On the surface, Yiwu looks like any other small, nondescript city in the southern Chinese countryside. Construction is everywhere, people are on the move and the growth is fast.
But the engine driving Yiwu’s growth is unique. Featuring the largest small commodities market anywhere in the world, the city has drawn traders from all Muslim nations into a thoroughly commercial blend of pan-Islamic Chinese life. In the rural heart of Zhejiang Province, 300 kilometers southwest of Shanghai, Yiwu is the epicenter of China’s commodities trade with the Muslim world, mainly from Afghanistan and Pakistan of the Middle East.
Not far into the downtown area, Arabic script begins to replace the standard Chinese characters. Below hotels and restaurants with names like “Hotel Kurdistan,” “Al-Arabi” and “Karam House,” men sit on patios smoking shisha and drinking silver pots of red tea. Arabian songs spill out into the nights as headscarf-wearing women clip along partially lit streets.
“Going to Yiwu is like going on pilgrimage…for trade,” said 30-year-old Uighur-restaurateur Azziz Idris. “It’s the business hajj.”
The renowned small-commodities market in the world boasts over 300,000 products ranging from socks, fashion accessories and Christmas tree lights to hardware, electrical sockets and windshield wiper covers. There are 10 major exhibition halls holding 58,000 booths with over 100,000 merchants.
On a given day, there are over 200,000 traders and 8,000 foreign businessmen – from over 100 different countries and territories – have set up shop permanently in the city.
As an untapped market, Yiwu’s cheap land is perfect for manufacturing, its location sitting at a conflux of transportation lines and industrial sites easily accessible to ports in Shanghai, Ningbo, Hangzhou and Wenzhou. In 2006, the city’s export volume was US$1.34 billion, up 22.76% year-on-year. It is estimated that over 1,000 containers leave Yiwu every day.
Middle Eastern Muslim traders account for about 75% of these containers and the United Arab Emirates is the single biggest customer. The Middle East has indeed carved itself out a niche in Yiwu – perhaps it is a marriage of convenience because the Middle East manufacturers little and is heavily dependent upon imports.
Some small-scale traders are even shifting the bulk of their operations to Yiwu with a view to taking advantage of land and production costs far below those of Dubai. Middle Eastern traders have so far set up more than 3,000 permanent offices in the city.
A new beginning
In 1982, China founded Yiwu commodities city as a means of developing the area through commerce. But it would be 15 years before an enterprising Pakistani trader arrived in town and, thanks to his connections in the international Muslim community, put Yiwu on the map.
Sitting in his third floor office in the Hong Lou Hotel on Chouzhou Road, the lithe, coffee-colored Pakistani businessman Khalid Mahmood claims to have spearheaded the small commodities supply chain in Yiwu. He first arrived in China in 1987, one year after the Karakoram Highway linked Pakistan and China. Crossing the Kunjerab Pass he reached Xinjiang’s desert oases and stopped in Urumqi, where he remained into the early 1990s.
With Chinese goods in high demand in Pakistan, Mahmood sent shipments back down the road which had taken him into China. However, since all the manufacturing was based in Shanghai and Guangzhou, restocking was difficult.
“There was no bulk supply,” said Mahmood, now the president of the Pakistani Chamber of Commerce in China. “We bought everything from the supermarket. But Pakistan wanted more and they wanted it fast. Xinjiang was nowhere; it took ages to reach. Shanghai and Guangzhou were too developed, too expensive. We needed a place of our own.”
A fortuitous meeting with a Uighur translator in a Shanghai Xinjiang restaurant in 1995 provided the opening.
“For a US$65 fee, [the translator] promised to show me a bulk market in rural Zhejiang. There was nothing, one large warehouse with rows of small stands. But the town was quiet, the air clear and the people honest. I knew we’d found it.
“They [people] had that kind of trust, honesty and transparency you need for trade. Guangzhou was sketchy, Wuhan was rude; but Yiwu was quiet, convenient and safe. What more could we want?”
In 1994, Mahmood opening Yiwu’s first foreign trading firm. When this network grew to over 20, he opened Yiwu’s first foreign restaurant in the Hong Lou Hotel. Together, they sent a charge through Yiwu, magnetizing the once sleepy town. Feeding off its own momentum, it hasn’t looked back since.
The Muslim community started out small in Yiwu. Syrian Mahmud Ahmad Al-Hakeem, a small commodities trader from Kuwait, arrived in 1999. He met once a week with the Muslim community at the mosque.
“At that time, there was no real mosque. There were two rooms for 50-60 people on the Hong Lou Hotel’s ground floor. But nine months later, we were over 150, spilling into the parking lot. The city offered us a one-year lease on a larger space,” Al-Hakeem recalled.
As small commodities trade in Yiwu began to take off, the large Middle Eastern Muslim community progressively outgrew its space.
“By the time we reached 2,500, the city leased us a once-bankrupt container packing center,” said Al-Hakeem. “We’re not sure how long we’ve got it for so we’ve already started building another one.”
A symbiotic relationship
For all the business intimacy with Chinese counterparts, relationships rarely leave the market floor.
“From a business perspective, Chinese and Muslims are very close, but it ends there. Without a doubt, eating is the single greatest obstacle to making friends. We cannot eat in their restaurants or their homes [due to religious dietary restrictions].” Mahmood said.
Nonetheless, Yiwu has become a safe haven for some traders. For Falah S. Muhammad, a Kurd from war-torn Iraq, China may be the only way out. He speaks fluent English and once taught high school history and economics and worked for the UN High Commission on Refugees. But the war has made Baghdad too dangerous and Northern Iraq too poor. With Dubai’s prices too high, Muhammad moved to Yiwu last year.
“Chinese prices are better for Iraqi people,” he said. “I just want to feed my family. I’d like to make a small profit, selling quality goods. I’d also like to help my friends, even strangers. Money’s not everything in life but we must survive.”
The Muslim culture also extends to Chinese residents. Koranic study and Arab home schooling of Muslim children are creating new opportunities for translation work, especially for Ningxia’s Hui Muslim farmers, many of whom which struggle to survive eking a harsh existence on inhospitable land.
Qie Suming left Ningxia for Yiwu seven years ago, after studying Arabic for four years.
“I studied Arabic in a home school, at night after work. I earned a lot and the teachers were great. Now I have a steady stream of clients and plan to open my own trading firm,” Qie said.
As one of Yiwu’s 1,000 Ningxia translators, he’s taking cues from the many young men before him who now run successful firms.
Su Guo Bin, vice secretary of the Yiwu-branch of Ningxia’s Wu Zhong City Arabic Training Center, is thrilled.
“It gives these young people a great chance to better themselves and their family. It uplifts Chinese Muslims to positions of economic self-sufficiency for the first time. And, it relieves a tremendous burden from local governments.”
Some return to Ningxia and open shops while others settle in Yiwu, but all are giving back and the effects reach far. Once thought of as a language of separatism, Ningxia now sees Arabic as a means for prosperity and peace.
At day’s end, the muezzin’s call reaches out from Yiwu’s first mosque in the Hong Lou Hotel, past the front desk, to the workers waiting with paint rollers by the steps. Green matting is rolled out across the parking lot as an overflow crowd kneels beneath the setting sun. Behind them a Chinese couple volleys a badminton shuttle, totally unfazed.
A Uighur boy roasts kebabs beneath a single, bare bulb. And Afghan traders, late from the market, hurry back into the womb of Yiwu’s Arabian Nights.