The United States and Israel have jointly launched military strikes against Iran, resulting in the decapitation of Iran’s supreme leader and several top Iranian officials, followed by Iran initiating retaliatory actions, causing a sudden escalation in the Middle East situation. Thousands of kilometers away, Yiwu City in Zhejiang Province, known as the “World’s Capital of Small Commodities,” also felt the tremors of war.
As the location of the world’s largest small commodity wholesale market, Yiwu has maintained close trade relations with regions such as the Middle East and South America. The impact of foreign wars on local businesses in Yiwu is reflected in stagnant orders, damaged goods, lost contact with customers, and even deaths.
According to a report by “Nanfeng Window” on March 4, Gong Yongqiang, a merchant operating Christmas supplies and artificial plants at Yiwu International Trade City, stated that in the immediate aftermath of the outbreak of war, there was no apparent change in business on the surface.
However, the instability in the Middle East has long been affecting the market. Over the past few years, customers from the Middle East have been placing orders more cautiously, resulting in a significant decrease in quantity.
Gong Yongqiang and his family have been engaged in foreign trade for over forty years. Before 2019, Middle Eastern customers accounted for about 25% to 30% of their business, and the annual sales of artificial plants reached as high as 45 million yuan. Now, the proportion of Middle Eastern customers has decreased by about 7% to 8%, and the order size has significantly reduced.
There is a saying among Yiwu merchants: “Customers are like dragons, while without them means poverty.” The heavy reliance on overseas customers forces local businesses to closely monitor international situations.
The losses brought about by war are not just abstract concepts. Gong Yongqiang recalled that a few years ago, goods that had just arrived at a port were destroyed by shelling in a conflict in the Middle East. Although, according to trade rules, the responsibility for the goods no longer rested with the merchant after they crossed the sea, to maintain the relationship with long-term clients, he still bore some of the losses, totaling tens of thousands of yuan.
More extreme situations have also occurred. Over a decade ago, one of his Iranian clients, after receiving the goods but before paying the final installment, was killed at home by a shell. Such news was only relayed through intermediaries.
In times of war, communications, logistics, and even lives can suddenly be disrupted.
Lin Ying, a shop owner who has been in business in Yiwu for 24 years, has also felt similar impacts. Her factory mainly produces festive items and thermos cups, with Middle Eastern customers accounting for about 40%.
Before the Lunar New Year, a customer from Dubai placed an order worth nearly 5 million yuan, and she had planned to ship the goods after the factory resumed production. However, after the outbreak of the war, the customer suddenly became unresponsive.
Lin Ying lamented that in a war environment, people often first give up on festive and decorative items.
Yiwu is one of the world’s largest production bases for Christmas items. According to official reports, over 20,000 types of Christmas products exported from Yiwu account for approximately 80% of the global market. However, since 2024, the export volume of Lin Ying’s festive items has significantly declined, with some small customers even disappearing completely.
While in the past, one customer might order six containers a year, now they only order two to three.
In contrast, the demand for daily items like thermos cups remains relatively stable. However, in recent years, orders have continued to decrease, far below the levels of over a decade ago.
Lin Ying first deeply experienced the impact of international conflicts on her business during the Russia-Ukraine war outbreak.
After the war started in 2022, her orders quickly halved, and some long-term cooperative clients suddenly vanished. As old clients usually did not need to pay a deposit, the factory had prepared raw materials in advance, but faced order cancellations, resulting in the largest loss reaching 4 to 5 million yuan.
Similar impacts were also seen during the COVID-19 pandemic. At that time, foreign trade nearly came to a standstill, with factories halted but still needing to pay basic wages to workers.
Before 2019, Lin Ying’s factory had 120 workers, but now there are only over 50.
Yiwu exports about 80% of its goods overseas, making it one of the places in China most directly affected by global economic changes. The continuous regional conflicts in recent years have made trade relations more cautious. To reduce risks, some merchants have started to require old clients to pay deposits, or even switched to cash transactions.
After the outbreak of the Iran war, Lin Ying took the initiative to contact her Iranian clients to inquire about their safety.
Hu Xin, who has been operating a store in Yiwu for over twenty years, did not pay much attention to understanding the war, but she knew that the distant gunfire had a significant impact on her.
Hu Xin’s handicrafts mainly sell to South America and the Middle East. Before the 2026 Lunar New Year, clients from the Middle East placed orders totaling over 5 million yuan at her store, the majority of whom were long-time patrons. Despite planning to arrange shipments in April or May after the holiday, the current situation is worrisome.
“Now the situation is very bad, they are worried themselves,” Hu Xin faintly feels the changing circumstances, “For those who haven’t arranged for the goods to be shipped so soon, we’ll wait a bit longer.”