Xinhua Analysis Highlights Yiwu Model for County Development

On July 22, 2026, Xinhua News Agency published a comprehensive analysis of the Yiwu development model, exploring how an impoverished inland county transformed into the world’s largest small commodities trading hub. The publication coincides with the 20th anniversary of the “Yiwu Development Experience” being formally promoted across Zhejiang Province and follows President Xi Jinping’s April 2026 directive to further summarize and apply the model nationwide.

The Yiwu Miracle

Yiwu’s transformation is nothing short of remarkable. Located in central Zhejiang Province with no coastal access, mineral resources, or natural transportation advantages, the city has built a global trade empire from scratch. The Yiwu International Trade Market now spans 800,000 square meters with over 80,000 shops offering more than 2.1 million product varieties.

In 2025, Yiwu’s total import-export value reached 836.5 billion RMB (approximately $115 billion), with exports of 730.69 billion RMB ranking first among all Chinese counties. The city’s GDP grew from 30.48 billion RMB in 2005 to 269.33 billion RMB in 2025, while urban per capita disposable income reached 101,816 RMB — first among Chinese counties for 19 consecutive years.

From “Chicken Feathers” to Global Trade

Yiwu’s merchant culture traces back centuries through the “chicken feather for sugar” (ji mao huan tang) tradition, where itinerant traders exchanged daily goods for feathers. The modern breakthrough came in 1982 when a vendor named Feng Aiqian confronted the newly appointed county Party Secretary Xie Gaohua, asking: “I’m doing small business to support my family, why won’t the government allow it?”

This encounter led to the landmark “Four Allowances” — permitting farmers to engage in commerce, long-distance transport, open urban-rural markets, and multi-channel competition. As CCTV reported on Xi’s April directive, this grassroots-driven policy shift laid the foundation for what would become a national model.

Xi Jinping’s Enduring Role

President Xi Jinping visited Yiwu 11 times during his tenure as Zhejiang Party Secretary (2002-2007), driving institutional reforms that included a historic 2006 expansion of administrative powers. In September 2023, Xi visited the Yiwu International Trade Market, remarking: “This place, neither coastal nor border-adjacent, how did it become a global trade center? It’s because the people of Yiwu achieved ‘creating something from nothing’ and ‘inexplicable’ success.”

In April 2026, Xi issued a directive emphasizing that the Yiwu Experience represents “a successful practice of developing county-level economies according to local conditions,” calling for its further application nationwide.

Key Drivers of Success

Grassroots Entrepreneurship Meets Government Responsiveness

The core dynamic driving Yiwu’s growth follows a pattern: grassroots innovation → government recognition → institutionalization → further innovation. The 1982 Feng-Xie encounter exemplifies this cycle, where a vendor’s complaint catalyzed policy change.

Government-Market Balance

Yiwu operates on a “market runs first” principle, allowing new business models to emerge before regulation catches up. The government focuses on infrastructure, streamlined administration, and legal frameworks — described locally as “proactive without overstepping, present without absent.” Yiwu has become a national reform laboratory, undertaking 111 national-level and 216 provincial-level innovation pilot tasks.

Institutional Evolution

The city’s market has undergone six relocations and 13 expansions. The 2006 administrative expansion granted Yiwu 472 expanded powers, making it “China’s most powerful county-level government.” The latest milestone is the sixth-generation Global Digital Trade Center, which opened in 2025. As Chen Dezhan, Chairman of Commodities City Group, told Xinhua: “The sixth-generation market transcends traditional physical space, marking Yiwu’s entry into the era of digital-intelligence-driven trade.”

Infrastructure Breakthroughs

Overcoming its inland geography, Yiwu built the Yixin’ou China-Europe Railway Express, which now operates 27 routes with over 16,000 trains serving 50+ countries and 160+ cities. Sea-rail intermodal links connect Yiwu to the Port of Ningbo-Zhoushan, while digital channels including cross-border e-commerce and overseas warehouses complement physical infrastructure.

National Policy Implications

The coordinated media campaign around the Yiwu Experience carries significant policy signals. As Qiushi Journal analyzed on July 23, the model offers five key lessons: developing according to local conditions, respecting grassroots creativity, maintaining persistent effort over successive administrations, prioritizing people’s wellbeing, and balancing local development with national interests.

A Xinhua commentary published the same day emphasized that the Yiwu Experience demonstrates the importance of “strategic resolve” (dingli) and “reformist drive” (ruiqi) in pursuing high-quality development.

Looking Ahead

The Yiwu model is being positioned as a template for county-level development nationwide, particularly for regions lacking natural resource advantages. Its emphasis on persistent effort across successive administrations reinforces Xi Jinping’s campaign against short-termism in local governance.

However, questions remain about the model’s replicability for regions without Yiwu’s specific historical merchant culture, and whether its IP-driven upgrade can be sustained amid global trade tensions. Yiwu Party Secretary Ye Bangrui affirmed the city’s direction: “Yiwu has always adhered to ‘prospering commerce to build the city’ without wavering.”

As China’s 15th Five-Year Plan (2026-2030) prioritizes high-quality development, the Yiwu Experience offers a concrete example of how market mechanisms, grassroots entrepreneurship, and effective governance can combine to drive transformative economic growth.