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Yiwu: China’s Little Known Capital of Commerce

What is the most international city in China? Shanghai? Beijing? Surely, it must be Hong Kong? No, the most international city in China is one most people outside China have never heard of: Yiwu, in Zhejiang Province

Yiwu is about three hours southwest of Shanghai, with no sites of any importance, and a somewhat rundown city center. Few international tourists will ever set foot there. And yet, at this very moment, there are more foreigners thronging there than anywhere else in China. 

Yiwu, you see, is where the Third World comes to shop. In the last ten years, it’s become the nexus of a large, complicated global trade route, the main supply depot for tens of thousands of shops all across the world. Yiwu’s streets and hotels are filled everyday with thousands of traders from Africa, Russia and the Middle East. They come there to make money, which they do by buying goods by the container load in Yiwu to ship back and sell in their home countries.  

This is petty capitalism on a grand scale: thousands of foreign small businessmen buying from thousands of Yiwu merchants, who rent stalls in the huge market centers spread across the center of Yiwu. At a guess, there must be over 15,000 stalls in these market centers, each staffed by a local, each catering mainly to the foreigners who spend most of their days bargain hunting. 

Mainly, the stuff for sale caters to the taste of this foreign market. Little if any of it would find buyers in US, Western Europe or, increasingly, China itself. Indeed, from what I could tell, more of the world’s hideous clothing ends up for sale in Yiwu than anywhere else. There is enough polyester and other petrochemical-derived materials on display to power the world’s ocean shipping fleet for generations.

Besides clothing, there are a large number of stalls selling other basics of poorer economies, like printed plastic bags, cheap carpets, plastic jewelry, lighting and other house wares. If you wanted to know how people dress and furnish their homes in Isfahan, Aleppo, Izmir, Rostock or Accra, you could get a decent impression by walking through the market centers of Yiwu. 

How and why Yiwu became the center of this multi-billion dollar trade remains a mystery to me. Yiwu has no natural advantages of any kind: it’s far from main transports hubs, hemmed in by mountains, and never developed much of an industrial base. The main export ports of Ningbo and Shanghai are both over three hours away by truck.

Clearly, there was no central government diktat saying Yiwu would be China’s “window on the Third World”. It seems to have happened spontaneously. To accommodate all the foreign traders, basic English is much more widely spoken than anywhere else in China. Even the lady at the ticket booth in the Yiwu bus station can use English to sell a one-way bus ticket to Guangzhou to an African on his way home. 

The English is not always correct. Outside one of the many shops selling sex toys, I saw a sign reading  “Aduit uppiies”. I assume, from the customer base inside, they got the Arabic version correct on the sign. 

By the standards of other successful Chinese cities, Yiwu is more down-and-dirty. There are none of the showpiece infrastructure projects like new expressways and elaborate modern skyscrapers that proliferate in other Chinese cities. While clearly all this trade has made many in Yiwu very rich, the city looks like the China of twenty years ago. Its market stalls are not the kind of place where most Chinese care to shop these days. Chinese, especially urban-dwellers, like well-designed brand-name chain stores with higher-quality merchandise and slick packaging. 

Walking around Yiwu, you get the sense that at least 10% of the population is foreign. Nowhere else in China even comes close. The foreigners are mainly Arabs and Persians, but there are also many Africans and Russians crowding the streets, markets, restaurants and hotels. 

Yiwu has more “foreign food” restaurants than anywhere else in China. Most offer Arab and Turkish food. Indeed, much of downtown Yiwu has the feel of a Middle Eastern bazaar, with clutches of men sitting around smoking hookahs and fingering prayer beads.

You are as likely to hear “Salaam Alekum” as “ni hao” walking the streets of Yiwu. All kinds of services have sprung up in Yiwu to cater to the Middle Easterners. There are halal butchers, coffee shops selling Turkish coffee, manufacturers of the long Arabthawb worn by men. Less delightfully, a Chinese street portrait artist displays drawings of Barack Obama, Mahmoud Ahmadinejad and Osama Bin-Laden. 

I like Arab food, and have eaten a lot of it, both in the Middle East in London. Yiwu’s version was actually quite authentic and tasty. Inside the restaurant I went to, the loudspeakers were playing a recitation of the Koran. Arab and African men sat eating their lunch. There are few Arab women to be seen. 

African women, on the other hand, are thick on the ground, fulfilling their reputation as some of the most talented of all the world’s market traders. I spoke to one lady from Ghana, who comes to Yiwu three times a year, and buys enough each time to fill up a 40-foot container – kids and adult clothes, shoes, carpets, blankets. The profit margins are good. After deducting the $2,000 airfare, the $300 for a Chinese visa, food and lodging in China, plus the shipping costs back to Ghana (and the bribes needed to get the goods out of Ghanaian Customs) she still earns a tidy profit on each trip.

Her capitalist Odyssey, repeated thousands of times a week, with containers bound for the world’s most glamourless spots,  is what keeps Yiwu booming. There is nothing petty about the petty traders of Yiwu. 

It’s fair to say that Yiwu has built its wealth, to some extent, on the misfortune of others. The traders who make the long trip to Yiwu do so, mainly because their countries are criminally mismanaged. In these countries of the Middle East and Africa, there are no local manufacturers making goods at a price and quality that can match that of China, even when you factor in the high transport costs to get people and merchandise to and from Yiwu and the bribes and other levies that must be paid to make sure the items reach local store shelves. Prices in Yiwu are not particularly low, more “retail” than “wholesale”. The traders buy in relatively small quantities, meaning Yiwu merchants can charge higher prices and earn fatter margins for themselves.

This sad and persistent reality of corruption, economic mismanagement and political tyranny in countries of the Middle East and Africa guarantees that Yiwu will continue to thrive for many years. Yiwu’s market economy was built by catering to places with no real market economy of their own.




Disclosure: none