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Find it in Yiwu

By China Daily (China Daily)
Updated: 2008-06-30 15:36

As one of the witnesses and participants in Yiwu's market reform and opening-up, Zhang Zhongnian, who worked in the local government during the 1980s, still recalls remarks by the Yiwu county party chief Xie Gaohua: "We should give full support to farmers conducting business during the slack season and I will assume responsibility and resign if anything happens".

Without Xie, Yiwu, located in the eastern corner of Zhejiang province, might have remained an impoverished county as many other remote areas in China, rather than becoming the world's largest small commodities markets with a trade turnover of over 40 billion yuan per year.

With 65,000 booths in 20 different classified markets, if you drop by a booth for three minutes it takes a year to look around all the booths in Yiwu. People say there is nothing money can't buy in Yiwu. Even supermarket giant Carrefour and the United Nations are Yiwu's customers.

But three decades ago, Yiwu was a populous area of 1,105 sq km with insufficient farmland and weak basic industries. People had to seek out other ways to make ends meet.

Bartering business

The Yiwu brown sugar factory was the biggest factory in the county, Zhang says.

Because brown sugar was a local specialty, one of the ways to make money was to barter brown sugar made during slow economic times, while banging a small drum to attract attention. That practice had lasted 300 years before it was banned after the founding of the People's Republic of China as a "capitalist practice".

The deadlock was broken after the country embraced new economic practices at the urging of then-leader Deng Xiaoping in 1978.

Farmers in Yiwu resumed the old bartering practice but soon found a marketplace was needed to make bigger and better businesses.

In the 1980s, a small town near Yiwu called Nianshili was used as an open-air market for trading and bartering.

People usually carried two buckets of small goods on a bamboo shoulder pole. At that time the possibility was still high that government officials who had not fully embraced the free market concept could confiscate their goods.

Traders carried buckets so that they could escape as soon as possible with all belongings.

Two years later, the game of cat and mouse was over, thanks to a woman named Feng Aiqian.

After local inspectors confiscated her goods, Feng was so outraged that she went to the government building to complain.

"I didn't know where my courage came from. The 'cultural revolution' (1966-76) had ended not many years ago and people at that time still had a harsh memory of class struggle. I could have been put into prison," Feng, now 67, recalls.

"But I couldn't help speaking out. I told the county party chief Xie Gaohua with tears that we couldn't make a living by farming and I wanted to do business."

Xie promised he would discuss it with other officials, and started an investigation. Several months later, Xie found farmers could benefit from doing business during the slack season and it wouldn't affect the local agricultural production.

Since then, Yiwu government has given full support to local entrepreneurs. And that made it one of the boldest local governments committed to the market economy.

In 1982, the Yiwu government provided the first legal open-air market with 700 booths. That was the embryo of what is now the Yiwu small commodities city that has expanded to more than 20 markets with 65,000 booths.

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