by Vikas Saraswat - Jun 20, 2015 01:00 PM +05:30 IST

The story of a small town in China that you won’t even find on a standard political map of the country, but which reflects the nation’s transformation.

In the annals of international trade, a wonderful chapter was written last winter by a train journey from a Chinese city to Madrid in Spain. Laden with 1,400 tonnes of Christmas goods in 30 containers, this longest ever train journey traversed a distance of 13,000 km in 20 days, reaching Madrid on December 9. Then, carrying olive oil, cured ham and wines, it returned to its origin in early February, just in time for the Chinese New Year.  A journey by ship would have taken roughly double the time either way.

If this is fascinating, equally enchanting is the story of the Chinese town from which this train rolled out. Three hundred kilometres south west of Shanghai, Yiwu—population around 12 lakh—is a county-level town in the Zhejiang province of China and comes under the jurisdiction of a larger prefecture-level city Jinhua with a combined population of 52 lakh. While one will not be able to locate Yiwu on a standard political map of China and will have to make do with Jinhua as a reference point, it is far better known than the latter, nationally as well as internationally.

My first visit to this town, some five years ago, amazed me in a manner Alibaba would have been after finding the secret cave. Just that there were many more adventurers seeking fortunes and a far bigger trove than the terminable treasures stored in a cave.

More than half the population of Yiwu consists of immigrants from within and outside China. The town wears a deserted look and comes to a virtual halt during Chinese New Year vacations when the migrants move out. More than half of the shops and restaurants close down and it is difficult to even hire cabs. However, for rest of the year, it is business uninterrupted, Sundays included.


What puts this small town on the international stage is a mix of local entrepreneurship and wondrous governmental effort as a trade facilitator. Yiwu today is inarguably the largest commodity market in the world. From stationery to bicycles, garments to bags, hosiery to artificial flowers, electric appliances to footwear, toys to telescopes, there is hardly a commodity which is not traded in Yiwu.

No wonder, the town draws buyers from all over the world. Besides commodities of general nature, there are shops which cater to localised requirements of overseas markets. You have dedicated shops selling abayas to Arabs, hookahs to Persians, Christmas wreaths to Scandinavians and Hindu gods and goddesses to Indians. Drawing rooms in Nairobi, furnishings in a Kiev hotel or lounges in Esfahan might carry a local flavour, but chances are that the wares were imported from Yiwu. Whether it is Eid in the Gulf, Deepawali in India or Christmas in Germany, Yiwu has a slice of the cake. Preparations for festivals and events the world over begin well in advance here.

To understand Yiwu is to understand the province of Zhejiang. The entrepreneurial spirit of people of Zhejiang can be compared to that of Gujaratis and Marwaris in India. If the three city regions—Shanghai, Beijing and Tianjin—are not considered, Zhejiang has the highest per capita GDP in the country. The people of Zhejiang have been traditionally enterprising, and although many towns and villages in the region were established wholesale markets as far back as the early 18th century, it was Deng Xiaoping’s opening up of the economy in 1978 which unshackled the force of modern enterprise here. Locals have told me that much before relations between China and Taiwan could officially normalise, people from the province were securing agreements on setting up manufacturing ventures with Taiwanese finances with a mere shake of a hand. It was in Zhejiang that the banks started lending to private enterprises. The province has had consistent 10 per cent GDP growth for the last 30 years.

While other cities in Zhejiang embarked on manufacturing, Yiwu, a village of nomads hawking sugar lumps and chicken feathers from village to village, began recouping its trading soul. After the reforms, Yiwu was one of the first three free markets in China where farmers were permitted to sell their surplus produce under the policy of Town Village Enterprises. In 1982, an open air market with allocations to 700 vendors was laid out by local authorities. Today, Yiwu has a state-of-the-art international trade market spanning 16 sq km.

This continuously expanding market, on my visit last winter, had around 80,000 booths dealing in 300,000 commodities with a footfall of more than 60,000 buyers a day. More than two lakh foreign buyers are estimated to visit Yiwu every year. Around 30,000 foreign nationals reside in the city and 1,400 foreign offices send cargos to virtually every country on the planet. On an average, 1,500 containers are shipped out of Yiwu every day and the exports are comparable to leading SEZs in China. One can keep reeling out figures but to feel the verve, one has to be on the ground. With different languages, attires and ethnicities bursting through its alleys, the Yiwu market is a daily fair.

Poor knowledge of English among the Chinese is no deterrent and the trade in the market has three abiding features—a calculator, a translator and animated gestures. It is funny at times when a buyer lowering his hand to request a low quote is responded to by ‘lobanya’—the lady boss of the booth touching the ground with her hand, telling him that her price is already rock bottom. One needs to immediately make notes on the business cards collected from different booths as after a while it is impossible to distinguish one from the other. The booths have to be navigated with the help of gate number, street number and floor without which everything looks the same in all directions.

Yiwu, like many other cities in China, has numerous bicycle stands. After getting a lifetime card for a fraction of the cost of a bicycle, one can pick and leave a bicycle anywhere on the numerous stands.

The city has a carnival-like ambience all through the year. Different blocks in the city have turned into ethnic districts. If ChengBei Lu is the mini India in Yiwu, Binwang is the Persian and Middle Eastern corner of the city. Changchun can be seen teeming with Africans on one end and Russians on the other. And depending on where you are getting down, the taxi driver might thank you with an “Assalam alaikum”, a “Namaste” or a “Paka”. There are more foreign food restaurants in Yiwu than Shanghai, Guangzhou and Beijing put together. Be it Turkish coffee or Korean tofu, you get the most authentic of international cuisine in Yiwu. I know a couple of Indians who drive down from Shanghai to Yiwu frequently to satiate their desi taste buds.

Yiwu’s India connection is a story within a story. With the manufacturing sector going nowhere back home and sensing the opportunities, Indians were among the first foreigners to land here. Rough estimates put the Indian diaspora in Yiwu at five figures.

Indians in Yiwu are not only in trade with various parts of India, but also with the Gulf, Spain, Russia, former Soviet republics and Central Asian nations. Given their proclivity for heavy bargaining, they are seen as tough customers by the Chinese, but due to the huge volumes they buy, they are impossible to ignore.

With a temple, a gurudwara, half a dozen Indian stores and 15-odd restaurants, India has dropped firm roots in one corner of the town. Various adverts in Indian restaurants or word-of-mouth communication will invite you to a Maata ki Chowki one day and a langar in the gurudwara on another. The Indian effect has rubbed off on the Chinese as well and Bollywood and Indian cuisine are top draws.

Yiwu has been a gateway to prosperity for many Indians. Operating out of small offices as buying agents and putting in long working hours, many have made quick fortunes. Hearing the success stories, many more keep pouring in every year. But a continuous lament among the Indian residents and visiting buyers is the same I felt on my first visit five years ago. It is ruing the opportunity we have missed here in India. It’s this one thought: “If China could do it, why couldn’t we?”

Vikas Saraswat is an entrepreneur who frequently travels to China.

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