ERBIL, Kurdistan Region - The decade-long financial crisis in the Kurdistan Region is rippling far beyond its borders, with Kurdish merchants in east China telling Rudaw that economic fluctuations have significantly harmed both their investments and livelihoods.
“In my opinion, the trade situation is not very good this year due to the political and economic situation back home,” said Alan Talib, a Kurdish merchant living in the central Chinese city of Yiwu in Zhejiang province, on Saturday.
“Salaries are not good back home, and the conflict involving Iran has really had a significant impact on our business,” he added. “We thought the situation would have been much better compared to previous years after the coronavirus outbreak; however, sadly, this is not the case.”
Many Kurdish merchants and traders in China reside in Yiwu, a city renowned for its International Trade City - the world’s largest wholesale market for small commodities.
Sarkawt Abd al-Qadir, a Kurdish merchant based in Yiwu, told Rudaw on Saturday that “due to the war and issues in our region, it [the business] is slightly down, but only by a very small margin.”
In a similar vein, Nizar Sami, another Kurdish merchant who moved from the Kurdistan Region’s northern Duhok province to Yiwu eight years ago, works in freight and exports goods to the Region.
“Due to the wars and tensions in the Middle East, the financial situation in Iraq - particularly in the Kurdistan Region, and specifically the non-distribution and delay of civil servant salaries - there has been significant damage and a major impact on the market and the export of goods,” Sami told Rudaw.
For more than a decade, public employees in the Kurdistan Region have struggled with severe financial uncertainty amid ongoing disputes between Baghdad and Erbil. Salaries have often been delayed, reduced, or at times not paid at all.
The Iraqi government has repeatedly failed to release the Kurdistan Region’s share of the federal budget on time, often accusing Erbil of not meeting its financial obligations - a claim the Kurdistan Regional Government (KRG) consistently denies.
So far this year, civil servants in the Region have received salaries for only eight months, while their September salaries remain pending. Their counterparts in federal Iraq, meanwhile, have been paid on time throughout the year - a disparity that has weakened market performance in the Kurdistan Region.
Trade and economic relations between the Kurdistan Region and China have strengthened significantly in recent years, fueled by Beijing’s investments in infrastructure, energy, and manufacturing.
China-Iraq bilateral trade reached a record $54.2 billion in 2024 - a 9 percent year-on-year increase - to which the Kurdistan Region contributed significantly, according to Liu Jun, Consul General of the People’s Republic of China in Erbil, in an op-ed published by Rudaw in mid-March.
Earlier this month, Sulaimani province and Yiwu officially became sister cities, agreeing to enhance trade, cultural, educational, and agricultural ties. The partnership was formalized in a memorandum of understanding signed on November 14 between Sulaimani Governor Haval Abubakir and Yiwu authorities.
“Iraq is a very important country in the Belt and Road. We always attach great importance to the friendship between this province and your province, and we hope the exchange in the business communities of the two sides will grow closer and closer,” said Chen Huidong, deputy director of the Foreign Affairs Office of Zhejiang province.
China’s Belt and Road Initiative is a massive infrastructure and investment program aimed at expanding global trade routes.
“We want to bring more Iraqi products to our province, and you are welcome to buy anything you want from the Yiwu market,” Huidong added, predicting that Yiwu plans to sign similar agreements with other Iraqi cities.
Sulaimani Governor Abubakir also described Yiwu as “the capital of the world economy.”
“Over the past eight years, we made Sulaimani very popular as the local government has focused on small and medium-sized businesses,” he said.
“Sulaimani’s foundation in terms of human resources, finance, financial assets, and infrastructure pushed the Chinese to choose Sulaimani. Yiwu chose Sulaimani as its sister city.”
Mahdi Faraj contributed to this article from Yiwu, China.
