founder of the company Group, discussed these issues and much more on the Economix program.

From Legal Assistance for Armenians to Trading

Arzumanyan noted that when he first arrived in China, he realized that the country differed significantly from the markets he was familiar with and required a particular approach to doing business. “China is a completely different world. It is unlike Russia, America or any of the other countries we know,” he says.

After studying the country's characteristics and local business environment, Arzumanyan decided to establish a company that would provide legal support to Armenians working and doing business in China. According to him, there were about 2,500 Armenians in China at the time. Many came to teach English, while others were studying and trying to earn money on the side. However, not all of them had legal employment status, which led to problems with local law enforcement agencies.

A legal services organization was established to address such issues, initially employing five Chinese lawyers. Consultations were provided to Armenians free of charge. The company also helped entrepreneurs from Armenia who encountered problems when purchasing goods in China.

“I am not a lawyer by training. Moreover, even if I were a lawyer, I would not be able to practice law in China, since the legislation stipulates that only Chinese citizens may do so,” Arzumanyan explains. According to Arzumanyan, the legal services organization now has more than 250 lawyers.

Energy Equipment and Supplier Vetting

Over time, the legal services division became the foundation for expanding the business. Trading and logistics were added. The trading division gradually focused on supplying equipment, primarily for the energy sector. The company entered this segment even before solar energy began to develop rapidly in Armenia.

The products supplied include transformers, inverters, circuit breakers and solar panels. Arzumanyan notes that the company works with leading organizations in this field, paying particular attention to equipment quality and protecting buyers' interests.

He sees the main distinguishing feature of his business model as the ability to support a transaction at every stage by combining legal services, a supplier network and an in-house logistics organization.

The process begins with finding a manufacturer. Chinese lawyers then vet the company: whether it pays its taxes on time, whether it is involved in litigation, and how reliably it operates. Following this review, a contract is signed with the supplier, with Arzumanyan's company overseeing the legal aspects of the transaction.

The next stage is monitoring production and product quality. The client receives photo and video reports that make it possible to track the progress of the order. This is particularly important when buying machinery: according to Arzumanyan, there are cases in which refurbished equipment looks brand-new on the outside even though it has already been used.

To prevent such situations, the company arranges inspections involving accredited organizations. If necessary, direct on-site monitoring is carried out, including supervision of the production process itself. This allows the buyer to see exactly what is being manufactured and the condition of the goods being purchased before they are shipped from China.

Why Buying Independently Can Lead to Problems

Once production is complete, the company takes responsibility for arranging delivery to Armenia. If necessary, it also handles customs clearance, working with customs brokers.

Arzumanyan points out that international logistics today depends on many factors, including military conflicts and restrictions on transport routes. The company therefore tries to choose the safest possible delivery routes, although it acknowledges that it is impossible to anticipate every potential risk.

He also addressed the widespread desire among Armenian entrepreneurs to buy goods directly from Chinese manufacturers, avoiding intermediaries. In his view, the absence of an intermediary does not in itself guarantee a secure transaction. When buyers and suppliers are located far apart and operate under different legal systems, the risk of encountering unscrupulous partners remains high.

“When you have representatives on the ground, you pay a certain amount for intermediary services, but in doing so you can avoid a great many problems,” Arzumanyan notes. In addition to legal protection and quality control, this model makes it possible to obtain warranties of up to several years on purchased products.

Tax Refunds as an Additional Advantage

Arzumanyan identifies another benefit of working through an intermediary: the possibility of recovering some of the indirect taxes paid when purchasing goods in China. According to him, the refund rate depends on the product category and can be approximately 11.5–13%. Since his company is registered in China, it can use the tax refund mechanism available to Chinese entities.

Arzumanyan gives a hypothetical example: if an Armenian client purchases products worth one million dollars, the refundable tax amount could be around $110,000. The exact amount depends on the type of goods. He explains that in a typical direct purchase, the Chinese seller or manufacturer receives the refund. Under the arrangement offered by his company, it participates in the transaction itself, becomes eligible to claim the refund and shares part of it with the client.

According to Arzumanyan, this makes the purchase more cost-effective for Armenian entrepreneurs. The company's commission is around 3–5%: in return, it provides transaction support and ensures the safety and delivery of the goods. The company thus pursues a mutually beneficial model of cooperation: the client receives additional financial benefits and a comprehensive package of services, while the intermediary is paid for organizing the process.

Armenian Products in the Chinese Market

Arzumanyan also noted that his experience with the Chinese market is not limited to imports. The company also tried to promote Armenian goods in China. In 2014–2015, he represented the Armenian Chamber of Commerce and Industry in China. Even before that, while engaged in business, he and his partners opened a supermarket in Xi'an, Shaanxi Province, which stocked Armenian products.

Other Armenian entrepreneurs living in China and importing goods from Armenia also joined the project. They were based in different cities, so Arzumanyan proposed pooling their efforts: supplying products to a shared store, selling them and providing partners with sales reports.

According to him, one obstacle for Armenian exporters was competition from Georgian products. A free trade area between China and Georgia allowed goods to be supplied without customs duties. Armenian goods were at a disadvantage.

At the time, Armenian wine was the main Armenian product sold in China. However, as Arzumanyan notes, the problem lay not only in trade conditions but also in limited awareness of Armenia itself. “Many Chinese people at the time did not even know where Armenia was. When we said we were bringing goods from Armenia, we first had to explain what kind of country it was,” he says.

Arzumanyan therefore believed it was necessary to develop cultural ties between the two countries alongside promoting products. Introducing Chinese audiences to Armenia, its history and its culture was intended to lay the groundwork for interest in Armenian products.

Not all products found buyers equally easily, however. For example, Armenian wines, and especially spirits, did not always match the tastes of Chinese consumers, who had their own traditions of producing and consuming alcoholic beverages, including baijiu rice wine.

Armenian juices were also part of the range. In addition, the products found buyers among China's Russian-speaking population. Both online and offline platforms were used to promote the goods, with various consumer groups targeted.

Arzumanyan emphasizes that entering the Chinese market requires not only arranging supplies, but also preliminary work to build interest in the country and its products. This is why he views trade projects within the broader context of developing economic and cultural ties between Armenia and China.