Want to do trade with Iraq?
I don't think it's going to be very good, but I've seen a program with 2 college students doing business in Iraq, and it's awesome!
The Iraqi market is in high demand. On May 22, the U.N. Security Council adopted resolution 1483, lifting 13 years of economic sanctions against Iraq and resuming general trade activities except for weapons and related materials. As a result, Iraq has been integrated into the world economy as if overnight. The Iraqi market has shown great business opportunities, with strong demand for construction materials, food, drinking water filter material, clothing and home appliances.
Companies from the U.S. and Europe monopolized the reconstruction projects and large-scale material import opportunities in Iraq, and businessmen from many neighboring Arab countries, such as Jordan, Kuwait and Saudi Arabia, seized the advantages of geography, ethnicity and language to become one of the earliest foreigners to enter the Iraqi market. They were mainly engaged in re-export trade, importing goods from other countries and then transferring them to Iraq. Chinese light textile products, small household appliances and other products dominated the Iraqi market before the war, but most of these goods were imported by locals directly from China or transshipped in through neighboring Arab countries. It is worth mentioning that Israel also managed to drive into the Iraqi market, getting orders for water purification devices from the coalition forces. And some countries in South Asia, such as India and Pakistan are eager to try the Iraqi labor market after the lifting of the ban.
No insurance company in Iraq
Faced with huge business opportunities in the post-war Iraqi market, Chinese companies are looking forward to returning to Iraq as soon as possible, but on the other hand, they are worried that the situation is so volatile that their personnel and goods are not safe. The Ministry of Commerce has also recently issued a notice pointing out that: as the domestic situation in Iraq has not yet been fully stabilized, security is not guaranteed, and our diplomatic offices in Iraq have not yet resumed operations, so all kinds of economic and trade personnel still need to be cautious about entering Iraq, and to strengthen the awareness of risk prevention and pay attention to the safety of foreign exchange collection when carrying out trade with Iraq.
In my opinion, it is still immature for Chinese enterprises to return to Iraq, and they should carefully consider the risk cost and trade cost. For example, there is no insurance company in Iraq now, and no one bears the risk during the transportation and sale of goods. In terms of payment, individual businessmen can "pay with one hand and deliver with the other" and trade with cash on delivery, while enterprises face the risk of collecting foreign exchange. In addition, the Iraqi people are still using the currency of Saddam's government, the dinar, and the exchange rate with the U.S. dollar is very unstable. So enterprises need to be careful when carrying out trade with Iraq, if only focusing on Iraq's attractive market, without a clear understanding of the risks involved in the rush to enter the words, it will "lose more than gain".
Sporadic gunfire can still be heard every night
The actual situation is just like that, a gentleman named Chen Xianzhong, according to the current introduction in Iraq, where he has encountered problems in food, housing and transportation. Although Iraq's electricity supply has begun to be restored, there are still six hours of blackouts a day. The highest temperature outside is now close to 50 degrees Celsius, and without their own generators, times must be tough.
Mr. Chen also told reporters that the current situation in Iraq is still unstable, with robberies occurring from time to time, making it impossible to guarantee even the most basic personal safety. "As soon as the sun goes down, I dare not go out again. If you drive a car, you must have a local Arab sitting next to you, otherwise the car may be robbed." Now that the new Iraqi government has not yet been formed, the judicial system has not yet been completed, there is no police to maintain law and order, and although the U.S. military has begun to collect civilian guns, sporadic gunfire can still be heard at night. If one's personal safety is threatened or if one is robbed, one can't find a place to talk about it. "Americans are attacked every day, so how can they care about us."
Personal safety is not guaranteed, and the safety of goods is even less so. Mr. Chen told reporters that he did not dare to trust the Iraqi transport companies, goods are likely to be lost in transit, the original credibility of the Iraqi businessmen "is now completely not so much." Due to the unstable situation in Iraq, no transportation company in Jordan dares to go there. Therefore, from April 27 to return to Iraq so far more than a month, Mr. Chen can only look at the situation, paving the way, has not been shipped.
Going to Iraq, it is best to wait another year
Reminding domestic counterparts: business opportunities in Iraq is there, but we have to wait and see. As for when Chinese companies will be able to directly enter Iraq, Yin Gang believes that it will take about a year for the situation in Iraq to stabilize and for new trade policies to be established. This will take about a year, and domestic businessmen should be patient. China's home appliances and small hardware have their own competitive advantages, and companies will not miss business opportunities because of a moment's wait.
