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Sensing the Heartbeat of China's Dynamic Economy in Yiwu

2024-03-28 15:08:00 Source:China Today Author:staff reporter ZACHARY LUNDQUIST
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Over the last 30 years, China’s small commodity market has been a big driving force for economic growth, and the city of Yiwu is the largest small commodity market in China. Its stong vitality today gives us a picture into how China’s economy remains so strong. 

A woman doing livestreaming e-commerce on February 21, 2024 at the Heyi E-commerce Industrial Park in Yiwu City, Zhejiang Province. Productions at all 29 e-commerce industrial parks in Yiwu have returned to normal. 

Home to the largest wholesale market in China, if not the world, the city of Yiwu, in east China’s Zhejiang Province, has helped engender the miracle of China’s rapid economic growth. It started in 1982, shortly after China’s launch of the reform and opening-up drive, with the few hundred sheds and stalls comprising Huqingmen Market. Now known as Yiwu International Trade Market, the site has since expanded into a massive market complex with five districts spanning an area of four million sq.m., covering almost all sorts of small commodities. The business vitality of Yiwu International Trade City is proven in the calculation whereby that if you were to spend eight hours a day stopping at each small shop for only three minutes, it would take you over a year.

In 2011, the State Council approved Yiwu as a pilot city for comprehensive international trade reform, according to official sources. It was in 2015, during a meeting with African leaders, that President Xi Jinping heralded Yiwu as the world’s capital of small commodities; and in 2019 that the Zhejiang Provincial Committee of the Communist Party of China and the provincial government rolled out a work plan for building Yiwu into an integrated pilot zone for international trade. Owing to the rapid development of its e-commerce, the airing of 183,000 Internet celebrity livestreaming broadcasts in the year 2020 alone produced sales of over RMB 20 billion. Every year the city’s express delivery service firms ship out more than 7.17 billion parcels, so earning Yiwu the title of model county-level express delivery city.

In addition to meeting the demands of domestic consumers, the city also welcomes 560,000 or more foreign purchasers of commodities every year. Around 15,000 foreigners from 100 different countries have made their homes in Yiwu.

So exactly what kind of business platform has created such munificent economic contributions to both China’s national market and the world as a whole? And has it stood the test of economic challenges arising from the global uncertainties?

Liu Hongtu is conducting an eye test on a client in his Love Eyes City Eyeglasses Shop in 2020.

Open, Innovative Working Environment

With the development of Yiwu as a city, local consumer demands increased and business activities became brisk, resulting in the expansion of old markets and the creation of new ones. One of those markets was the glasses market. The glasses market began to grow in Yiwu around the year 2000 with the local advantages of low production costs and the large small commodity market platform.

Liu Hongtu left Zhejiang’s Wenzhou about 20 years ago. He came to Yiwu at the age of 24 to embark on a career as an optometrist, and set up the Love Eyes City Eyeglasses Shop. At the beginning, he was attracted to the large consumer market for glasses in Yiwu being that the city had a rapidly growing population of permanent residence and large number of foreigners passing through the city for business. But beyond the growing market, the Yiwu municipal government is also very open and accepting of non-local talents and entrepreneurs and helps them to excel in the local market by providing them with equal opportunities with local entrepreneurs for obtaining financial assistance from the government and leading roles in the industry. From setting up a glasses store in 2003, Liu’s work as an optometrist has expanded into various fields. In 2016, the Yiwu Vision Correction Association was established, and Liu was made its president. The association pools Yiwu’s various eye care workers, including optometric technicians, optical lab technicians, lens technicians, and other eye care professionals.

In addition to managing a chain of prescription glasses stores, Liu carries out research on educating the public about adolescent and child eye care. This entails organizing school programs, and designing relevant courses to train professional optometrists. It was Yiwu’s vibrant business platform that made possible Liu’s simultaneous running of glasses shops that provide quality prescription glasses services, innovation of eye testing equipment and design of an optometry course, as well as cooperation with hospitals. His experience also highlights the professional business environment of this city that has become the heart of the world’s small commodity market. Liu mentioned that many Yiwu-manufactured glasses are exported to countries in Southeast Asia and the Middle East.

Yiwu’s strong market radiation force and unique customer groups, circulation network, and sales market advantages have built a rare international exchange and procurement platform for the eye care industry, and truly achieve the one-stop service strategy for supply and marketing.

Even though the pandemic posed a great challenge to the traditional production and operation of physical stores, the consumer market in the glasses and optometry industry remained strong. The minor setbacks it did experience are no more, and it has resumed its pre-pandemic sales level.

