Business Inside the market that sells everything from knickknacks to knock-offs

seviece Yiwu agent 28 Views No comments

With a population of 1.2 million, Yiwu is a small city by Chinese standards. But every year, more than 400,000 foreigners, hailing from everywhere from Russia to Nigeria, fly into this city in eastern China to do business.

“There are two places in the world where you can find at least one person from each and every country in the world. One is the United Nations, and the other one is Yiwu,” says Girdhar Jhanwar, an Indian businessman who moved to the eastern Chinese city about two decades ago.

The visitors’ destination is the Yiwu Commodity Market. Since it opened in 1982 as China’s first market for small consumer goods, it has become a mecca for traders from around the globe on the hunt for inexpensive products to sell back home.

It’s now the world’s largest wholesale market for small consumer goods.

A shop selling Chinese lanterns in the Yiwu market.

A shop selling Chinese lanterns in the Yiwu market. Photo: AFP/Johannes Eisele

The story of the market’s astounding growth is also the story of China’s transformation since it began opening up to the world four decades ago.

But as China’s rise has been felt around the world and met with increasing American hostility, the market that specializes in peddling knickknacks – and knock-offs – has found itself bracing for the impact of the US-China trade war.

But that’s a worry for another day. Barring natural disasters and Chinese New Year, Yiwu is open for business.

At the sprawling, 2.5-square-mile complex housing Yiwu’s commodity market, there are seemingly endless rows of stores offering merchandise ranging from small mechanical parts to costume jewelry to dream catchers. Together, they offer 1.8 million products for buyers from 210 countries.

If you spent just three minutes at each of the 75,000 stores in the Yiwu market, it would take you five months to visit them all – assuming that you don’t stop to eat or sleep.

Amid an explosion of color and sound, foreign traders and their local agents looking for bargains thread their way through from stall to stall, while food vendors trundle their carts along, selling lunch boxes and fruit to busy storekeepers.

A woman shops in the wholesale market in Yiwu.

A woman shops in the wholesale market in Yiwu. Photo: Reuters/Carlos Barria

Humble origins

It’s hard to imagine that Yiwu was a sleepy farming town, just three decades ago.

But the city’s bustling market is a potent example of how China’s opening-up policies have changed the nation.

In 1982, after the country’s then-leader Deng Xiaoping had embarked on economic reforms to open up the country, a group of farmers in Yiwu petitioned the local government to allow them to engage in commercial activities.

For local officials it was a political gamble, because it still wasn’t exactly clear if this kind of business was encouraged.

Until Deng’s capitalist reforms came into effect, the Communist Party-ruled state decided on everything. The idea of private property and wealth was a taboo, and the class warfare launched by the party – to devastating ends – was still fresh in people’s minds.

But the gamble paid off. Today, Yiwu has become a global trading hub after the local government continued investing in infrastructure and implementing business-friendly policies.

“Yiwu developed largely because of the efforts by the local government. There was no detailed planning from the central government,” says Xun Wu, a professor studying public policy at the Hong Kong University of Science and Technology.

Yiwu market was started by farmers, not the central government.

Yiwu market was started by farmers, not the central government. Photo: AFP/Johannes Eisele

Trade war

But in a city built on exporting goods, the current US-China trade war is hardly welcome news.

The US is the Yiwu market’s second-largest trading partner, after India. The city exported about $800 million worth of goods to the US in the first half of the year.

Yet the global trading hub hasn’t been hard hit by the trade war – at least not yet, according to the businessmen in Yiwu.

“Our export business has improved from last year,” says Chen Zewei, a Christmas decorations supplier, adding that less than 10% of his clients are from the US.

Business Consulting

Leave a Reply

Go