No poetic atmosphere is felt in Yiwu, a small city in Zhejiang Province where people expect to find waterside towns with winding streams, boats, arched bridges and whitewashed old dwellings.

Instead, the city is consumed by the mood of commerce as money flows everywhere and everyone dreams of striking it rich.

There are 200,000 businessmen arriving in the city, the country's largest small-commodities wholesale market, every day to seek their property dreams with a daily cash flow of 287 million yuan (US$34.5 million).

What they face is 320,000 kinds of products including nearly all everyday household items imaginable from embroidery needles to athletic socks.

Surfing the sea of commodities are not only domestic businessmen but also overseas traders.

More than 5,000 foreign merchants permanently live in Yiwu. Thousands more travel to the city every year on buying trips.

More than 6,000 overseas enterprises and merchants have opened accounts in local banks. Even big names like Wal-mart and Carrefour made Yiwu their purchasing base.

Saleem Khan, 57, chairman of Cana Imports LTD, came to Yiwu in 2002 for the first time.

Now he visits the city every month, bringing six containers of products home.

Abdul Moti, 47, vice-manager of Almasmoum Group Company based in Syria, purchases 10 containers of goods every year from Yiwu. During the first six months, his company purchased US$200,000 worth of toys and jewellery.

The city has become a key link in the chain of world commerce with daily exports of 1,000 containers. Most local traders have set up relationships with overseas counterparts, selling products to 188 countries and regions.

But it is only the beginning of the city's ambition.

"We will take 20 years to develop Yiwu into an international commerce city," said Lou Guohua, Party secretary of Yiwu.

He said Yiwu will try to become an international centre for small commodities logistics, manufacturing, research and development.

The prosperity of the Yiwu market not only benefits local businessmen, but also people in other countries, he said.

Many international small and medium-sized enterprises can make profits by processing and trading Yiwu products at reasonable prices and high quality, which means more jobs will be created.

The Yiwu market will not only be a stage for Chinese products, but also for international commodities.

"Products from 20 countries are now traded in Yiwu and more are coming," he said.

Lou said the Yiwu market is aimed at gathering products from around the world, not only Chinese products.

"We are planning to set up the biggest supermarket in the world and establish an international shopping paradise," Lou said.

The blueprint has been drafted and the international commerce city is taking shape.

Yiwu has finished infrastructure construction for a commerce centre to complete the second phase of construction of the Yiwu International Commerce and Trade City which is to start operation on Friday.

Covering 1.2 million square metres, the mall will become the world's largest wholesale market for small commodities with 23,000 booths.

The first-phase construction of the mall was finished in 2002 as the city's original wholesale market was bursting out of its walls.

Booths in the mall can quickly perceive changes taking place in the international business world and weave a business network linking all parts of the world.

Credit construction

Besides infrastructure construction, the city is paying more attention to credit and quality control.

Ever since the start of the market 20 year ago, Lou said, Yiwu has been sparing no efforts to build up the credibility and crackdown on fake products.

"We know that the prosperity of the market heavily relies on credibility," he said, "Quality control and credibility establishment is key for Yiwu to be integrated with the world."

Strict standards for market access have been made to ensure only qualified products can be traded in the market.

Vendors are taught to pay great attention to their operation credit and product quality. They have been told they would ruin their business opportunities if they have damaged the reputation of the Yiwu market.

The local government has made a blacklist for any violators and vendors will be kicked out if they are found selling fake or pirated products.

The market has built up a business environment in which "being faithful is being honorable."

The efforts have paid off as good reputations have been established among foreign merchants.

"One thing I like here is that people are very honest and hard-working, especially the independent business people," said Khan of Cana Imports which has been a leading wholesale distributor for over 17 years in Canada, "They will fulfill their promise."

Challenges

But challenges still exist on the way to Yiwu's dream with an increase in international trade barriers.

Yiwu enterprises are threatened by anti-dumping charges which could occur anywhere in the world on any products.

The Yiwu-based Zhejiang Mengna Knitting Co Ltd, a major sock exporter, is one of them as the United States is on the way to imposing quota limits on Chinese sock exports.

The US textile industry petitioned the Bush administration in July to curb the import of socks from China. The US Department of Commerce has been conducting an investigation and a final decision is expected to be made later this year.

Lu Sanhao, executive vice-president of Mengna, which has a large exposure to the US market, said the company is closely watching the appeal.

"The US trade limits will cut our total exports by one third as the United States is our largest overseas market," said Lu.

He said the company never competes with unreasonably low prices. Instead, export deals have been made because of the company's timely deliveries, high quality and good service.

Although the company will not collapse if the US limit is applied, it is planning to make more efforts to tap other international markets and expand domestic sales.

To make their international trade smoother, the company is also trying to pass accountability certification.

Social Accountability 8000 is a set of voluntary labour standards initiated by the US-based Social Accountability International (SAI) in 1997, which ensures that retailers, brand companies, suppliers and other organizations maintain just and decent working conditions throughout the supply chain. More Chinese firms are told by their European and US clients they should meet these criteria before they can will conduct business.

Lou said the local government has been telling local vendors and enterprises to enter the international market by abiding by the rules of the World Trade Organizations (WTO).

Local businessmen are invited to attend classes about WTO rules, commercial English and Internet use with all costs covered by the government.

But Lou said if any antidumping cases occurred, the government will unite the industry associations and enterprises to respond to the appeal.

"We believe the government will take some measure to protect our interests," said Lu.

(China Daily October 19, 2004)