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Chinese merchants cautious about Dubai business

2009-12-01 13:39 BJT

Special Report: Dubai Debt Crisis |

The unexpected debt crisis in Dubai has sent tremors through an already uncertain financial markets. Here in the eastern city of Yiwu, smaller exporters say they are wary about trade with the Middle East.

Yiwu has traditionally served as a station for cargo transfer to the Middle East. Problems in Dubai have had an impact on small commodity exporters. Many have refused to receive orders from clients with bad credit records.

One dealer of Yiwu Small Commodity Market said "Right now I mainly accept payment in cash. And I prefer doing business with big firms if they are stationed in Dubai."

However, Yiwu's larger exporters say they are not concerned about the debt crisis, and are not planning a change in strategies.

Deng Chaofeng, General Manager of East Star Group Corp. said "I think the debt crisis will mainly affect sectors like property, finance and banking, as they're more likely to be bubbles in these sectors. For small commodity exporters like us, I think the effect will be minimal."

Meanwhile, insurance companies have set up a risk information mechanism to help cushion smaller exporters against the worst of the crisis.

Bi Shiwei, China Export & Credit Insurance Corp. said "We are closely watching the situation. We have collected and analyzed relevant data. If there are any abnormalities, we will immediately inform small commodity exporters."

Analysts say the current impact of the Dubai debt crisis is largely psychological, and the real effects are still uncertain. They also say that since Dubai only serves as a trade transfer area for Yiwu commodities, the crisis is unlikely to have much impact on Yiwu's exports.

Editor: Xiong Qu | Source: