Palestinian markets have long been flooded by low-cost Chinese goods. Traders in Hebron, the largest Palestinian city and a commercial hub for the territories, fear that if the outbreak and quarantine efforts continue they will have to switch to more expensive alternatives, passing higher prices on to consumers in an already weakened economy.
Their concerns point to the potential for wide-ranging ripple effects from the outbreak in China, the world's largest exporter. The health crisis has already thrown the global travel industry into chaos and threatened to disrupt supply chains around the world that depend on China. That a city deep inside the Israeli-occupied West Bank is so reliant on Chinese goods illustrates the perils of global economic integration.
The illness, recently named COVID-19, first emerged in December in the central Chinese city of Wuhan. Since then, the virus — a new type of coronavirus — has spread to about two dozen countries and infected more than 73,000 people. It has caused more than 1,800 deaths, nearly all in China. No cases have yet been identified in Israel or the Palestinian territories, but merchants have felt the impact and fear the worst is yet to come.
Samer Abu Eisha, a children's clothes wholesaler in Hebron, has been importing from China for more than two decades. He has a permit from Israel that allows him to fly from Ben Gurion International Airport to China's Guangzhou province every two months so he can place orders with factories there and supervise output.
But business ground to a halt last month as the outbreak gathered pace. Israel and neighboring Jordan have suspended all flights to China, shipments have been put on hold, and Abu Eisha says his agent in China is confined to his home because of a local quarantine.
If the situation continues he'll have to explore other options. The effects will vary from business to business, with some already feeling the pinch and others preparing to switch up supply lines — and raise prices — in the coming months.
“There is an alternative in Turkey, but it’s not the same. It’s not the same quality or the same workmanship or the same price," he said. "It’s hard because all the raw materials also come from China, so things will be more expensive.”
He estimates he'll have to raise prices by up to 30%, which could pose difficulties in the local market. Decades of Israeli restrictions have hindered economic development in the West Bank, leaving many Palestinians reliant on low-cost imports.
“The economy here is terrible. In Palestine it’s zero, or less than zero,” Abu Eisha said. Bilal Dwaik, another Hebron merchant who imports women's clothing from China, was supposed to travel there later this month but had to cancel his trip because of the outbreak. He says if it continues the effects will be felt across the region.
“The economies of the whole Arab world are not productive, they aren’t self-sufficient," he said. "It’s all dependent on imported goods, on Chinese goods.” Palestinian traders began flocking to China in the 1990s after the Oslo accords with Israel allowed the newly created Palestinian Authority to pursue an independent trade policy.
More than $33 million of Chinese goods were imported in 1998. A decade later that figure had quadrupled, and in 2018 total imports from China reached $425 million, according to the Palestinian Central Bureau of Statistics.
The imports have taken a heavy toll on local manufacturers, especially Hebron's famous shoemaking industry, which even produced boots for the Israeli army until the military switched to a U.S. supplier a few years back.
Abdo Idrees, the head of Hebron's Chamber of Commerce, says the number of factory workers making shoes has plummeted from 35,000 in the mid-1990s to fewer than 8,000 today. “The world is intertwined,” Idrees said. “The entire world is relying on China and no alternative has emerged.”
Shifa Abu Saadeh, the general director of the Palestinian Economy Ministry, says some 700 factories in the West Bank and the Gaza Strip were shuttered in the 1990s alone. The Palestinian Authority has tried to stem the tide by imposing tariffs of up to 35% on imported goods, but competitively priced Chinese imports still fill local shelves.
The penetration of Chinese goods can be seen in the bazaar in Hebron's Old City, where the narrow stone alleys are lined with shops selling ceramics, embroidery and other souvenirs, much of it imported.
Abdelkarim al-Karaki says about half the souvenirs in his shop come from China — even the keffiyehs, which are the traditional Palestinian checkered scarf that the late Palestinian leader Yasser Arafat almost always wore and made famous.
His high-end products are manufactured locally, often by artisans engaged in traditional handicrafts. But the least expensive options are from China. He recently went to a local trader to order more Chinese merchandise — only to find that none was available.
“He said China’s closed. That will have a huge impact on my business if it continues,” he said. Others in the Old City said they would welcome the loss of Chinese imports, which they blame for the decimation of local industries.
“Shoes, woodwork, metal, embroidery, aluminum, it’s all from China,” said Musbah al-Hammouri, who has a jewelry shop in the Old City. He says the quality is “very, very bad” but acknowledges that he sells Chinese goods to cater to customers on a budget.
“If they close China for a hundred years it would be perfect,” he said. “You wouldn't see a single poor person around here.”