June 25th, 2009
07:27 AM GMT
In 2005, I took a road trip through Iran. The sights – such as Yazd, the center of the endangered Zoroastrian religion, and the impressive mosques and madrassas of Esfahan – were some of the most fascinating I have ever seen.
Also fascinating was what we didn’t see: No McDonald's, no Starbucks or any other globe-trotting American brand.
Yet in the vacuum of Western products and services brought by financial sanctions against Iran, Asian companies have been eager to fill the void.
Ben Simpendorfer, author of "The New Silk Road: How a Rising Arab World is Turning Away from The West and Rediscovering China,” said trade between Asia and Iran has been surging since 2003. China accounts for half the increase. Railways, construction, and consumer goods firms, he says, have benefited in particular.
Trade sanctions – in place since the 1979 revolution against the Shah – have diverted Iranian trade away from the West and more to the East. The rising trade power of China and other Asian nations with Iran has weakened the effectiveness of sanctions, Simpendorfer said.
"Over the past couple of years, demand from the traditional markets – Europe and the United States – have collapsed," Simpendorfer explained. "So a lot of exporters in this region are now turning to the developing markets to try to find substitute buyers."
However, some exporters here are starting to face the same pressures as their Western counterparts. "Asian companies are increasingly finding it difficult to finance their trade with Iran," he said.
Chinese exporters, Simpendorfer said, "are suggesting that they should rely on telegraphic transfers, for example, or euro-denominated trade finance, or even look to try to divert their trade through Dubai as an alternative to directly exporting to Iran."
The current unrest makes the future difficult to read, but Simpendorfer believes no matter the outcome, Iran’s economic ties with Asia are bound to rise.
About Business 360
CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.