In addition to Yiwu’s dynamic business environment, where both local Chinese and foreigners may pursue and realize their business dreams and have positive impact on the local economy, this small commodity products market and platform act as a window for understanding China’s vibrant economy and how it bounced back after the pandemic.

Attendees listen attentively to Gao Shaoying as he introduces Puer tea culture at a tea tasting event held in Ningbo, Zhejiang Province on March 8, 2024. 

Adaptable Market

Any visitor walking along the corridors of the Yiwu International Trade Market is impressed at how specialized the goods in each small shop are. Anything you can think of or imagine is sold there, and in multiple varieties. There are, for example, shops that sell all types of rubber bands, shovel heads, scissors …. the list goes on and on. These industries’ ability to focus on producing a quality product in quantity, and at a reasonable price, is the secret of their success. One such area is the umbrella industry.

Shen Zhouhua runs a family materials and manufacturing business. He began by traveling to Yiwu from his hometown of Suzhou, Jiangsu Province, to visit his rapidly expanding clientele. Owing to his company’s large client base in Yiwu, Shen’s family decided to set up an office there. They have now worked in Yiwu for 18 years. “Yiwu’s diverse business environment provides any company with countless opportunities for business endeavors. If one field doesn’t work out, you can divert your business operation to other fields,” Shen told China Today. A company dealing in materials manufacturing attracts clients in the fields of fabrics, umbrellas, outdoor equipment, and more. In view of Shen’s large client base in the umbrella industry, he was elected as vice president and secretary of the Yiwu Umbrella Association.

Yiwu’s diverse market opportunities have enabled companies like Shen’s, in the umbrella and outdoor equipment manufacturing industries, to adapt to the challenges of the pandemic that hindered the export of their products.

“Our industry didn’t suffer much during the pandemic due to our being able to refocus our production on the high domestic demand for outdoor tents, which grew during the pandemic. During China’s periods of lockdown many families spent more time outdoors in natural settings, which considerably boosted the consumer demand for tents,” Shen said. It is Yiwu’s diverse market that enables the Chinese industries based here to adapt to the economic challenges of the times and bounce back.

Umbrella industry sales and exports have, in 2024, resumed their pre-COVID levels; moreover, the consumer market for outdoor equipment such as tents that so surged during the pandemic, remains strong.

Shen Zhouhua has been working in the fabric production industry in Yiwu City, Zhejiang Province for the last 18 years. 

Stable Chinese Cultural Products

One of the characteristics of Yiwu’s business environment is that of the many professional business streets that have evolved over the years. Such streets attract concentrations of stores selling products from the same business sector. There are, for example, streets lined with stores selling plastic wares, or underwear, or decorations, among others. One is Chunjiang Street, which is the Yiwu Chinese tea industry center. As more than 400 tea traders have set up stores here, you can find 100 or more types of well-known Chinese tea brands, such as Pu’er, Oolong, Longjing, and white tea. Annual sales on this street have, according to a rough estimate, exceeded RMB one billion.

Gao Shaoying is a leading expert on Yiwu’s tea industry, having run a family tea company here for 30 years. He is also president of the Yiwu Tea Trade Association. “I’ve watched Yiwu’s tea trade grow over the last 30 years, and have great confidence in its consumer market,” Gao told China Today. The natural concentration of stores in various business sectors magnetizes traders in any particular field, as well as passersby shopping for small quantities of tea products.

This street has also become the destination for countless foreign businesspeople that travel to Yiwu from around the world to relax and experience traditional Chinese tea culture.

The Yiwu Tea Trade Association has, since its establishment, integrated national tea resources, established an information base, and standardized the industry’s steady development. It moreover promotes famous traditional Chinese teas, and the tea culture tourism industry. It is also in the process of developing the Chunjiang Road tea professional business street into Zhejiang’s largest and most comprehensive tea culture market.

According to a China News Service report of January 24, Yiwu Customs, a subsidiary of Hangzhou Customs, have published data showing that for the year 2023, the total import and export value of Yiwu reached RMB 566.05 billion, an increase of 18.2 percent year-on-year. Of this amount, exports accounted for RMB 500.57 billion, a year-on-year increase of 16.0 percent, and imports reached RMB 65.48 billion, a year-on-year increase of 38.7 percent.

While on an official inspection tour of Zhejiang Province in September 2023, Chinese President Xi Jinping stopped in Yiwu and visited the Yiwu International Trade Market. He commended the city for taking its small commodities into the big global market. “Everyone is a participant, builder, and contributor,” Xi said, urging the trade market to contribute more to expanding markets at home and abroad.

We can, from Yiwu’s innovative business environment, platform of talented experts that display professionalism in creating quality products for the domestic and international consumer markets, and its adaptable market, sense the strong heartbeat of China’s domestic consumer market and feel confident about its future.

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