^{Photo: Global Times}

A Quiet “World’s Supermarket”

In late August, the usually bustling Yiwu International Trade Market—often called the “world’s supermarket” for its vast range of low-cost goods—felt eerily quiet. Escalators stood still with signs warning “for the safety of children,” and clusters of kids played with Lego pieces at shop entrances while merchants stood idly by.

Instead of the usual throngs of global buyers, the five-story marketplace seemed dominated by families finishing summer vacation. “It’s not peak season,” said Li, a local vendor of cleaning supplies, explaining that his main buyers now come from the Middle East and Southeast Asia—not the U.S.

Declining U.S. Orders and Rising New Markets

Yiwu’s shift reflects a larger trend in China’s export map. Exports from Yiwu to the U.S. have plunged from 20% eight years ago to about 15% last year, and even lower today, according to Ashish Monga, CEO of IMEX Sourcing Services.

This mirrors national trade data:

• China’s exports to the U.S. fell 12% year-to-date through July to $251.4 billion.
• In contrast, exports to the 10 largest Middle Eastern economies climbed 13%, reaching roughly $116.5 billion.
• Shipments to Africa surged 24%, while exports to Southeast Asia—now China’s largest regional trading partner—continue to grow rapidly.

Inside Yiwu, this pivot is visible: more signs in Arabic, Russian, and Korean are replacing English, and once-general scarf sections now specialize in hijabs and modestwear. Yiwu officials have even launched Spanish-language courses for merchants to serve rising Latin American demand.

Yet replacing the U.S. isn’t easy. “If you lose one big U.S. customer, you need five in emerging markets to make the same margin,” Monga noted. Margins are thinner, and it’s more work for less money.

Why Yiwu Is Turning Away From the U.S.

Trade tensions are a key driver. The U.S.-China trade war and elevated tariffs have left many Chinese suppliers wary of overreliance on America. Currently, average U.S. tariffs on Chinese goods hover around 55%, more than double the 25% rate during Trump’s first term.

Businesses scrambled to frontload orders before tariff hikes, which temporarily boosted Chinese export numbers and filled U.S. stores with early holiday stock. Costco, for example, had Christmas goods on shelves by September—likely shipped months in advance to dodge higher tariffs.

But such strategies are unsustainable. Cameron Johnson, a Shanghai-based partner at Tidalwave Solutions, said suppliers now see non-U.S. markets as more stable, even if they grow more slowly. “People don’t want to be beholden to the States,” he explained.

Adding pressure, new U.S. port fees on China-made cargo ships—regardless of ownership—are set to take effect October 14, potentially costing millions of dollars per shipment.

Limited Access to Europe, Expanding in the Gulf

Yiwu’s merchants face strict EU compliance barriers that limit expansion into Europe, making the Middle East, Africa, and Latin America more attractive.

Cliff Zhang, CEO of Templewater, noted that Chinese companies are increasingly eyeing Gulf Cooperation Council (GCC) countries like Saudi Arabia and the UAE for expansion, given their soaring infrastructure and retail demand.

This strategy aligns with China’s Belt and Road Initiative, which has financed ports, railways, and logistics hubs across the Middle East and Africa, giving Yiwu merchants new channels to distribute goods at lower costs.

Trade Talks Offer Little Relief

Meanwhile, U.S.-China trade negotiations in Madrid produced no breakthrough—just a vague “framework” agreement over TikTok’s divestiture from ByteDance. Former President Donald Trump is expected to speak with Chinese President Xi Jinping soon, but businesses remain skeptical.

David Li, CEO of Hesai (the world’s top LiDAR supplier), described U.S. tariffs as simply “a cost of doing business”—one that must constantly be renegotiated as regulations shift.

With no sign of tariff relief, many Yiwu vendors see pivoting away from the U.S. not as optional, but as necessary for survival.

Market Reaction

Despite trade friction, Chinese and Hong Kong stocks showed resilience this week:

• CSI 300 rose 0.47%
• Hang Seng gained 1.16%
• Hang Seng Tech Index jumped 2.89%, with Baidu shares surging up to 14% on strong earnings.

This performance underscores that China’s economy is adapting to a post-U.S.-centric world, and Yiwu—the marketplace that ships much of the world’s holiday goods—may be the clearest signal yet of China’s accelerating pivot toward emerging markets.