Yiwu International Trade City looks like a series of giant shopping malls from the outside. Inside, it is a wholesale wonderland, with thousands of suppliers from across China showing off wares for export, from accessories and toys to artificial intelligence glasses and industrial robots.
The ever-expanding facility in the eastern city of Yiwu, already considered the world’s largest wholesale marketplace, illustrates how China is revving up its export engine despite US tariffs and other simmering tensions over its swelling global trade surplus.
A visit to Yiwu early last month underscored that destination diversification is the new name of the game. The city is known as a major supplier of Christmas trees and lights, yet these festive decorations were few and far between. Many merchants displayed their business names in Arabic, in addition to Chinese and English, and showcased products aimed at the Middle Eastern market.
An employee of a cosmetics company with factories in Yiwu and Guangzhou said perfumes that wholesale buyers snap up for about RMB 30 (USD 4.2) per bottle were popular, adding, “Our main customers are from the Middle East.”
Geographical diversification has played a crucial role in maintaining export growth while a trade war with the US casts uncertainty over bilateral commerce. US President Donald Trump ramped up the effective tariff rate on Chinese goods to over 50%, before agreeing to lower it by ten percentage points under a truce agreed to with counterpart Xi Jinping in South Korea in late October last year.
Trade with the US has declined month after month, even after the truce. But overall shipments in November rose 5.9% year-on-year, rebounding from an unexpected 1.1% drop in October and pushing China’s annual trade surplus with the world above USD 1 trillion for the first time.
A representative of a clothing materials seller in Yiwu had a table covered in sheets of paper with Arabic translations of phrases like, “Is cardboard packaging OK?” And, “Good quality is expensive.” China Commodities City Group, the state-owned operator of Yiwu International Trade City, has been organizing free Arabic language classes for workers since last year, according to Chinese media.
The complex also features products considered strategic growth areas by Beijing, from Chinese cartoon characters to industrial drones. A seller of plush dolls said the goods of Nailoong, a yellow dragon character designed by a Chinese company, are selling well in Southeast Asia.
Advertisements promoting Yiwu’s new Global Digital Trade Center, which locals simply call the sixth district, were splashed across the city’s main high-speed railway station. While customers were sparse on a recent weekday, construction work on new stores was ongoing, and Zhejiang China Commodities City Group has already laid out further expansion plans.
In November, the group said it acquired development rights for a nearby plot of land for RMB 3.2 billion (USD 448 million), with an area spanning 660,000 square meters marked for construction over three to four years.
The company has also developed ancillary services like Yiwu Pay, a cross-border payment service that it said facilitated RMB 27 billion (USD 3.8 billion) in transfers in the first nine months of 2025, up 35% on the year.
Still, even as some Chinese exporters find new markets in the Middle East, Southeast Asia, Europe, and elsewhere, many cannot afford to lose the vast US market as weak sentiment sets in at home, fueling brutal price wars. The prospect of a US Supreme Court ruling that could strike down much of Trump’s tariff program offers little solace for now.
One area where US tariffs loom large is China’s southern aluminum hub, which has been hit by a prolonged property downturn that has stifled construction activity.
Known as “Aluminum City,” Foshan is home to scores of companies that produce aluminum window frames, which are made by cutting aluminum bars into various lengths and then assembling them mostly by hand.
The industry has been rocked by news of manufacturers facing financial difficulties. The office of one, Weiyasen Door and Window, was closed on a weekday afternoon in October 2025. Its nearby factory was also cleared out. Manufacturing equipment was seized by the local government, which plans to sell it to compensate employees who lost their jobs, according to local media reports and industry sources.
Home sales in China have plummeted over the past few years, due to slowing economic growth and tighter restrictions on property developers’ debt-fueled expansion. Despite a wave of policies aimed at supporting the market, such as mortgage rate cuts and relaxed rules on homebuying, sales in the first nine months of this year came to RMB 5.5 trillion (USD 770 billion), according to government statistics, about half the same period in 2020.
Fewer new homes means reduced sales of Foshan’s windows, increasing the importance of overseas markets. But an employee at another window maker in Foshan, who requested anonymity, said Trump’s tariffs on Chinese goods have created serious headwinds.
“Since our prices are no longer competitive, some of our US clients switched to domestic alternatives,” the person said. The company is now marketing to Southeast Asia, but it would need to adjust its products to cater to the region. “Southeast Asian clients always ask for lower prices, while US customers demand higher quality.”
The person said Trump’s tariff cut in November 2025 has done little to revive US orders, although business is typically slow during the holiday season in December.
Benjamin Cavender, managing director at China Market Research Group, said the impact of US tariffs depends on the type and size of the product, as the price upon which they are typically calculated reflects the factory door price as well as the shipping cost. “Window frames could be impacted more by tariffs than items like high-end consumer electronics because they take up more space,” he said, adding that the furniture industry has similarly been hit hard.
Across China, the property market downturn and doubts over the export outlook have both been blamed for an unusual 1.7% year-on-year drop in fixed asset investment for the January-October 2025 period. Unlike the sharp downturn in 2022, when the Covid-19 pandemic temporarily disrupted economic activity, “the current slump is broad-based and has accelerated notably since July [2025],” Mizuho Securities senior China economist Serena Zhou wrote in a note in mid-November.
In Foshan, officials are racing to lure other types of enterprises, such as electric vehicle frame makers and battery packaging companies, in hopes of upgrading the city’s industrial base rather than risk being left hollowed out. Advertisements for factories were posted on a bulletin board near the shuttered Weiyasen facility. Factory space in the city was going for RMB 0.43 (USD 0.06) per square meter per day in November, down from RMB 0.62 (USD 0.09) in 2022, according to property site 58.com.
But while some exporters are struggling to adapt to the new era, China’s overall trade performance has eased concerns about an economic slowdown and made a case for staying the course.
“The rebound of export growth in November helps to mitigate the weak domestic demand,” Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, wrote in a note. “It seems the economy is on track to deliver around 5% growth this year, in line with the government’s target.”
The momentum, however, could stoke friction with governments besides the US, from Southeast Asia to Europe to Latin America. “Let me be very blunt. China is not fair in its contribution to the world economy. It’s exporting and not importing,” Samy Chaar, chief economist at Swiss private bank Lombard Odier, said at a briefing on December 11. Given weak domestic demand, he said, “China is trying access demand where it can find it. … The rest of the world is trying to shield itself from the Chinese ogre in terms of production and exports.”
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.