Written by Charles Stevens
Published in Development
In this final instalment of our monthly series of reports looking at the impact China’s BRI project is having on the local infrastructure situated along its route, explorer and China scholar Charles Stevens reaches Yiwu, the end of the line for the BRI’s most important trade routes
THE NEW SILK ROAD PROJECT
Covering 10,000 miles and 18 countries The New Silk Road Project was an exploration of China’s emerging Belt and Road Initiative. Having departed from London in June 2018, it travelled along the full length of the world’s next great trade route – a nexus of power, culture and commerce that now sits at the heart of China’s foreign policy.
In early January 2017, a locomotive pulling 34 freight cars, laden with goods, set off from Yiwu in eastern China on a 17-day journey to London. This was the first direct freight train to make the overland journey from China to the UK – heralding growth for both overland trade and Anglo-Sino relations (indeed, this event acted as the impetus for our own journey to Yiwu).
Three hundred kilometres away from Shanghai, nestled in the centre of Zhejiang province, this sub-prefectural city is unlikely to find its way into tourist guidebooks. Yet, as home to the largest small commodities market in the world – Yiwu International Trade City – it is a destination we are all connected to. Many of the goods filling the cupboards and lining the shelves of our homes are likely to have been purchased from the 75,000 booths of this wholesale market.
From here, some of the 1.8 million different commodities available for purchase are exported by the East Wind freight train service or by container ships to shops and high streets across the UK. As part of a vibrant engine for global commerce, it seemed an appropriate terminus after the two months we had spent travelling alongside the overland networks destined to transport these goods in the future.
Cutting a seven kilometre-long swathe through Yiwu, the Trade City and its goods cover 5.5 million square metres; an area equivalent to more than a quarter of Manhattan. Across five floors and organised into five utilitarian districts, buyers can purchase anything from artificial flowers, strips of taffeta and samovars to parasols, pannikins (small metal drinking cups) and lace mantillas (scarves that cover the shoulders and head). As the market website states, it is ‘famous for its abundance of commodities, high quality and competitive prices’.
The Belt and Road Initiative has only helped to galvanise the ambitions of those behind Yiwu. Their desire is to expand its global imports alongside exports as China continues to transition from a manufacturing-oriented economy to one based on the more profitable service sector. The Yiwu International Commodities Fair in October 2018 highlighted this shift. It focused on attracting EU and US-based business to feature in the market’s 'Imported Commodities Mall', as well as to cater for the growing demands of China’s middle classes. Nevertheless, regardless of these macroeconomic shifts it was still clear that ‘there is very little that you won’t be able to find in Yiwu,’ as Amy Chen, a jewellery vendor told us.
The international pull of the market was striking as we walked the long corridors. There were dozens of Middle Eastern customers as well as traditionally dressed women from Sierra Leone in search of cosmetics to import back to Freetown, and a scattering of European buyers. They were all testament to several realities: the global reaction to China’s growing economic weight, the expansion of African nations’ business dealings with China, and Yiwu’s role as an incubator for commercial trends.
As we wandered through the arts section in District 3, the peace was disturbed by an energetic pair of Pakistani freight forwarders. Walking together, they praised the construction of the China-Pakistan Economic Corridor, a $62billion component of China’s Belt and Road Initiative, before talking through their 40-day delivery timeline for goods leaving Yiwu and arriving in Lahore nearly 3,000 miles away.
Their frustration over the delays encountered during the customs process echoed our earlier conversation with the founder of ImuPerku, a Lithuanian online shopping destination. He had come from Lithuania for a three-day visit to source Christmas stock. At Yiwu, it was not ethnicity, geography or experience that bound these customers together, but the universal language of commerce, communicated through the click of the calculator, the rub of the fingers or a shake of the head.
Yiwu International Trade City is slowly defining itself not just as a frenetic market but also as a centre for high technology. Near a collection of shops selling bill counters, the China Academy of Art Store showcased their touch sensitive and Wi-Fi controlled lamps made with German beech. In the neighbouring shop, Konke, China’s leading smart home company, displayed a range of home appliances and integrated software systems providing descriptions in both English and Chinese characters. Unlike elsewhere in the market, the store had a small range of products and an aesthetic closer to Scandinavian design.
Despite Yiwu’s embrace of these technologically advanced products it quickly became apparent that it is not fully aligned with the global shift toward a digital storefront. Its bricks-and-mortar strategy, rising labour costs and the growth of e-commerce has resulted in wholesalers leaving and a growing number of booths were left unoccupied, resulting in loss of rental income and customers.
The importance of adapting to these technological changes and developing a digital infrastructure is clear when you consider the growth of China’s digital Silk Road, which will include fibre optic cables, artificial intelligence and mobile structures to complement China’s Belt and Road Initiative. The scale of this addition marks the seriousness with which China looks upon the growth of the digital space.
For the time being, Yiwu International Trade City remains a global trade hub and an important terminus along the New Silk Road, but it is yet to be seen if it can retain this preeminence in the decades to come.