The Republic of Armenia is situated in a strategically attractive region of the South Caucasus. It occupies an area of 30,000 sq. Km. and shares borders with Iran, Turkey, Georgia and Azerbaijan.

　　Armenia is directly connected by air with major cities in Europe, CIS and Middle East. The nearest seaport to Armenia is Georgian city of Potty, which connected to the capital of Armenia Yerevan by rail. There is also road connection with Iranian port of Bandar Abbas.

　　Armenia is rich in natural resources, such as gold, copper, molybdenum, zinc, aluminum, coal, etc. and processing and concentrating enterprises based on them. There are also large scales of construction-related resources including: marble, granite, tuff, perlit, cement and gypsum. Armenia has about 700 natural mineral water springs, which have medicinal qualities and effectiveness.

　　Joining the WTO

　　On its way towards joining the WTO, Armenia has implemented a comprehensive stabilization and structural reform programs, including: price liberalization, privatization of small-scale and medium/large enterprises and significant progress. Armenia has strengthened its banking sector in putting in place modern regulatory and supervisory frameworks. There are 11 foreign resident banks, like HSBC (UK), Mellat (Iran),“Armimpex”(Russia) and others, operating today in Armenia.

　　Foreign investment at a glance

　　For the past several years, the Armenian economy has been growing, its currency is relatively stable, and inflation is within acceptable limits. However, the budget deficit remains high and Armenia relies heavily on external financial assistance to balance the budget. The immediate challenges for the government are to keep up the pace for privatization, promote and attract foreign investment (FI), and complete the regulatory and legal framework for capital markets.

　　After a sharp downturn that took place at the end of 1999 and in the first quarter of 2000, the economy started recovering due to several important factors. Foreign Direct Investment (FDI) was more than expected in the first quarter of 2000, interest rates stabilized at a much lover level than in previous years, the macro-economy continued to enjoy a great deal of stability, and short-term interest rates on Treasury bills continued to hold at a level slightly above 20 per cent. This helps to create a market for investors.

　　The Armenian investment policy is geared towards attracting foreign investors and is among the most open of the countries in the CIS region. The government makes significant efforts to promote and attract foreign investments. Foreign companies are encouraged to invest in any sector and enjoy the same treatment as domestic companies. Any currency may be freely converted and bank accounts may be held in foreign currencies.

　　Ongoing, large-scale privatization also offers many attractive opportunities to investors. The FDI during 1998-2000, was boosted y the switch from voucher privatization to cash sales in 1998 with privatization receipts dominating. Comparatively modest investments have been registered in the high-tech sector. However, this sector has a high investment potential and should experience a great inflow of investments in the near future.

　　Major Economic Sectors and Sino-Armenian economic cooperation

　　The wide-range manufacturing sector includes production of chemicals, metal cutting machine tools, forging-pressing machines, electric motors, technical rubber products, including tires, knitwear, hosiery, shoes, silk fabric, trucks, industrial tools, mainframe computers, microelectronics' elements and software. Leading industrial sectors are diamond processing and jewelry.

　　The textile industry is well developed and mainly exports its production to the US and Western Europe. Several large enterprises have been partially privatized to foreign customers, and others are on sales list. The leading carpet makers are highly competitive on international markets.

　　There is also a well-developed chemical industry in Armenia. The main products are plastics, chemical fibers, caustic soda, paints, lacquers and other coatings, rubber and latex. This sector of industry has become an important area of Sino-Armenian economic cooperation.

　　In September 2001 Armenia and China have signed an agreement on establishment of Joint Venture on synthetic rubber production, in Shanxi province, with total expected output of 30 thousand tons per year. This project put Armenia in leading positions among the Eastern European countries by the volume of investments.

　　In the same period another Sino-Armenian Joint Venture, the bio-technological center, was established in Urumchi.

　　Owing to foreign investments, successful development has been observed in production of pharmaceuticals and vitamins. British Bristol-Mayer's Squibb Company has done one of the biggest investments in this field.

　　IT and software development represents a major opportunity for investment, and is one of the fastest growing sectors of economy Presently, more than 40 Armenian and 12 foreign software companies have employed more than 300 programmers. The biggest software company in Armenia is HPL Armenia, a subsidiary of“Silicon Valley-based Heuristics Physics Labs, Inc.”Due to that work places are limited; a large number of programmers are unemployed.

　　Armenia's IT industry has very strong prospects, and has a leading role in the country's long-term economic development not only as a profitable sector, but also for its potential impact on other sectors.

　　Agriculture is the largest employer in the country and accounts for over one quarter of GDP. The country produces tobacco, essential oil, vegetables and superior quality fruits including grapes, figs, pomegranates, apricots, peaches, etc. Armenia is justly proud of its brandy, wines and beer. About 15 per cent of production is consuming in Armenia. The rest is exporting to more than 20 countries, such as Russia, US, Japan and others.

　　Agriculture is another field in which Armenia and China are successfully cooperating. Within the programs implemented during the last few years, around 500 Armenian apricot trees and more than 10 sorts of grapes have been cultivated in Hebei and Shanxi provinces. Some Chinese specialists of agriculture have studied in Armenian Academy of Agriculture.

　　Recently Armenia and China are implementing several projects in such fields as, high technologies and computer engineering, preserving at the same time huge potential for further development of bilateral cooperation.

　　Impression of China

　　The Ministry of Foreign Affairs of China, and all its structures created perfect environment for foreign diplomats,in which they live and work, enjoying atmosphere of mutual understanding. Armenian diplomats are not exception and actively involved in daily diplomatic routine.

　　The implementation of opening up policy has opened doors to the different parts of the great country and made it possible to watch with own eyes the trend of reforms taking place in China.shavingsstayed here less than one year, I have already visited several provinces and saw by myself the progress and success achieved by China in different fields of economy, science, culture and social development.

　　The changes coming to the Chinese economy, after entering the WTO producing the new opportunities for mutually beneficial cooperation, and impose a high responsibility for our diplomatic stuff to be continuous in their efforts directed on further development and strengthening of friendly ties between Armenia and China.