Chindia Alert: You’ll be Living in their World Very Soon
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China’s famed Yiwu International Trade Market, a barometer for the health of the nation’s exports, has been hammered by the economic fallout from Covid-19
Export orders have dried up amid sweeping containment measures in the US and Europe and restrictions on foreigners entering China have shut out international buyers
The coronavirus pandemic has severely dented wholesale trade at the Yiwu International Trade Market in China. Photo: SCMP
The Yiwu International Trade Market has always been renowned as a window into the vitality of Chinese manufacturing, crammed with stalls showcasing everything from flashlights to machine parts.
But today, as the coronavirus pandemic rips through the global economy, it offers a strikingly different picture – the dismal effect Covid-19 is having on the nation’s exports.
The usually bustling wholesale market, home to some 70,000 vendors supplying 1,700 different types of manufactured goods, is a shadow of its former self.
Only a handful of foreign buyers traipse through aisles of the sprawling 4-million-square-metre (43 million square feet) complex, while store owners – with no customers to tend to – sit hunched over their phones or talking in small groups.
A foreign buyer visits a stall selling face masks. Photo: Ren Wei
“We try to convince ourselves that the deep slump will not last long,” said the owner of Wetell Razor, Tong Ciying, at her empty store. “We cannot let complacency creep in, although the coronavirus has sharply hampered exports of Chinese products.”
Chinese exports plunged by 17.2 per cent in January and February combined compared to the same period a year earlier, according to the General Administration of Customs. The figure was a sharp drop from 7.9 per cent growth in December.
After riding out a supply shock that shut down most of its factories, China is now facing a second wave demand shock, as overseas export orders vanish amid sweeping containment measures to contain the outbreak around the globe.
Nowhere is that clearer to see than in Yiwu. The city of 1.2 million, which lies in the prosperous coastal province of Zhejiang, was catapulted into the international limelight as a showroom for Chinese manufacturing when the country joined the World Trade Organisation in 2001.
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Before the pandemic, thousands of foreign buyers would flock to the mammoth trade market each day to source all manner of products before sending them home.
But the outbreak, which has claimed the lives of more than 113,000 people and infected more than 1.9 million around the world, is proving a major test for the market and the health of the trade dependent city.
Imports and exports via Yiwu last year were valued at 296.7 billion yuan (US$42.2 billion) – nearly double the city’s economic output.
Businesses, however, are facing a very different picture in 2020. Most traders at the market say they have lost at least half their business amid the pandemic, which was first detected in the central Chinese city of Wuhan last year.
Just take a look at the situation in Yiwu and you will understand the extent of the virus’ effect on China’s trade with foreign countries – Tianqing
“Yiwu is the barometer for China’s exports,” said Jiang Tianqing, the owner of Beauty Shine Industry, a manufacturer of hair brushes. “Just take a look at the situation in Yiwu and you will understand the extent of the virus’ effect on China’s trade with foreign countries.”
Jiang said his business was only just hanging on thanks to a handful of loyal customers placing orders via WeChat.
“I assume it will be a drawn-out battle against the coronavirus,” he said. “We are aware of the fact that developed economies like the US and Europe have been severely affected.”
The Yiwu market reopened on February 18 after a one-month long hiatus following the Lunar New Year holiday and the government’s order to halt commercial activities to contain the spread of the outbreak.
Jiang Tianqing, owner of hair brush company Beauty Shine Industry. Photo: Ren Wei
But facing the threat of a spike in imported cases, Beijing banned foreigners from entering the country in late March – shutting out potential overseas buyers.
Despite the lack of business, local authorities have urged stall owners to keep their spaces open to display Yiwu’s pro-business attitude, owners said.
“For those bosses who just set up their shops here, it would be a do-or-die moment now since their revenue over the next few months will probably be zero,” said Tong. “I am lucky that my old customers are still making orders for my razors.”
The impact of the coronavirus is just the latest challenge for local merchants, who normally pay 200,000 yuan (US$28,000) per year for a 10-square-metre (108 square feet) stall at the market.
Traders were hard hit by the trade war between China and the United States when the Trump administration imposed a 25 per cent tariff on US$200 billion of Chinese imports last year.
