From obscurity to global prominence — Yiwu's emergence as an international trade hub

As just a county level city in China, Yiwu's rise to global renown is a compelling story. Despite its antiquity, its rise dates largely from market liberalization in 1978. Leveraging its traditional role as a petty market center, it relied on an early start and subsequent agglomeration economies to grow these markets. The demand for goods in these markets begot manufacturing of these goods, creating backward linkages. The growth of these markets led to its unique version of internationalization — “shopping tourism” and as a venue for conventions. This pattern of growth, dubbed the “Yiwu model” is distinctive in that it relied on home-grown small trading enterprises, as opposed to the better-known model of large firms — foreign investment nexus found in export zones. Also distinctive is the strong role played by the Yiwu government working hand-in-glove with private entrepreneurs to seize opportunities and overcome challenges. This partnership will need to overcome challenges that come with this model of growth. •Yiwu is a small city that achieved national and global prominence through its markets.•Its growth has been driven by economies achieved by expanding local petty trading of low-price products yielding low margins.•Market expansion has led to manufacturing (backward) and exports (forward) with efficient logistics and supply chain support.•The proactive role of government in collaboration with private entrepreneurs is an integral part of this “Yiwu model”.•This collaboration has hitherto successfully seized opportunities but will also confront challenges going forward.