How is Yiwu's foreign trade frontline in Zhejiang responding to the changing Middle East situation?

Ask AI · How can the diversification strategies of Yiwu merchants mitigate Middle East geopolitical risks?

China News Service Yiwu, March 30 — (Chai Yanfei and Dong Yixin) “The Strait of Hormuz may be the most optimal route in the Middle East, but it is not the only one. Experienced people know that doing business ‘cannot rely on one route.’”

Regarding the recent fluctuations in Middle East tensions, Sheng Weiguo, who has been mainly engaged in sea freight agency business in Yiwu for over a decade, said.

Currently, the ongoing conflict between the US, Israel, and Iran continues to disrupt the Strait of Hormuz, causing a sharp decline in navigation through this “throat.” Thousands of miles away, the “World Small Commodities Capital” Yiwu has already felt the change—how should local foreign trade practitioners respond?

March 6, a scene from Yiwu market. Photo by Dong Yixin

The Wind from the Strait of Hormuz Reaches Yiwu

“From what I understand, the short-term supply and demand for many foreign trade products are not tight. Currently, our orders in the Middle East are still proceeding as usual, same as in previous years.”

Talking about the recent turbulence in the Strait of Hormuz, Yiwu merchant Cheng Sheng remains “calm,” but quickly adds, “Now, there are too many changes; we need to do business with ‘full alert.’”

Having fought in the market for over ten years, Cheng Sheng has many Middle Eastern clients. The earliest direct contact between Yiwu market and Middle Eastern traders can be traced back to the 1990s. Over decades, both sides have maintained close relations, with trade volume rising steadily.

In 2025, Yiwu’s exports to the Middle East reached 109.37 billion yuan(, accounting for about 15% of the city’s total exports during the same period. When the wind from the Strait of Hormuz blows into Yiwu, ripples appear in the business sea—many merchants, like Cheng Sheng, have felt the fluctuations.

Cheng Sheng admits that compared to order volume, the more immediate pressure comes from rising raw material prices. His business mainly involves downstream petrochemical products. As global oil prices “soar,” the cost of raw plastics has increased, and related products are passively entering a price adjustment period.

“Average increase is about 15%.” Cheng Sheng says. On one hand, he is optimizing production processes to further reduce losses; on the other, he is negotiating with some clients who are not in a rush to take delivery to delay shipments, sharing the short-term pressure and ensuring profit margins for both sides.

A merchant specializing in maternal and infant products, Ke Jinsong, straightforwardly states that demand in the Middle East is still there, and the market is “not cold.” His shop, in particular, has been producing and shipping to Middle Eastern clients normally, with business even better than the same period last year.

“Because we have built our brand, customer loyalty is stronger.” Ke Jinsong explains. He also reveals that current pressures mainly come from transportation—although cross-border e-commerce shipping costs have increased by about 10%, he has increased shipment frequency to meet demand promptly. Currently, sea freight times are slowing down, which makes him anxious.

Of course, including Cheng Sheng and Ke Jinsong, Yiwu merchants are inherently optimistic. The reason is that the market entities here never “put all eggs in one basket.”

Data shows that in the first two months of this year, Yiwu’s total import and export value reached 173.56 billion yuan, a year-on-year increase of 52.8%; Yiwu engaged in trade with 222 countries and regions worldwide, an increase of 9 compared to the same period last year.

Up to now, Yiwu’s market has gathered over 2.1 million types of goods, exported to more than 230 countries and regions worldwide, with over 30k foreign residents—“buy globally, sell globally,” not just focusing on a single market. This scale effect provides resilience and confidence for merchants.

March 6, a container truck loaded with export goods enters Yiwu Railway Port. Photo by Dong Yixin

Doing Business ‘Cannot Rely on One Route’

The premise of market diversification is the continuous expansion and solidification of logistics and supply chains.

“Many logistics companies, including Chinese ones, have established offices in the Middle East and hired local staff in recent years, to facilitate local fleet deployment and quickly grasp local situations.”

Upholding the idea that “doing business ‘cannot rely on one route,’” Sheng Weiguo laments that localization strategies have helped many companies better understand the trend and respond more calmly to the current uncertainties in the Strait of Hormuz.

In his view, international logistics participants should learn to reduce dependence on the Strait of Hormuz. In fact, recently, Yiwu foreign trade practitioners have been trying to hedge risks caused by changes in key routes through diversified logistics solutions such as railways, land nodes, and transshipment via third countries. Amidst route blockages, fluctuating freight rates, and uncertain transit times, they seek a balance between “faster transportation” and “lower costs.”

Sha Zhiqiang, head of a Yiwu freight forwarding company engaged in import and export trade with Iran for over ten years, said that he and his colleagues have been “doing math every day”—“everyone is constantly calculating the optimal logistics solutions under the premise of ensuring safety.”