At the time, some Chinese companies agreed to slash their prices to help American buyers digest the additional costs.
“But it is different this time,” said Jiang. “Pricing does not matter. Both buyers and sellers are eager to seal deals, but we are not able to overcome the barriers [to demand caused by the virus].”
Ma Jun, a manager with a LED light bulb trading company, said the only export destination for her company’s products was war-torn Yemen because it was the only country with ports still open.
It is a public health crisis that ravages not just our businesses, but the whole world economy – Dong Xin
Dong Xin, an entrepreneur selling stationery products, said he could not ship the few orders he had because “ocean carriers have stopped operations”.
“It is a public health crisis that ravages not just our businesses, but the whole world economy,” he said. “The only thing can do is to pray for an early end to the pandemic.”
Most wholesale traders in the Yiwu market run manufacturing businesses based outside the city, so a sharp fall in sales has a ripple effect on their factories, potentially resulting in massive job cuts.
Workers pack containers at Yiwu Port, an inland port home to dozens of warehouses. Photo: Ren Wei
At Yiwu Port, an inland logistics hub full of warehouses where goods from the factories are unpacked and repacked for shipping abroad, container truck drivers joke about their job prospects.
“We used to commute between Shaoxing and here five times a week, and now it is down to twice a week,” said a driver surnamed Wang, describing the trip from his home to the shipping port, just over 100km away.
“At the end of the day, we may not be infected with the coronavirus, but our jobs will still be part of the cost of the fight against it.”
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Uber found that Thursdays and Fridays are the most “forgetful” days of the week, and afternoons – between 13:00 and 15:00 – are the most likely hours when people lose things.
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The data suggests that people are most likely to leave behind a guitar on Saturdays and Sundays, and their lunch boxes on Tuesdays, Wednesdays and Thursdays.
It has been described as being one of the first major studies of its kind into public opinion on the subject in mainland China.
Some 80% of respondents said they were concerned that facial recognition system operators had lax security measures.
Separate research suggests that they have good reason to be concerned.
China was ranked the worst of 50 surveyed countries in a study looking at how extensively and invasively biometric ID and surveillance systems are being deployed. The work was carried out by the cybersecurity firm Comparitech.
It said China had no “specific law to protect citizens’ biometrics” and highlighted a “lack of safeguards for employees in the workplace”.
Image copyright GETTY IMAGESImage caption Some cities are deploying facial recognition systems at road crossings to identify and deter jaywalkers
Surveillance concerns
Nandu’s survey was carried out via the internet between October and November.
In its sample, 57% of respondents voiced concern about their movements being tracked.
In addition, 84% of people said they wanted to be able to review the data that facial recognition systems had collected on them and to be able to request that it should be deleted.
The majority said they wanted an option to be able to use ID cards, driving licenses and/or passports as an alternative. But the survey also suggested that between 60 to 70% of Chinese residents believed facial recognition made public places safer.
Hard to avoid
China has more facial recognition cameras than any other country and they are often hard to avoid.
Earlier this week, local reports said that Zhengzhou, the capital of the northeastern Henan province, had become the first Chinese city to roll the tech out across all its subway train stations.
Commuters can use the technology to automatically authorise payments instead of scanning a QR code on their phones. For now, it is a voluntary option, said the China Daily.
Earlier this month, university professor Guo Bing announced he was suing Hangzhou Safari Park for enforcing facial recognition.
Prof Guo, a season ticket holder at the park, had used his fingerprint to enter for years, but was no longer able to do so.
The case was covered in the government-owned media, indicating that the Chinese Communist Party is willing for the private use of the technology to be discussed and debated by the public.
Media captionWATCH: BBC’s John Sudworth put a Chinese facial recognition system to the test in December 2007
But the state continues to make some uses of the tech mandatory.
At the start of the month, a new regulation came into force that requires mobile phone subscribers to have their faces scanned when they sign a new contract with a provider.
The authorities say the move is designed to prevent the resale of Sim cards to help combat fraud.
CHINDIA ALERT: You'll be living in their world, very soon 