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Longshui Market, the Next Yiwu for Hardware and Metal Trading to Emerge in China

By RAN ZHENGICHONGQING|Oct 04,2022

Chongqing- Recently, the Chinese central government developed new forms of foreign trade and cultivated new growth drivers. The Longshui hardware market in southwest China’s Chongqing municipality was selected to pilot the market procurement trade, according to the Chongqing Municipal Commission of Commerce.

Dazu Longshui hardware market

The Dazu Longshui hardware market. (Photo provided to iChongqing)

The market procurement trade refers to the trade mode in which qualified operators purchase commodities less than (including) 150,000 U.S. dollars for a single customs declaration in the market recognized by the central government and go through the customs clearance procedures for export commodities at the place of purchase.

This trading mode is created for multi-variety, multi-batch, and small-batch foreign trade transactions in the professional market, with fast customs clearance, facilitation, and value-added tax exemption.

Joined cross-border e-commerce platforms like Amazon

Longshui hardware market, located at Longshui Town in Dazu District, is the largest hardware market cluster in western China, integrating hardware trading, metal trading, and extensive commerce, with about 18,000 stores and 12,000 merchants.

The market deals with 2000 products in 12 categories, including daily hardware, tool hardware, building hardware, auto, and motorcycle accessories, intelligent robots, and semiconductor chips.

Approximately 560 overseas purchasers are distributed in more than 70 countries and regions, and the domestic purchasers are about 60,000. The transaction volume in 2021 amounted to 43.5 billion yuan (about 6.1 billion U.S. dollars).

Dazu Longshui Hardware Market

The Dazu Longshui Hardware Market. (iChongqing/ Zhengran)

“The market procurement trade pilot will not only enrich Chongqing’s foreign trade business, promoting small commodities export, but also become a new growth pole for the city,” said an official from the Chongqing Municipal Commission of Commerce.

In 2021, 45 enterprises in Dazu District joined cross-border e-commerce platforms like Alibaba international station, Amazon, and Aliexpress. The Dazu hardware e-commerce industrial park achieved a 15.7 million yuan trade value via cross-border e-commerce. In 2021, Dazu’s imports and exports reached 6.3 billion yuan, with a year-on-year growth of 29.05%.

“The whole district’s export scale will reach 20 billion yuan within three years, attracting 30,000 to 50,000 domestic and foreign personnel to work and live in Dazu,” said an official from the Dazu District Commission of Commerce.

The world’s largest distribution center for Christmas products

China has already conducted 31 market procurement pilot projects, for which supportive policies such as simplified declaration have been applied to facilitate market procurement trade development.

Yiwu International Trade Market in Zhejiang province is China’s earlier pilot market and has succeeded.

Based on efficiency declaration procedures, Yiwu introduced many facilitation policies involving customs and taxation, built trade and logistics platforms, and promoted foreign trade transformation. After the trade pilot, Yiwu’s market players increased rapidly, products continued to innovate, and international trade became more standardized.

China's market procurement trade 2021

China’s market procurement trade in 2021. (iChongqing/ Zheng Ran)

Now, Yiwu is the world’s largest distribution center for Christmas products such as tree decorations, Yuletide clothing, greeting cards, festive lights, and packaging, with two-thirds of the world’s goods in this category coming from the county-level city.

In 2021, Yiwu’s exports reached 290.2 billion yuan through market procurement trade, accounting for 31.2% of the country’s total.

Since the outbreak of COVID-19, the types of commodities exported by market procurement trade have been increasing. The average annual growth rate of national market procurement trade export has remained above 30%. In 2021, the national market procurement trade of export goods was 930.4 billion yuan, up 32.1% yearly.

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