As things stand now, it is still difficult for Chinese companies to participate in reconstruction projects in Iraq, especially in direct bidding. But Chinese companies can still get subcontracted reconstruction project contracts from some European and American countries or neighboring Arab countries. If Chinese companies want to carry out trade activities in Iraq, it is better to carry out commodity resale through traditional commodity distribution centers such as Jordan, the United Arab Emirates and Egypt, and give full play to the role of local merchants who have the ability to avoid risks.
You are also reminded that to seize business opportunities, it is important to know exactly what Iraq needs most in the post-war period, rather than what companies themselves have. If companies ignore Iraq's market needs and simply send a stream of goods they have on hand to the Iraqi market, I'm afraid it won't end well.
Business opportunities in Iraq:
In March 2006, an Iraqi reconstruction purchasing group composed of more than 50 businessmen arrived in Shanghai with 1 billion U.S. dollars in purchases. From the 1991 Gulf War to the 2003 U.S.-Iraq war, Iraq has been on the brink of reconstruction and destruction, which has made many Chinese businessmen think of going to Iraq to explore business opportunities.
Heaters sell well in the Middle East
"There is nothing but a market for them," is what businessmen say about Iraq. The serious lack of materials in post-war Iraq has brought unlimited business opportunities.20 The Iraq Post-War Reconstruction Exhibition in '06 predicted that this time the funds used for post-war reconstruction of Iraq's electric power industry is up to 12 billion dollars, the oil industry is 8 billion dollars, water and sanitation industry is 7 billion dollars, and agriculture is 3 billion dollars.
From September 2004, Ruian City, Wenzhou, Dongli Machinery Co., Ltd. foreign trade salesman Huang Yingjie three years went to Jordan four times, can be considered a "Middle East", these days she is in Amman, Jordan, to participate in the Iraq Reconstruction International Commodities Exhibition.
"A lot of business opportunities have not thought of before," said Huang Yingjie, an Iraqi customer to order a large number of home appliances, including heaters alone, 10 containers per year (equivalent to 1.5 million U.S. dollars in total, the number of about 30,000 to 40,000 units). "We have always thought that the Middle East is very hot, where do I think that there is also a market for heaters, do not come here is not going to know." It turns out that Jordan's climate is relatively similar to China's Xinjiang, where temperatures can be as low as zero degrees Celsius and it can snow.
"Iraqi and Jordanian businessmen are purchasing low- and medium-grade daily necessities, and there is a lot of potential in the basic market." A Chinese businessman, who asked not to be named, said Iraqis have a very good impression of Chinese goods because they match their consumption characteristics and purchasing power.
Small hardware, daily necessities have opportunities
Mustafa, an Iraqi businessman, is attending the third Iraq Reconstruction International Trade Fair in Jordan, this time picking up Chinese goods on his doorstep. A month ago, he also visited Hangzhou to buy ready-made clothes, including summer and fall clothes. He said he would also come to Zhejiang sometime to see its lubricants, tire rubber and body paint.
Mustafa's SAFFARINTERNATIONAL, an Iraqi foreign trade company, was founded by his father, who is in charge of the Chinese company and works in Guangzhou, as well as making purchases in Hangzhou, Ningbo and Yiwu, mainly for chemical and pharmaceutical products, automobile parts and ready-made clothes.
"Iraqi reconstruction requires a large number of daily necessities and building materials, transportation products, orders are mostly more than one million U.S. dollars, Zhejiang commodities with low cost, skilled and well-made craftsmanship, short delivery time, and therefore a good reputation in Iraq." Mustafa said.
Domestic and foreign people to analyze the Iraqi reconstruction market, that a large part of the post-war reconstruction of business opportunities from the construction of reconstruction projects, as well as the resulting demand for iron and steel, building materials and other products, this part of the order may be divided by the United States and Britain and other countries, the opportunities for Chinese companies mainly from the light industry, such as small hardware, daily necessities and so on.
Chinese commodity city quietly rises in Jordan
Many businessmen are interested in the reconstruction of trade in Iraq, but worry about security issues. However, some Zhejiang businessmen who have been to the Middle East say the vast majority of trade on Iraq is actually conducted in neighboring Jordan.
