China’s trade shifts away from U.S., even in Yiwu

This report brings you insight and analysis from this week’s CNBC’s The China Connection bulletin about what directs the world’s second largest economy.

Three young men who ate the lollipops joined the elevator of the five -storey Yiwu “International Commercial Market”. The majority of the Christmas of the world Decorations.

The kids are over before I get off. Only the days of the summer holiday in China, when I visited one of the world’s largest wholesale markets in late August, had more children than buyers. Lego pieces are scattered in the entrances of the store, while the escalators stopped – the signs are “for the safety of children”, he said.

Whether one morning or afternoon, the legendary Yiwu market, which was famous as the “supermarket of the world”, was unexpectedly silent.

Was the US-China trade war accused?

Li, a vendor consisting of sponge and cleaning materials, claimed that it is not the most intense season for foreign buyers and that its customers came from Middle East and Southeast Asia.

Li refused to share his full name, said that the effect of tariffs was not great. However, he implied that the factories in Guangdong in the Ev state were more difficult.

Yiwu repeated the silence I encountered during my visit. None of the other businesses up to dozen I talked about did not agree to interview.

However, it was clear that customer bases changed. I saw more signs in Arabic and sometimes Korean or Russian instead of the usual English and Chinese. Large areas from the scarf selling a floor are focused on the headscarf or headscarf.

Ashish Monga, the founder and CEO of the commercial company IMEX Sourcing Services, said that exports from Yiwu to the United States fell from approximately 20% to 20% and are now even lower.

The decline of Yiwu’s exports to the United States reflects a national decline. While China’s exports to the US decreased by 12% throughout the year, 10 largest economies According to the CNBC analysis of the official data accessed through the wind information database, it increased by 13% in the Middle East in the same period.

Monga, Monga limits how much businesses can sell to Europe, since many of Yiwu’s products do not meet EU compliance standards. On the other hand, the demand from Latin America has grown so much that YiWu officials supported the Spanish classes for local traders.

But this is not just a matter of changing the orders to us.

“If you lose a large customer in the US, you need about five in developing markets to make the same margin.” He said. “More work for less money.”

The total value of China’s exports to the United States is $ 251.4 million, which is much larger than $ 116.5 million to the Middle East as of July this year. Beijing, according to official data, has increased its posts to China’s largest regional trade partner, Europe and Southeast Asia. Until July, China exports to Africa increased by 24% compared to a year ago.

“Some [the shift in Yiwu customers] first of the evening [U.S.-China] Trade War. People do not want to go to the states, “says Course -based Senior Partner Cameron Johnson, a consulting company Tidalwave Solutions.

“This year, it is definitely clear that suppliers turn to new, non -US markets.– Especially on scale, because they are more stable, although they are in more slow growth rates, “he said.

Getting away from the USA

There are very few signs that Yiwu traders will soon find it attractive to sell to the USA.

Negotiators from the US and China met this week for the latest trade talks in Madrid. However, instead of announcement of progress in the tariffs, both sides emphasized a “frame” agreement on the removal of Tiktok from Beijing -based parent Baytan. US President Donald Trump said it was his Ready to talk To complete the details on Friday with Chinese President Xi Jinping.

For businesses, Roughly 55% Tariffs in most Chinese goods of the United States are far above 25% of Trump’s first period. Before the second opening in January, many US companies increased orders to prevent increasing tariffs.

This front installation helped to support China’s exports and came out of a Christmas crisis.

A Costco Retail store in the USA already sold his holiday decorations when he visited Johnson of Tidalwave Solutions at the weekend. “The only reason he did this was that he had bought it a few months ago,” he said.

However, planning can only go so far. US businesses are expected to increase the prices significantly within a few months.

In addition, new wages affecting the Chinese cargo ships coming to the USA, even if they do not belong to China, will begin to start on October 14-accusations of the challenge potentially millions of US dollars.

For the Chinese supplier who encounters increasing uncertainties, touching a different market can be a safer bet.

Treasury Secretary Scott Bessent, Details of the US-China framework agreement Tiktok, the next FED President’s search, President Trump’s tariff agenda and more to discuss the “Squawk Box” joined.

David Li, CEO of China, the world’s leading Lidar supplier, said that US tariffs are the cost of doing business and that the burden of this additional cost is a ‘negotiation’ as the information and regulations change.

Cliff Zhang, CEO of the alternative investment company Templewater, announced why Chinese companies want to expand to the Gulf Cooperation Council countries.

Nvidia probe is dragged. In a statement on Monday, Beijing said that the US chip producer violated the China-Monopoly law among the high-level US-China negotiations in Madrid. The investigation will continue.

Turmoil on processed food. Last week, an internet vowel restaurant is expensive, after criticizing it for selling pre -made dishes, quickly deliberate chain Xibei in hot water. The company’s first The answer disturbed many consumers It also reveals that industrial standards for processed foods are more loose than many consumers believe.

Mainland China’s CSI 300 increased by 0.47%, while Hong Kong’s SenG Index Index Local at 11:15% increased by 1.16%. . Hanging Seng Tech The index increased by 2.89%.

End of September: US home deputies Visit Beijing Since 2019 on his first official travels