HK executives keen to bridge culture gap
As business links between Iran and Hong Kong steadily grow, companies also want to bridge the gap in cultural understanding.
Some executives exploring opportunities, ranging from oil and natural gas investment to bilateral trade and tourism, say they have been struck by how lengthy negotiations can be when making deals. The other side of the coin is that visiting Chinese executives are said to appreciate the courtesy and time Iranians extend to guests.
'You can spend an hour with an American and the deal is done, but you could have a nice time talking to an Iranian for 10 days without him buying,' said one building materials trader, who did not want to be named because he is wary of repercussions in his dealings with American companies due to sanctions imposed on Iran by the United States.
However, Iran's Consul General to Hong Kong, Abdollah Nekounam, dismissed the idea that business deals were slow to be approved. 'We cannot say there is any slowness in making decisions - rather it's the lack of understanding between the two sides,' he said.
'We believe more effort needs to be made to bridge that gap. Maybe we are going through a transition period. In full co-operation with our office, we have been trying to make our best efforts to bridge that gap and give information to both sides. This requires effort from both sides.'
The opening up of Iran to investors has attracted the attention of Chinese business people who remember how the mainland steadily drew overseas interest following Deng Xiaoping's push towards reform 30 years ago.
'Germany and France have been doing business there a long time, so many others know how to get business done quickly,' the trader said. 'I feel the country has big potential. The problem is how we can connect with each other by keeping the traditional courtesy in negotiations but getting deals to move a bit faster.'
The Iranian consulate has made trade ties a priority, with officials and investors of the opinion that progress is steadily being made in co-operation with trade bodies such as the Hong Kong Trade Development Council (HKTDC) and the Chinese General Chamber of Commerce.
One major sector that Hong Kong companies have been keen to tap is Iran's demand for consumer electronic products, particularly as more than two-thirds of the nation's population are under the age of 30.
Iranian importers have shown a keen interest in household goods and consumer electronics made in mainland factories owned by Hong Kong companies.
Landy Lau of AL Goodwell Industries - one of the 20 or so Hong Kong companies which the Iranian consulate helped to establish business connections last year - sees more opportunities for original equipment manufacturers as Iranian companies reach out to the world.
'Many years ago it was western Europe and northern Europe for key electronics markets. Now it's spread to South America and eastern Europe, every industrial country and America. [Demand in] Iran is now as strong as in other countries for electronic products including semi-finished products that are assembled by Iranian companies,' Ms Lau said.
As other Hong Kong business owners have found, negotiations can move slowly at first. 'We have a very good customer who we had kept talking to without real projects or inquiries - but we finally did a shipment,' she said. 'It takes a bit of time to complete one project, but once [wholesale buyers] had the customers behind them they did everything that was required.'
At the other end of the spectrum is the oil industry, with such big players as Sinochem and CNPCC having strong links with Iran. This has led to Hong Kong-based private equity specialists gathering investors interested in the flow of dividends from the world's fourth-largest oil producer, with crude oil production that reached 1.7 billion barrels in 2007, according to the consulate.
Henry Li, of Northwest Energy Ventures, and Ivan Chau Yiu-wing, of Gold Ocean Asia, are two of the specialists making high-level contacts in Iran to explore opportunities in oil, natural gas and other resources. They said familiarisation trips have enabled them to evaluate Iran's potential more closely.
'The Iranian government has been reaching out to investors in China and other parts of Asia. That is why we are involved - to meet people from the oil and gas sectors. We gather investors from Asia and Europe in private equity projects and we can source experts,' Mr Li said.
Resources such as iron-ore are attracting Gold Ocean Asia, a new company that is encouraged by what Mr Chau calls Iran's 'open-door policy' towards its economy.
Mr Chau, who visited Iran last year as part of delegations from the Chinese General Chamber of Commerce and in December with the HKTDC, said: 'Special economic zones have been set up with privatisation to encourage foreign investment - this will be to China and Iran's mutual benefit. A huge accumulated domestic demand will be released once a feasible trade mode is introduced.'
While Mr Chau said he had yet to see any signs of Iran deals for Gold Ocean, Mr Li said Northwest Energy Ventures had made progress with projects that were under discussion. Both said they saw ample potential in Iran but more infrastructure investment was required.
Among the main concerns have been geopolitical tension in the Middle East and Iran's sour relations with the US. Here, investors and others seeking more dialogue with Iran, are hopeful that the election of Barack Obama as the new American president will pave the way for engagement, not tension.
'Under the sanctions of western countries, there was difficulty in financing the economy because of the obstacles to international trade,' Mr Chau said. 'However, Iran maintains rich natural resources and intellectual human resources with a united nationalism. I saw the people in Iran as peaceful, courteous and friendly.'
What also gave Mr Chau confidence was Iran's huge reserves of euros, which he believed made the country a haven from the global financial meltdown.