F or more than 32 years, friendly, mutually beneficial and cooperative relations have been established between the Republic of Armenia and the People’s Republic of China (PRC), leading to dynamic annual development in bilateral cooperation and strengthening trade and economic ties. The role of China in the world economy is growing steadily, therefore, the expansion of friendly relations with China is gaining great importance in the economic policy agenda of China.  

In the context of the series of analytical articles entitled “5 Main Economic Partners of Armenia”, we consider it necessary to refer to the study and analysis of the latest changes in the economic cooperation between the Republic of Armenia and the People’s Republic of China, particularly in the field of trade turnover. According to the official data of 2023, the People’s Republic of China became Armenia's third largest trading partner. The volume of trade turnover was $2.13 billion, increasing by 21.3% compared to the previous year. 

Overall, relations between the Republic of Armenia and the People’s Republic of China have been strengthened through numerous visits by official representatives, joint programs, signed memoranda and protocols, as well as mutually beneficial cooperation. Cooperative relations have been formed in a number of fields such as commercial, aviation, healthcare, education, culture, tourism, and more.

Trade. What do we export and what is imported from China? 

T he establishment of bilateral trade and economic ties holds a unique place in terms of the development of Armenian-Chinese relations. Therefore, it is necessary to address the key indicators reflecting these relations: trade turnover, investments, tourism, cash flows, etc. 

According to 2023 data, the volume of exports from Armenia to China amounted to $425.4 million, reflecting a 15.1% increase compared to the previous year. At the same time, China accounted for more than 5% of Armenia’s exports, making it the country's 3rd largest trading partner.

It is noteworthy that the growth rate of mutual trade turnover in 2015 was the lowest in the last 10 years, partly due to the ongoing crisis in the Russian Federation, given the close cooperation between the countries. The fall in 2020 is due mainly to the negative effects of the COVID-19 pandemic, the disruption of value chains, as well as structural changes in international markets. Since 2021, the growth rate of mutual trade turnover between partner countries has accelerated, reaching a peak of 39.4% in 2022, the maximum level in the last 10 years. What has been stated proves the expansion and deepening of trade and economic ties between partner countries in recent years. In particular, based on the data of 2022, the People’s Republic of China became the second largest trading partner of the Republic of Armenia, holding 12.4% of the total volume of the trade turnover of the Republic of Armenia. 

The highest volumes of both exports and imports have been recorded in the previous years since 2014. Armenia’s trade balance with China remains negative: in 2023, it amounted to $1.3 billion, meaning that imports exceeded exports by $1.3 billion.  

According to more recent data, in the first 9 months of the current year, the mutual trade turnover between Armenia and China amounted to $2.08 billion, increasing by 34.7% compared to the previous year. The share of trade turnover within Armenia’s total trade volume has reached 8.7%, representing a certain decline compared to the same period of last year.   

When looking at the structure of imports from China to Armenia by product group, we notice that the latter is not focused on a limited number of products but includes a wide variety. According to the data of the first half of 2024 (the latest statistical data published by the SRC), passenger cars ($54.8 million) were imported from China to Armenia the most, followed by telephone equipment ($40.4 million), computing machines ($34.9 million), diodes, transistors and similar semiconductor devices ($26.1 million), motor vehicles ($16.7 million). In general, cars and equipment accounted for the majority of imports, still the structure of imports is diverse and also includes clothing, bags and suitcases, shoes, computers and computer equipment, construction materials, and more. 

In recent years, the increase in the volume of trade turnover between Armenia and China has been caused mainly by the rise in imports, but we also emphasize the study of the product groups exported from Armenia to China. Armenia primarily sells mineral raw materials to China. According to the data for the first half of 2024, gold accounted for 62.6% of the export structure, with a customs value of $445.9 million. The second largest commodity group is copper ($194.8 million), followed by silver ($48.4 million), then molybdenum ores ($10.6 million).  A relatively large share of the export structure is also occupied by the product group of medical devices and equipment ($6.7 million). Wines are also exported from Armenia to China in a relatively large volume ($5.6 million). During the last 10 years, in total, 5 main product groups were exported from Armenia to China: only the share of copper in the total volumes exported from Armenia was about 73%. 
Currently, China is considered a major superpower in the world economy, it has its place and position in the volumes of international trade turnover, as well as in many geopolitical and geoeconomic processes. From this point of view, the deepening and expansion of current and future relations with China is of vital importance for Armenia.

 

The PRC ranks among Armenia’s top ten tourist flows

 

W ithin the framework of studying cooperative relations, it is important to analyze tourist flows between the People’s Republic of China and Armenia, as well as in both directions.

Over the past 10 years, except for the coronavirus period, the flow of tourists from China to Armenia has increased significantly. According to the last year’s data, the number of tourists has exceeded the levels of the pre-COVID period and continues to show an annual growth trend, even though it comprises a small, 0.1% share in the total number of tourists visiting Armenia. 

Data from the Tourism Committee revealed that the number of tourists from China to Armenia increased to 19,600 in 2023, compared to the previous year. The signing of the agreement on “The Mutual Abolition of Visa Requirements for Persons Holding Ordinary Passports between the Government of the Republic of Armenia and the Government of the People’s Republic of China”, along with the lifting of restrictions related to the COVID-19 and development in the aviation sector, have significantly contributed to the growth of passenger flows.   

Notably, 11,000 Armenian tourists visited China between January to October 2024, which increased by 1.1% compared to the same period last year, further proving the dynamic developing relations between the partner countries. In the same period, the number of Chinese tourists visiting Armenia exceeded 29,100, accounting for 1.5% of the total tourist volume. 

Remittances from China to Armenia exhibit dynamic growth

I n the context of Armenia’s economic relations with China, it is important to consider the overall picture of remittances, the volume of which is not as large, as in those from Russia or the  United States. Additionally, China is among the countries with which Armenia has a negative balance of remittances, meaning that remittances of individuals from Armenia to China are greater than those from China to Armenia. 

Thus, as the diagram shows, the largest outflow volume (from Armenia to China) over the last 10 years was recorded in 2022, marking 13.6% compared to the previous year.  It should be noted that since the pre-COVID period, the inflow of remittances from China to Armenia had a dynamic growth trend, reaching the highest level in the previous year: the inflow increased by 38.5% compared to 2022.

The net inflow of remittances from China to Armenia, which shows the difference between inflow and outflow, has always been negative over the past 10 years. At the same time, the gap in 2023 has somewhat softened, decreasing by 4.9% compared to the previous year. This is largely due to the fact that the volume of inflow of remittances from China to Armenia has started to grow at a higher rate compared to the outflow. 

According to more recent data, during the 10 months of the current year, the inflow of remittances from China to Armenia amounted to $4.5 million, already 83.3% of the annual amount recorded in the previous year. Based on our forecasts, the annual data of 2024 will exceed the actual index for 2023. 

As a result of the annual improvement and development of the economic relations between the Republic of Armenia and the People’s Republic of China, the latter is the third trade partner of Armenia. From the analysis of the indicators characterizing the economic relations of partner countries, it becomes clear that despite more than 30 years of economic cooperation between the Republic of Armenia and the People’s Republic of China, the existing potential is not fully utilized. The difficulty in further development of trade and economic ties and effective use of potential is primarily due to the lack of transport links, and the logistical challenges in Armenia. In this context, also from the point of view of the diversification of Armenia’s economic policy, defining and implementing the sequence of steps aimed at deepening long-term relations with China is of great importance, because currently the PRC is considered a leading superpower in the world economy and can directly contribute to the smooth and long-term development of the Armenian economy.