China’s ‘Christmas village’ ushers in bold new era of trade

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People wave Chinese and British flags at the departure of a freight train transporting containers from the UK on April 10, 2017, en route to Yiwu in China's Zhejiang province. Photo: AFP / Isabel Infantes

When images of Christmas come to mind, you might think of a beautifully adorned Christmas tree surrounded by exquisitely wrapped gifts. Snow gently falls outside windows ringed with colourful lights. Perhaps an electric Santa and his sleigh on the snow-covered front lawn wishes a merry holiday season to all who pass.

Yet, far from Santa’s mystical North Pole workshop, there is a city in China’s Zhejian province that has just as big a connection to Christmas, as any of the above.

Let’s put it this way — if you decorated a Christmas tree, strung up Christmas lights on your home or indulged in any yuletide presentation, chances are the decorations were made in Yiwu, China.

Having earned the distinguished description, “The city where Christmas is made and sold,” by Britain’s BBC, Yiwu, an inland city of roughly 1.2 million, reportedly produces nearly 60% of the Christmas decorations consumed world-wide in 600 factories. That includes everything from US$4 million in tinsel, to Father Christmas hats and fibre-optic trees.

According to data from Hangzhou Customs and reported by ABC News, between Sept. 2016 and August 2017, the city exported $3 billion in Christmas products, or roughly half of what America alone will spend on decorations this year.

However, while the world tends to focus on the city’s lavish export volume in the name of Santa Claus, Yiwu also claims to have the world’s largest collecting and distributing center and purchasing base for small commodities. In fact, the city has undergone several stages of reform and now bills itself as a national hub for import commodities.

At this very moment, Yiwu’s supply of commodities come from more than 100 countries, involving a staggering 10 million domestic traders and half a million visiting overseas traders. And that’s not even counting another 13,000 permanent foreign merchants.

The massive, multi-storied Yiwu International Trade Market, located downtown, covers nearly 5.5 million square metres and features 75,000 booths selling all types of goods.

No fake, high-end products, but legitimate manufactured goods reflecting Yiwu’s history of exponential growth as a hyper-market, which began in the early 1980s.

In the words of author Mark Jacobs, who deftly chronicled the city’s rise to success in, Yiwu, China: A Study of the World’s Largest Small Commodities Market“anything can be had for a dollar or a yuan.”

Considered a first stop for visiting traders and bulk buyers, the market is comparable in size to 26 large department stores.

It’s highly successful business model of “purchasing from the world and selling to the world,” has also made it attractive for extending marketing channels.

The 2017 Yiwu Import Commodities Fair, for example, attracted more than 1,500 participating companies and purchasers from countries around the world with a total turnover of 1.276 billion yuan.

As noted by Britain’s The Guardian, businessman Girdhar Jhanwar, who in 2002 became the first Indian trader to set up in Yiwu, summed it up nicely: “Today, retailers from anywhere in the world can’t survive without Yiwu products, Anyone can come and set up a business in Yiwu, and get items to sell in countries all around the world. They don’t have to go anywhere else in China. Yiwu has become a one-stop shop.”

One of China’s most multicultural and tolerant cities, the local government has made an effort to spread the message that foreigners are welcome and encouraged. Arabic traders from the Middle East and North Africa, for example, operate freely.

Along with the international prestige of being a long-standing buyer and seller of commodities, Yiwu boasts several key improvements in infrastructure.

Located just an hour south of Shanghai via fast train, it now has a viable railway port, an airport and an international mail exchange. It has also been approved to set up a designated port for transporting meat, and it is applying for designated ports for other goods.

To expedite the flow of trade, the local government has promulgated a set of specific policies to accelerate customs clearance procedures, and, set up its own transport and distribution network, involving thousands of logistics enterprises and freight forwarders.

The result? Fast and cheap delivery of commodities to all other destinations. A feat even a modern-day Santa would be impressed with.

It’s no surprise then, that Yiwu is also exploring the vast potential of e-business development.

As one of best cities in terms of supply of goods and logistics, Yiwu is a vital channel for foreign consumer goods. In particular, under President Xi Jinping’s Belt & Road Initiative, freight trains run directly between Yiwu and Madrid, London, Prague and even Tehran.

The trains export “Made in China” commodities, and bring foreign goods back, reviving the old Silk Road trading routes and offering new trade opportunities.

It all boils down to creating a more open economy, via the promotion of the import trade system.

In the bigger picture, Lu Jinyong, professor of Beijing-based University of International Business and Economics, said the expanding trade encompassing specialized markets such as Yiwu, will help China fix its trade imbalance, upgrade domestic consumption patterns and improve the nation’s industrial infrastructure.

And, spread Christmas cheer across the globe. For in Yiwu, it’s always Christmas.

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