Shanghai International Advertising Exhibition Co., Ltd. has hosted three sessions of the Iraq Reconstruction China Commodity Exhibition in Jordan, and Pan Jianjun, general manager of the company, said the port of Aqa-ba in the northern part of Jordan is the only port to enter the northern part of Iraq, and the highway from the Jordanian capital to the Iraqi capital, Baghdad, has been called the "land lifeline" by the Iraqis. The highway from the Jordanian capital to the Iraqi capital Baghdad is known by Iraqis as the "overland lifeline", and 70% of civil reconstruction products enter Iraq via this route. Products entering the Iraqi market via Jordan are duty-free in Jordan.
Jordan is politically and socially stable, with easy access to transportation, good infrastructure and a vacation destination for the entire Middle East. In terms of political relations, Jordan is the only country that has visa-free access for Iraqis. So after the war, there are currently about 80,000 Iraqi businessmen in Jordan, most of them relatively wealthy. Nearly 10,000 Jordanian businesses have trade relations with Iraq.
The rapidly growing trade has also benefited from Jordan's very developed banking system, with no controls on foreign exchange and a stable exchange rate. After the Iraqi war, Iraq's banking system was paralyzed and Iraqi businessmen had their bank letters of credit opened in Amman.
Iraqi reconstruction commodities are entering Baghdad, Iraq through Aqaba, Jordan. Shanghai Nissaki Import and Export Co., Ltd. mainly exports cement to Iraq, said Ms. Fang, secretary of the general manager, the shipment channel generally go through the curve, the local businessmen and Chinese companies to negotiate a single, from the country to Jordan, and then shipped from Jordan to Iraq.
Because of the rise of trade with Iraq, Aqaba has seen the emergence of the first Chinese commodity city, which was formed by Chinese private merchants on their own initiative.
International exhibitions are still the main way
The third International Trade Fair for the Reconstruction of Iraq, which was held on May 8, featured 55 Zhejiang enterprises from Hangzhou, Ningbo, Rui'an, Taizhou, Yiwu, Shaoxing and other cities, including Wenzhou Sanxin Electrical Appliances, Tianzheng Group, Qidi Electrical Appliances and Hangzhou Rongkang Trade, with products involving machinery and equipment, valves, hardware and tools, electrical appliances, textiles and so on.
The commodities exhibition is mainly for the reconstruction market, generally in May every year is the "Iraq Reconstruction International Trade Fair", which is global, more than 1,500 exhibitors from all over the world to participate, in August is the Jordan China Commodities Exhibition and the Iraqi post-war reconstruction exhibition, mainly for Chinese businessmen.
In the fair, building materials and power generation products are the most popular, with building materials accounting for 40 percent of the total. Furniture, food, machinery, medical equipment and daily consumer goods are also popular. This year, more than 10 automobile companies have signed up to participate.
Shanghai Lingguang Furniture Co., Ltd. general manager Xin Weiguang suggested, and the Iraqis to do business, it is best to take the way of trade rather than invest in building factories. Because Iraq's road transportation and telecommunication networks are relatively backward, raw materials, machinery and equipment are dependent on imports, and there is a shortage of skilled technicians.
If you set up an office in Jordan, you need to consider the cost of rent, utilities, labor, etc. Whether or not you can adapt to the local culture and customs is also a prominent issue, and looking for a local agent can play a multiplier effect.
Local business tips
Food, accommodation and transportation: hotel conditions are not too good, Wenzhou people open three-star hotel may be better than the local four-star. Pork is available in Chinese restaurants. The local market can buy rice, soy sauce, vinegar and other condiments need to bring their own. Overall prices are a bit more expensive than in China. A bottle of mineral water that costs 1 yuan in China costs 3-4 yuan locally. It is best to keep in touch with the embassy at all times.
Trade: Pay attention to the preparation of goods samples of the actual sample, because the Middle East people do not like to see paper samples. Compared to Dubai, a free trade market, Jordan is relatively backward, so the cost of tariffs is one of the costs for companies to consider. It is best to deal in cash, and be sure to find a bank with good credit, preferably an American or European bank based in the Middle East.
Good luck.
But then again, I personally think there are still dangers there.
Your idea is great. Very complimentary. It's all up to the individual to decide what to do though.
I hope you are successful, and when 3 or 5 years pass, I hope to be able to trade Iraq like you did, and get advice