The answer to this “math problem” is gradually tilting toward land routes—currently, there are 26 China-Europe train lines departing from Zhejiang, connecting over 160 cities, providing multiple options for foreign trade personnel to “walk on multiple legs.”

“This year, many customers proactively inquired about routes and transit times, and there are many new orders.” Chen Bin, staff at Yiwu Yitong Europe Logistics Co., Ltd., which mainly handles China-Europe train services, said that the company’s monthly shipment volume is close to capacity, requiring further coordination of transportation capacity.

In the face of shipping uncertainties, China-Europe trains, with their stable routes and less impact from geopolitical conflicts, have become an important alternative for some shippers to replace sea freight, especially for goods requiring timely delivery and higher added value.

It is reported that as early as July 2024, the China-Europe train from Kum, Iran, to Yiwu achieved full bilateral operation by rail. Compared to the often more than a month-long sea shipping cycle, this route takes about 15 days for the entire logistics process.

Under the multi-path parallel transportation system, Yiwu is gradually building a three-dimensional logistics network covering sea, rail, and land, providing a more resilient “stabilizer” for the foreign trade supply chain, and giving stronger support to the principle that “cannot rely on one route.”

February 28, Yiwu, Zhejiang—foreign and domestic merchants chat in front of shops with multilingual digital assistants to learn about the market and products. Photo by Dong Yixin

Balancing Interests and Certainty in a Changing World

If responding to the “cough” of the Strait of Hormuz requires global foreign trade practitioners to “prescribe medicine,” then Chinese market entities like Yiwu merchants, besides “prescribing” diversified market layouts and strengthening logistics and supply chain stability, also offer the “patent medicine” of balancing interests and benefits to overcome difficulties together.

The reason is simple: in Yiwu’s commercial culture, balancing interests and benefits is a deeply ingrained gene. Sharing risks to forge new paths, and building trust through mutual benefit, is the “art of balance” many Yiwu merchants use when faced with dilemmas between righteousness and profit.

Recently, Liu Weida, head of an import-export company mainly engaged in cross-border e-commerce from Yiwu to Saudi Arabia, faced such a dilemma. Due to shipping disruptions increasing logistics costs, profit margins have been squeezed, but he still chose to share the pressure with his clients—short-term discounts may reduce profits, but maintaining stable client relationships and long-term cooperation are more important than short-term gains.

His choice is not unique. During visits, many Yiwu foreign trade practitioners have shown a more proactive attitude in facing current challenges—“advancing and retreating with clients.”

“People in foreign trade must have strong resilience. The world changes rapidly, and the most important thing is to maintain credibility.” Zhou Lingling, a Yiwu merchant specializing in toys, said in an interview. Having been in foreign trade for many years, she has seen many storms, and the trust built with foreign clients over the years is her most valued “product.”

Last December, her company received an order from Iran. The goods are already produced, but she has not yet received a shipping notice.

Zhou Lingling suggested that if the client wants to delay shipment, she would store the goods in her company’s warehouse first. If the client later cannot receive the goods, she would help resell them. “There’s always a way to solve it.” She said while flipping through chat records with the Iranian client.

According to the chat, the foreign merchant said he was temporarily residing in Dubai, communication was stable, personal safety was not a concern, and he inquired about popular products recently, expressing willingness to place an order. After carefully checking his and his family’s safety, she enthusiastically introduced her shop’s hot-selling products and offered special discounts for loyal customers.

“Our relationship with clients is not just business; after so many years, we’ve become friends.” Zhou Lingling said.

Not only in Yiwu, but in Zhejiang, a major foreign trade province, such stories are countless.

For example, amid ongoing tensions in the Middle East, international shipping giants generally raised freight rates. However, a private shipping company in Ningbo, Zhejiang, made a different choice: all in-transit orders would not incur any additional charges. It’s worth noting that following the price increase trend, the company could easily earn millions of dollars. “As a Chinese company, we value the spirit of contracts most. Money can be earned endlessly, but at this critical moment, the company’s reputation and credibility are even more precious,” said Zhu Chuanshu, the company’s leader.

Supported by diversified markets and stable supply chains, Zhejiang foreign trade practitioners still demonstrate certainty in the face of external uncertainties—data shows that in 2025, Zhejiang’s foreign trade will maintain positive growth for ten consecutive years, with exports reaching new highs and surpassing 4 trillion yuan annually.

Every day, many foreign merchants come with demands, inspecting samples and negotiating orders. Zhejiang’s foreign trade practitioners are continuously building new client relationships and maintaining old ones. This vitality and resilience from the front line of trade continue to gather, showcasing China’s foreign trade steady and far-reaching. )End(