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An outdoor Arabic restaurant in downtown Yiwu gives visitors the opportunity to sample delicacies such as skewers of lamb on mobile grills. China has 20 million Muslims, with more than 20,000 settling in Yiwu over the past five years.
Sharron Lovell
An outdoor Arabic restaurant in downtown Yiwu gives visitors the opportunity to sample delicacies such as skewers of lamb on mobile grills. China has 20 million Muslims, with more than 20,000 settling in Yiwu over the past five years.

Where the whole world comes to shop

Yiwu is the world's largest wholesale market and another success story in China's embrace of market forces as it supplies the world with everything from stuffed toys to socks and zippers. reports

In one of the 62,000 stalls that make up the world's largest wholesale market, Yan Yang is busily arranging the studs on the display of piercing ornaments to catch the eye of shoppers. "Business is good, better than last year," she said, as she rewrapped some fearsome looking body ornaments. The stall does all kinds of studs, chains and rings, but it could be selling just about anything. This market is the public face of the greatest experiment in mass production the planet has ever seen. This city of some 2 million people in Zhejiang province in China's booming south-eastern coastal region is home to the world's five biggest sock manufacturers and the largest zip factory. Here everything is about wholesale sales, cash on delivery and moving the cheap goods from China's factories to the markets of the world, wherever they may be. As Li Xuhang, the vice mayor of Yiwu city, points out, if you give each supplier three minutes during an average eight hours of doing business, you would need more than a year to get around the market. The entire city is like a giant wholesale market, with open-front shops selling everything you care to think of and in bulk. The government website says there are 320,000 different commodities on sale, in more than 1,500 categories within 34 industries. The sellers are spread throughout the city, but are concentrated in four huge wholesale markets, with more than four million square metres of selling space. Goods are shipped to more than 200 countries and regions. The global downturn initially hit producers here hard as confidence in the world economy flagged. At the city's annual fair last October, orders dropped 3.2 per cent instead of increasing by the staggering 10 and 15 per cent rates the business community had grown used to. The number of foreign visitors fell by more than 5 per cent, a shocking statistic in this most international of Chinese cities. Foreign orders were similarly down 5 per cent. Now, in the Yiwu international trade market, business is brisk. The dollar or pound shops in the west selling inexpensive goods that tend to thrive during recessions are all stocked with goods from Yiwu, so to a certain extent the factories are proofed against the downturn. Just one floor in this building sells artificial flowers, cuddly toys, fashion jewellery, hair accessories, jewellery fittings, arts and crafts items, photograph frames, crystal and holiday toys, such as buckets and spades. There are rows of Santa Claus shops, which have already shipped for Christmas to the big markets of Europe and the US. Go up a floor and there are bags, wallets, hardware, kitchenware, bikes, watches, clocks, locks, scooters and home appliances. Near here you can access factories where large shares of the world's zippers, buttons, packaging materials, socks and accessories are made. In the hair ornaments section, things are pretty busy. Li Jundao of the Jundao Ornaments Company sees signs of growth. "The first six months of last year were bad, but it's now getting better," he says as he rummages among the array of hair bands in the shop. "These are all made in our factory near Yiwu, which employs around 100 people. We do several million of these a year. "One pack costs four Mao [or "feathers", which is a tenth of a yuan or about five fils], and we do many millions a year, depending on how the orders are going. "Our customers are in China, but also the Middle East, Europe and Africa. It's much better than in the first half," he said, while getting the other family members working the stall, and the employees, to make sure they put things away properly. Dealing with hundreds of thousands of hair clips can be a real headache. It is hard to know what is driving the market at Yiwu. Exports have been weak for some time, falling 23.4 per cent last month from a year earlier, a sharper drop than expected and slightly steeper than July's 23 per cent fall, as demand remained weak. Beijing is concerned even as the economy shows increased vigour. Its plan was to shift the country's producers to focus on domestic markets instead of foreign ones, with the government's 4 trillion yuan (Dh2.15tn) stimulus plan leading the way. The main drivers of the economy are infrastructure investment, strong car sales and a rebound in housing sales and construction. But consumer demand is still weak. What also helps Yiwu is that its down-market products are always in demand be it good times or bad. In many ways, Yiwu is like Shenzhen, the commercial hub in mainland China just over the border from Hong Kong. It seems everyone in Yiwu is a migrant and the language one hears is Mandarin, rather than the Zhejiang dialect. And there are remarkably few old people around: the streets are filled with young people who have come to be part of the hustle that is the city's founding principle. Zhejiang province, where Yiwu is located, is China's richest and its residents, both urban and rural, have the highest per capita income of any province in China. Anyone who doubts that China has embraced capitalism need only visit Yiwu's freewheeling markets to see that this is indeed, a truly free market. However, it is capitalism with Chinese characteristics and you do detect the hand of the state in the way the market is monitored. This is like early capitalism, a vision of competition as the visionary economist Adam Smith might have seen it - a street of shops selling scarves and shawls is called Scarf Street; for belts try Belt Street - just as in 17th century London a street of bakers could only be Baker Street. In Yiwu, local officials are looking ahead and plan to expand the market to 5 million sq metres next year. In her shop, Jin Fang, who is holding a huge teddy bear sporting the logo of the South Africa 2010 World Cup, is confident that business is returning to Yiwu. "You need to come up with different products to make sure they are popular in all kinds of difficult markets. For example, this Egyptian policeman and the villain are very popular with Egyptians and people from other parts of the Middle East," she says, indicating another of her products. She gives the bear a squeeze. "You've got to keep an eye on the future." business@thenational.ae

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