A long and lasting love affair

Swiss entrepreneur says Yiwu is still the best place for doing business in China

Though the headwinds have not been that encouraging in recent times, Yiwu still remains a vital conduit in international commodity trade and a favorite of global commodity traders. But very few know that the city is also an ideal place for foreign entrepreneurs to incubate their business.

"In terms of business, I think Yiwu is probably the best place in China with all these markets. The whole city itself is a big market," says Michael Rechsteiner, 47, managing director of Rechsteiner Design GmbH, a design studio and manufacturer from Switzerland.

Headquartered in Kreuzlingen, Switzerland, the company designs and produces daily goods such as drinking bottles, pens and umbrellas for its clients in Europe.

Rechsteiner came to Yiwu in 2004 and looks after the design and production lines. The company reported a turnover of $2.5 million (1.9 million euros) in 2010 and $2 million in 2011.

Normally European companies prefer to set up their offices in Shanghai and come to Yiwu for business or purchase visits. Rechsteiner says that he prefers to stay in Yiwu because it has its own benefits.

One thing that is special about Yiwu is the short supply chain and small areas, he says.

"Of course Shanghai is a bigger city with better facilities, but its traffic is not that good for business. Sometimes it is hard to get a taxi in Shanghai and the subway is always flooded with people."

"But the traffic situation in Yiwu is much better compared with Shanghai," he says. "Moving around the city to collect the necessary raw materials such as nylon fabric to the actual delivery only takes about two or three hours. In cities like Shanghai, one may have to spend a whole day for this exercise."

Besides, Yiwu is also close to the port of Ningbo, and has many highways and high-speed trains to other important locations, he says.

Zhang Hong, section chief of the external liaison department at the Yiwu business bureau, says that as of last year, there were nearly 3,000 overseas companies that had representative offices in Yiwu. This accounts for more than 50 percent of the total foreign companies in Zhejiang province.

He adds that there are also more than 800 partnership companies in Yiwu, thriving due to the improving business environment.

Rechsteiner says that over the years, product quality has improved a lot from his suppliers in China.

"Companies here have learned to play by the rules and enhance their services. They bring me products only after careful in-house inspection and if there are too many defects, they promptly replace the goods in time," Rechsteiner says.

The company has more than 50 partners, half of whom are from Yiwu, and the rest from Ningbo, Shanghai and Kunshan, Jiangsu province. It has 15 employees, all of whom are from Yiwu.

"Business is all about partnership. Without respect for each other, there cannot be any smooth business," he says.

Though quite satisfied with his business in Yiwu, Rechsteiner expects more improvements in connectivity, especially Internet speeds. He says that during working hours he gets download speeds of just 20 to 60 kilobytes per second.

"Internet is what we are counting on for business. If I have a big file to download from Switzerland for printing a banner, I need high speeds."

For Rechsteiner, the charms of Yiwu not only lie in the business side, but also in the international environment.

In 2011, the city received 9.6 million visitors, with more than 530,000 from overseas, up by 18.2 percent from 2010. The number of overseas merchants living here for more than six months exceeds 15,000.

Rechsteiner says that in the past eight years the most significant improvement in Yiwu has been the living standards.

"When I came to Yiwu in 2004, there were not too many restaurants and the infrastructure was not that good either. But now there are enough supermarkets and places for leisure."

He describes himself as an open-minded person and says that the international culture here has enriched his life.

Currently merchants from more than 30 countries and regions are living in the small city. Various restaurants and bars are dotted across the city.

"The best thing about Yiwu is that there are different exotic bars and restaurants, which provide authentic food from various countries and regions. As long as you are willing to try, you can have food from Arabic countries, Thailand or even Brazil," says Hong Yu, a staff member from the local publicity department.

But above all, Rechsteiner is most into Chinese food.

One restaurant that attracts him most is Mao's Restaurant, which has Hunan cuisine.

"I heard that the chain restaurant cooks the favorite dishes of Mao Zedong and you can even see a Chairman Mao statue at the entrance of the restaurant."

He normally asks his driver to drop by and pick up takeouts from the restaurant four to five times a week.

He says that one reason for his food fever is that Switzerland is in the middle of Europe, without any sea around. He never used to eat seafood there because most of them were frozen products.

But after coming to China, especially Yiwu, he became a big fan of seafood, such as shrimps and crabs.

"In Yiwu, even small restaurants can offer dishes made from fresh seafood."

Besides experiencing various cuisines, he is also an avid night-life man in Yiwu. As a big karaoke fan, he goes to the local KTV three to four times a month with his friends.

"In Europe we do have karaoke, but it is in a much smaller area in bars. People get to write on a paper the song you want to sing, and wait for like three hours until you can sing one song. But the karaoke here is bigger, the size of a living room and you can sing as much as you like."

Every time he goes to the karaoke he sings around 20 songs. His personal favorites include songs by Elvis Presley. He also likes to sing Yelaixiang (Night Jasmine) and Tianmimi (Almost a Love Story), two typical Chinese songs, though he does not know what the lyrics mean.

Rechsteiner does not have a clear plan for his company in the coming years, but says that his business has been affected by economic fluctuations.

"Given the current economy situation in Europe, to make a plan is tricky. And big companies never make plans for no more than three years."

His major market is in Europe but his business has been struggling for the past two years due to the debt crisis. He says that there will be a 30 percent to 40 percent drop in sales from 2010 to 2012.

"The problem is that though we are still doing business in Yiwu, the quantity has decreased. My customers in the overseas markets have became more nervous and more careful about money," he says.

"The longer they take to solve the Greece issue, the more problems will come out from Portugal and Italy."

Meanwhile, he is confident that the market in the United States and Canada next year will firm up as the tide slowly turns. The company will soon start its business in these countries and he expects to report a growth in 2013.

That being said, he also says that he will not move from Yiwu for the next three years if he continues to stay in China. "My passion for Yiwu came from the desire to do projects that you cannot do anywhere else," he says. "I am not a big city fan. Yiwu, as a small city, is even more open than many big cities."

Contact the writers at linjingcd@chinadaily.com.cn and zhangjianming@chinadaily.com.cn