The Newsletter 76 Spring 2017

'Little India' in China

Ka-Kin Cheuk

<p>Located in eastern Zhejiang Province as a district under Shaoxing municipality, Keqiao is not only a global trading hub, but also a ‘Little India’ in China. Its wholesale market accounts for one-third annual turnover of a bewildering variety of fabrics: the semi-finished, lightweight textiles that are industrially weaved, knitted, dyed, and printed in China before being exported to over 180 ports around the world. In the local market, around 5000 Indians have established intermediary trade businesses in Keqiao. Together with other foreign traders, these traders have brokered a large amount of fabric trade for their buyers in different parts of the world, mostly in the Global South.</p>

Drawing on long-term fieldwork in Keqiao (2011-2012; 2016-2017), this ethnographic study explores the everyday work experience of Indian traders in the local fabric market. It unpacks the economic niche that they have created through local market engagements, as well as the transnational trading networks that have sustained this niche in the global value chain of textiles. As such, it aims to explore the significance of Indian-Chinese fabric trade in Keqiao in the global economy.

In 1998, the first Indian came to open a trading office in Keqiao. But Keqiao’s fabric market existed long before that. It proliferated in the late 1970s, when a large part of Zhejiang Province was still plagued by poverty and underdevelopment. Many local Chinese peasants and fishermen became peddling traders selling fabrics, while others converted their houses into household factories supplying fabrics to the traders. The local traders organized a fabric bazaar along the main canal area. It later became the central marketplace accommodating over 20,000 wholesale shops and distributing more than 10,000 types of fabrics. The continuous inflow of Chinese migrant traders, particularly those from the rural areas in Wenzhou and Sichuan, has further enhanced the local supply chain, as they have connected Keqiao to a sales network across the whole nation.

Throughout the 1980s and 1990s, such developmental dynamics from below have received institutional support from the local government, in a time when state’s support was not common in the local market economy. The local government, for instance, played a crucial role in improving the infrastructure of Keqiao, facilitating the robust growth of its fabric trade economy. In recognizing the economic achievement and national importance of Keqiao’s fabric industries, in 1992, the central Chinese government named the marketplace area ‘The China Light Textile City’ (中国轻纺城).

Indian-Chinese connections

In Keqiao, it is well-recognized that the arrival of many Indian traders drastically transformed the local trade landscape. The first wave of Indian migrants to the city coincided with its exponential growth of fabric exports in the early 2000s. Since then, the value of fabric exports has overtaken that of the domestic trade, thereby making international fabric trade indispensable to the economic development of Keqiao. From the perspective of the Indian traders, their relocation to Keqiao was largely a market choice. These Indian traders usually operate their transnational business on limited budgets. Most of them specialize in the intermediary trade of low-grade fabrics for the price-savvy buyers, particularly those frequenting the re-export market in Dubai. Living in Keqiao enables the Indian traders to establish stronger networks with suppliers. It allows them to negotiate better prices and higher commission fees for the trade orders. In so doing, the Indian traders capitalize on the unique market structure of Keqiao’s fabric industries: over 80 per cent of Chinese suppliers are running small and medium-sized enterprises.

In Keqiao, most of these suppliers only manage to supply cheap and low-quality fabrics, which is a crowded market that inevitably faces intense price competition. The local price competition, however, turns out to be a market strength in the low-end export sector, given that the Indian traders are also extremely price-sensitive in their purchases. With both sides being so much strained on the price factor, their everyday encounters in Keqiao tend to be fraught with tension and conflict. Nevertheless, holding to a dual commitment of cutting cost and maintaining partnership, Indian-Chinese trade in Keqiao is a resilient force in sustaining the grassroots connections between China and the Global South, especially so in the time of on-going global economic uncertainties.

Ka-Kin Cheuk, Postdoctoral Researcher, Leiden University (