Yiwu is the world’s largest commodity circulation center and exhibition center. The administrative level is still a county level city, but you will find foreigners almost everywhere when you are walking in the streets. And according to the statistics figures of Foreign Economic & Trade Department and the Industry & Commerce Department, at present the number of the overseas residential person has reached more than 11000, including 2124 foreign enterprises representative offices which are from 85 countries and regions all over the world. The reporter learned from the the police that at present, the number of Yiwu foreign residential people has largely exceeded the number of Hangzhou and Ningbo (two deputy provincial cities), and it ranks the top in Zhejiang Province.

Tens of years ago, if Yiwu people see a foreigner in the street, they will normally be surprised to look back. While today, Yiwu commodity city has attracted more and more foreigners to come to this small magic city.

It is reported that in 2009, Yiwu public security bureau entry-exit administration issued 17612 visas. And it was the third year followed by 2007 and 2008 when the number exceeded that of Hangzhou and Ningbo. In addition, in 2009, the registered number of foreign people who came to Yiwu for tourism, businesses or visiting relatives was 317751. And these people are from 203 countries. The growth reached 19.52% compared with the same period of 2008.

And to the statistics figures, at present, the number of the overseas residential people is more than 11000, including 2124 foreign enterprises representative offices which are from 85 countries and regions.

Because of the cluster of foreigners, “exotic amorous feelings street”, “the United Nations communities” and so on have emerged in this city. After years of business discipline and life accumulation, many foreigners can speak Chinese, even speak yiwu local dialect, they have been deeply involved in yiwu city.

Two six-floor buildings which are so old that may easily let people to connect the early 1990s Yiwu street style in mind. Facing to guests, the clerk do not show excessive politeness, and even the head doesn’t bother to lift, they are just flipping through the accounts; Some ceiling paint has fallen off, and most internal facilities are disrepaired.

That is just today’s Yiwu Red Mansion Hotel. However, many yiwu business operators and almost all the taxi drivers know this hotel. It is said that Yiwu Red Mansion Hotel was one of the best hotles in Yiwu last during last century. And it wittnessed the development of Yiwu trade. Up until now, many foreign businessmen especially Pakistan merchants still like to start from here to walk into Yiwu market to open their Chinese wealth dream.

The first overseas enterprise that set institution in Yiwu was born in Red Mansion Hotel. One day in 1994, a Pakistan businessman named Hadelli went to thus hotel and in a sense, it is this Pakistani changed the further management route of the hotel. Before long, he set up an agent named Hason in this hotel. And according to Yiwu editorial department, it was the first overseas institution in Yiwu.

Inadvertently, Hadelli made a history. And things as he expected, in the next 10 years, the global demand of yiwu commodity increased quickly. By the east wind, and his business grew quickly. Than during the next period, more and more foreign cients came to set their business agents in this hotel. Now there are more than 30 foreign institutions there. Most of these representive offices are from Pakistan and some are from Afghan.

Now they are trying to improve the business environment of this hotel. They hope to open a green channel to attract more foreign businessmen.

-the Upsurge of Exchange Rate of RMB Against US Dollar

“According to current situation, we are afraid to accept orders of which the delivery date is in April next year. It’s very difficult to offer price.” In front of large orders palced by the Carrefour, France, Chunsheng Huang, principal of Yiwu Tianbo Garments Co., Ltd is particularly cautious. The upsurge of exchange rate of RMB against US dollar is completely out of his expectation.

Profits of The Previous Orders Are Reduced

Since September 9, the exchange rate of RMB against US dollar has hit high records consecutively. Especially on September 21st. the average rate was 6.6997, breaking the 6.7 record.

Although shirt sales in South American market before September was in good condition, and orders are more than the previous years while the appreciation of RMB is uncontrollable and hard to pre-detect. Mr Huang said in depression, “the profit margin of textile and garment enterprises is very low, generally less than 5%. Since the value of RMB is rising so fast, more orders may not be good news.”

Be Cautious of New Orders

“We refused several orders this year in August because the risk is too great under this situation. We’d wait till the Canton Fair.” In front of such unprecedented “special circumstances”, pricipal of Yiwu Xieshou Garments Co.,Ltd Qiyao Cheng adopted the stratagy of “wait and see”.

In reaction to the constant new orders and consecutive rising exchange rate, principal of Zhejiang Bangjie Digital Knitwear Co., Ltd. Wang Jun tried to communicate with old customers and observe their reaction to price rise in combination with the anticipation of future exchange rate so as to offer a reasonable price. “In this way, we can cut our losses and persuade customers into accepting price rise willingly,” Wang said, “The most direct way to avoid exchange rate is to raise price, while it’s uneasy for customers to accept.”

To Make Products More Competitive Is The Way Out

In 2005, when the exchange rate of RMB against U.S. dollar was rising, many Yiwu enterprises adopted euro to avoid exchange rate risk, but now the situation of euro is not satisfactory either. Euro balance is no longer a good choice.

“Facing RMB appreciation, the fundamental way out for enterprises is to make your products more competitive.” Director of Foreign Trade Section of Yiwu Foreign Trade and Economic Cooperation Bureau Wenbing Chou said. Locking the exchange rate or hedging may be effective in the short term, but it’s still too hard to avoid long-term rate risk especially when RMB appreciation rate is so difficult to expect. “If companies have competitive products, raising prices or using RMB for balance will no longer be difficult and the appreciation of RMB will not seem to be so threatening.”

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South American Market Is Expected to Become The “New Engine” of Yiwu Foreign Trade Prosperity

Recently, 16 Yiwu enterprises returned from the exhibition of 2010 Sao Paulo, Brazil International Houseware & Gift Fair (Browse Yiwu Trade Shows and 2010 Yiwu Fair) . This is the first time for the delegation to participate in exhibition held in Brazil.

Could Brazil, a distant and passionate country in South America, with which Yiwu entrepreneurs have seldom done business reserve tremendous business opportunities?

In fact, this trip was never just for an exhibition.The aim was to explore the Brazil market. Jia Liping, a representative told us, “We should go out to see more and exchange ideas with others rather than just stay still in the current market. At present, China Yiwu International Trade Market share in Europe and the United States has been relatively stable, while Europe and the United States economy has not fully recovered and the Middle East market is highly competitive, therefore, prices are kept quite low. It’s necessary for enterprises in Yiwu to explore new markets if they want to make a breakthrough.

In contrast, South America was less affected by the financial crisis, and the consumer goods market is growing fast in recent years. This exhibition is a rare opportunity to visit the South American market and understand in-depth of market demand.”

“Sao Paulo, with a population of more than 18 million, is the largest city as well as industrial center of Brazil, which, to a great extent, decided its important economic position. It is Brazil’s largest daily necessities distribution center with a 25 Street and two great fairs and it allows either wholesale or retail business,” said Zhu Dejun, “And i believe enterprises who have visited there will be greatly inspired.”