Stranded footwear and stuffed warehouses: How the Middle East conflict is hitting China’s economy

In the sprawling labyrinth of shops and showrooms in the Chinese city of Yiwu, parts of what’s widely known as the "world’s supermarket" are beginning to look more like a world-class warehouse.   

Across a mind-boggling 80,000 stalls spread over more than 50 million square feet, vendors hawk everything from glittery Christmas ornaments and plastic toys to high-end electronics. Amazon and Walmart source a lot of what they sell from here.  

If the world buys it, Yiwu sells it.

Yet household goods that should be in containers at sea are sitting idle, victims of a conflict thousands of miles away.

For a snapshot of how the U.S.-led war in the Persian Gulf, and Iran choking off the Strait of Hormuz, is rattling global supply chains, this city in eastern China offers some striking examples.

While there are no firm statistics about how much of the commerce here is driven by the Middle East, local business groups estimate the region buys 30 per cent of what’s sold here.

"We have a lot of customers in the Middle East," said Suad Ding, a safety footwear supplier whose showroom is lined with rows of hiking and construction boots.

She has 25,000 pairs of boots and shoes meant to be on shelves in Riyadh and Cairo that are now stalled in the supply chain.

Before the war, Ding says it typically cost $1,200 US to ship a container — now the price is around $6,000.

"The client said the shipping fee was too expensive," she told CBC News from her showroom.

The importers at the other end are waiting for prices to drop. One possibility is for Ding to find another customer — she’s hoping potential buyers from Argentina she just met at the market may take some of her footwear instead.

"[The war] will have a big impact," Ding said. "But we will not sit and wait. We will actively develop the business of other countries."

The wholesale backlog extends well beyond footwear.

Just outside Yiwu, a warehouse owned by businessman Li Tenghui is filled to the ceiling with boxes of kitchenware destined for Lebanon that he also can’t move because of the spike in shipping costs.