It was once written that if China is the world's factory, then Yiwu, a city in East China's Zhejiang Province, not Beijing, is its capital. The city is home to Yiwu International Trade City, considered the largest small commodity wholesale market in the world. The vast majority of the trade at the market, as well as in Yiwu itself, is exports. But exports have been in decline recently as China restructures its economy to be driven less by exports and more by domestic consumption. Increasing imports would help meet that goal. As a center of international trade and a key player in China's "One Belt and One Road" initiative, Yiwu is well positioned to play a leading role in boosting imports. Recently, the Global Times looked into how the initiative is helping the city restructure its economy. This is also the second story of a series of Global Times reports from Yiwu.

A truck enters the Yiwu Bonded Logistics Center on May 16 in Yiwu, East China's Zhejiang Province. The center serves as a public warehouse that the Yiwu authorities set up to encourage imports and help companies save on logistics costs. Photo: Chen Qingqing/GT

Jin Haijun used to be an exporter. Like many other businessmen in Yiwu, East China's Zhejiang Province, he made his living selling products to overseas customers.

But as demand for China's exports declined in recent years, the 43-year-old trader noticed growing demand for foreign goods at home. So he decided to turn his business around.

He told the Global Times his story on May 17 while overseeing his Spanish wine store at Yiwu International Trade City, the world's largest wholesale market for small commodities.

The walls of the 400-square-meter store were lined with racks holding hundreds of bottles. Beneath a Spanish flag hanging from the ceiling, pallets stacked with cases of wine occupied the floor in front of a minibar where customers could sample Jin's stock.

Imported wine has become an easier sell as individual incomes have grown.

China's personal disposable income grew 8.9 percent to 21,966 yuan ($3,355) in 2015, the National Bureau of Statistics reported in January.

"The 'Made in Spain' or 'Made in France' wine is not a luxury product anymore," he said. "For only 200 yuan to 300 yuan, Chinese consumers can get a taste of high-quality products from Europe."

Like Jin, Yiwu is also trying to make the switch from exports to imports, or at least trying to make imports a greater part of the city's overall trade.

Yiwu has been an export juggernaut. Of the $34.22 billion in trade it reported in 2015, 99 percent was from exports, according to data from the local statistics bureau.

The disparity underscores the challenge China faces as it attempts to restructure its economy to rely less on exports and more on domestic consumption, which would get a boost from higher imports.

Policymakers are also encouraging imports through the "One Belt and One Road" (B&R) initiative.

However, there have been some bumps in the road. Imports plunged 13.2 percent to 10.45 trillion yuan in 2015, while exports fell 1.8 percent to 14.14 trillion yuan due to the global economic slowdown, according to media reports.

However, China's consumers are expected to spend up to $6.4 trillion a year by the end of 2025, up 70 percent from the $3.7 trillion spent in 2014, according to a study published by the New York-based Demand Institute think tank in November 2015.

From global seller to global buyer

Considering the continuing downward pressure on exports, Yiwu's government has been stepping up efforts to increase imports in recent years, according to the local government's website. 

"The city has been trying to shift from 'sell to the world' to 'buy from the world,'" said Wang Birong, chief of Yiwu's Bureau of Commerce.

The hope is that merchants will be able to build up connections around the world with a little help from the B&R initiative, Wang told the Global Times on May 16.

The B&R initiative, which was proposed in 2013, is shorthand for the Silk Road Economic Belt and the 21st Century Maritime Silk Road, the components of China's overseas investment and trade initiative.

Omarov Dauren from Kazakhstan, 27, sees great potential in selling products to China.

Before he got into the trade business, he helped organize a Kazakhstani business delegation to China after Nursultan Nazarbayev, Kazakhstan's president, announced a new economic policy called "the Bright Road" in November 2014, he said.

"Along with the B&R initiative, the economic plan gave us an idea that the upcoming cooperation with China would be promising," Dauren told the Global Times on May 16.

After spending more than a decade in China, the 27-year-old is now the general director of a recently established import and export company called "Astau" - a Kazakh word that means a large food platter put out for special occasions.

"Chinese people are our honored guests, who have to be well served," Dauren explained.

More and more businessmen like Dauren discovered new opportunities through the B&R initiative, especially in places like Yiwu, which is home to hundreds of thousands of merchants from around the world.

At a recent imported products event in Yiwu, organic products such as honey, biscuits and salad dressing - most of which were produced by small and medium-sized enterprises in Kazakhstan - got a lot of attention from those in attendance.

The city's authorities offered foreign vendors free tent-like booths to display their products at the event.

They also provided space in the Yiwu Bonded Logistics Center as a warehouse to help them cut down on costs.

Dauren considered these perks as "favorable policies" to attract more importers to the city.

Expecting more imports

Bringing products to China through cities like Yiwu is seen as "great business opportunity," said Andrea Barocco, an Italian businessman in charge of market development for an Italy-based bio food brand called Biocal. As a foreign merchant, Barocco welcomes the B&R initiative.

Redefining Yiwu as a new platform instead of a traditional trade city is part of the local government's interpretation of the B&R initiative, said Wang, the commerce official.

In the first quarter of 2016, Yiwu's imports jumped 16.6 percent year-on-year to 440 million yuan, according to local customs data.

The city's merchants imported more than 400 different products from 50 countries and regions around the world. And total wine imports surged about 340 percent year-on-year to 15.42 million yuan.

The first store to sell imported goods at Yiwu International Trade City was established in 2008.

The trade center  now offers 200 storefronts for importers selling 77,000 products from 100 countries and regions, said He Jinfa, general manager for imports at Zhejiang China Commodities City Group Co, the Yiwu trade city's operator.

"We expect much more robust growth [in imports] in 2016," he said.

"Also, we'll become more selective in introducing new importers to the Yiwu trade city," He told the Global Times on May 17.
Newspaper headline: Turning trade around