Trade News: On China – Mega Trade Mart, City “Tiers” & More

From (MSU) globalEDGE – Your Source for Global Business Knowledge:

• The New Silk Road: In 1982, China was just beginning to open up to capitalism when the government decided to use a plot of land in a rural town of Yiwu as an open-air market. What started off as a rural, poor city has turned into a vibrant Trade Mart which now covers 988 acres. To put this into perspective, you could fit 10 Mall of Americas in the same space.  This Trade Mart opened up in 2002 and since then has expanded 3 times.  It is a place where traders place wholesale orders after viewing the 62,000 stalls selling more than 410,000 possible products. Products include everything from tweezers to power strips. The city has seen an increase of 34% in exports from 2009.  This growth comes largely from the developing world, which accounts for more than half of the city’s $2.86 billion in exports in 2010.
• Asia’s New Car Industry Hub: Most people think of China or Japan as the most prominent auto manufacturers in Asia. That has certainly been the case for the past years but now the country of India is becoming a major manufacturing hub for the continent. Nissan’s Indian factory is less than a year old and covers 600 acres making it one of the company’s largest plants worldwide. Nissan is just one of the many major Asian auto companies that have set up manufacturing hubs in India.

The China Sourcing Blog:  What Makes a City Tier in China? We often hear of China’s first or second or third tier cities, yet what actually makes a city tier? The terms are so often used, yet there is actually no official formula for determining what tier a city falls in. Instead, everyone makes up their own rules. In 2009, RightSite.com, an online property trading website, identified five criteria for defining a city tier in China, namely:

• Population of more than five million people.
• Provincial GDP of at least RMB 250 billion, or RMB 350 billion in more prosperous provinces.
• Cities with strong economic growth (for which RightSite provided no threshold).
• Geography, i.e. cities which are the most significant in their area, like Xiamen (even though it only has around 2.5 million people).
• Advanced transportation infrastructure.
• Historical and cultural significance. Here Rightsite provides the example of Guilin, which is relatively small yet could be considered second tier due to it being a tourist centre.

From International Trade-CRS REPORTS:  Chinese Tire Imports: Section 421 Safeguards and the World Trade Organization (WTO): On April 20, 2009, the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union filed a petition with the U.S. International Trade Commission (ITC) requesting an examination as to whether Chinese passenger vehicle and light truck tires were causing market disruption to U.S. tire producers. Reciprocally, China filed a WTO complaint against the United States in September 2009, claiming that the Section 421 tariffs violate U.S. GATT obligations to accord Chinese tires MFN tariff treatment.