The US has imposed a 145% tariff increase, yet Yiwu's exports have still risen by 25%: The world still can't do without it.
In the first quarter of 2026, the total value of Yiwu's imports and exports exceeded 200 billion yuan, a year-on-year increase of 25%. Exports to ASEAN increased by 68.3%, and exports to Africa increased by 47.3%. (Source: Sina Finance)
When these figures came out, the high tariffs between China and the United States had not been removed.
Logically speaking, Yiwu should be one of the most directly affected victims of the tariffs. Yiwu's exports are mainly small commodities, and the United States used to be its core market. However, data shows that in 2025, when tariffs continued to increase, Yiwu's exports to the United States still reached 138.75 billion yuan, a growth of 11.2%. (Source: Sing Tao Headline)
Many media attribute this to Yiwu's market diversification: shifting US orders to ASEAN, Africa, and the Middle East, and adopting a multi-pronged approach.
This explanation is correct, but it is not enough.
I think what is most noteworthy this time is not how quickly Yiwu switched its markets, but rather: Why, against the backdrop of continuously intensifying global trade frictions, is Yiwu still an irreplaceable supply source for global buyers?
In other words: What exactly is Yiwu's moat?
Many people's first reaction is: Of course, it's the price. Chinese-made products are cheap, and Yiwu's small commodities are even cheaper.
Actually, that's not the case.
As usual, I'll try to clarify this issue for you in an article. The full text is about 3,000 words and is expected to take 8 minutes to read.
Price is the ticket, not the moat
In a sociological survey by The Paper, there is a detail worth noting. In the 1990s, when Chinese small commodities first entered the Middle Eastern market on a large scale, the first reaction of local buyers was not that they were cheap. Instead, compared with Indian and Iranian goods, Chinese goods were much cheaper. (Source: The Paper)
This shows that the price advantage is the entry ticket for Yiwu to enter the global market, not the reason for it to stay.
Over the past three decades, batch after batch of emerging manufacturing regions have emerged. India, Vietnam, Bangladesh, and Ethiopia have lower and lower labor costs. However, Yiwu has not been replaced and has even continued to grow.
If the moat were really just the price, Yiwu would have been defeated by competitors with lower prices long ago.
What Yiwu really sells is a one-stop solution
The Yiwu International Trade City has 75,000 stalls, covering an area of 6.4 million square meters, with more than 2.1 million types of commodities. (Source: Yicai Global) These figures may not seem impressive on their own, but when converted into procurement efficiency, you can understand where Yiwu's core competitiveness lies.
Suppose a buyer from the Middle East has a procurement list that includes Christmas decorations, plastic storage boxes, artificial flowers, LED light strings, disposable tableware, stationery sets, and several types of children's toys. In the Yiwu International Trade City, this entire list can be completed within one day, including negotiating prices, viewing samples, confirming the minimum order quantity, and discussing the delivery date.
Try this in another city. Surat in India is good at textiles, Binh Duong Province in Vietnam is good at wood products and furniture, and Dhaka in Bangladesh is good at clothing. These places can offer you low prices, but they can't provide you with that entire list. You would have to visit three countries and five cities to complete the procurement task that Yiwu can finish in one day.
This is why I call Yiwu's moat "embedded supply".
So-called embedded supply means that a supply source provides not just a single product, but a complete procurement solution: price comparison, product selection, sampling, order placement, goods allocation, and logistics, all completed within the same physical space. This kind of agglomeration efficiency cannot be replaced by the price advantage of any single product.
A survey of Yiwu by The Paper directly pointed out this logic: Yiwu's real core competitiveness lies in its extremely flexible and efficient supply chain network behind it. This concentration of information and resources cannot be physically replaced by any online platform. (Source: The Paper)
What Yiwu sells is not a single product, but a complete procurement solution. This is the essence of embedded supply.
Why can't tariffs defeat this model?
Now let's go back to the original question: With such high tariffs, why is Yiwu still growing?
The moat of embedded supply has a natural resistance to tariffs. To replace Yiwu, one doesn't just need to find a cheaper city, but to rebuild a supply chain system with the same agglomeration efficiency on a global scale. This can't be achieved without more than a decade of accumulation.
Yiwu's way of dealing with tariffs also happens to verify this logic. In 2025, Yiwu quickly switched its target markets: exports to ASEAN increased by 68.3%, exports to Africa increased by 47.3%, and exports to countries along the Belt and Road accounted for more than 70% of total exports. (Source: Sina Finance)
The reason why this switching speed can be so fast is that Yiwu's infrastructure is universal, not customized for a specific market. With 75,000 stalls, a complete container consolidation system, and perfect freight forwarding and foreign exchange settlement services, when American customers stop coming, customers from the Middle East, Africa, and Southeast Asia can seamlessly take their place.
This is not just a simple diversification strategy. It is a supply chain system with the ability to turn in terms of structure.
Can India and Vietnam replicate Yiwu?
This is a frequently discussed question and also the most direct test question for understanding Yiwu's moat.
India and Vietnam are indeed taking over some orders transferred from China, especially labor-intensive products such as clothing, shoes and hats, and electronic assembly products. However, the moat of embedded supply has a precondition: the breadth of product categories.
Yiwu has more than 2.1 million types of products. This breadth was not built in one or two decades, but naturally developed over 40 years by the merchants in 75,000 stalls through market competition. Behind each stall, there is one or more complete supply chains extending to the surrounding production counties and cities.
The number of product categories that Indian and Vietnamese manufacturing can currently offer is only a fraction of Yiwu's. They can be substitutes for some categories in Yiwu, but they cannot replace Yiwu.
Language is the capillary of this system
Now we can understand why the shopkeepers in Yiwu are learning foreign languages.
The moat of embedded supply needs people to maintain it. In Yiwu's 75,000 stalls, what really makes global buyers come back again and again is the shopkeeper behind the stall who can directly negotiate the cost price, minimum order quantity, and delivery date with you. Translation software can do text translation, but it can't conduct negotiations.
Zhang Li, the deputy general manager of the Human Resources Center of the Yiwu Market Group, once said that the goal of the English training camp is for merchants to be able to use it on the day they receive an order. It's not about being fluent, but about closing the deal. (Source: China News Service)
This is highly consistent with Yiwu's entire business logic: all investments are aimed at the same result, which is to solve the buyers' needs faster and more completely.
What can you take away?
Using the framework in this article, you can evaluate the supply competitiveness of any market or city. I summarize it into three judgment dimensions for the moat of embedded supply:
In 2025, the rental rate of shops in the Yiwu Small Commodity Market reached 96.83%, and the transfer price of the secondary shop market continued to rise. (Source: The Paper) This is probably the best answer to the question of whether Yiwu's moat really exists.