Yunnan Province

Why invest in Yunnan Province

With publishing the 10-years overall development plan – Bridgehead Strategy – in January 2013, Yunnan has targeted itself as the important opening economic portal to link China towards Southeast and South Asia, even expand to the Middle East.

Based on the construction of current 5 pillar industries, such as the development of the tourism, tobacco, minerals, agriculture/biological resources, and (hydro) power industries, Yunnan will make increased efforts to step up their development to be more characterized.

Yunnan often proudly presents itself as a ‘green’ province with an equally ‘green’ economy. This means importance is attached to the sustainable development of the region’s bio-resources as well as the protection of its natural environment. The agricultural sector therefore gets a lot of support in the development of e.g. ‘green’ or organic food, but also the production of traditional Chinese medicine, cut flowers and bio-chemicals is being encouraged.

Yunnan’s strategic geographical location towards China’s ASEAN neighbors makes that the province is determined to become a major regional hub, especially with regards to transport, (tele)communications and tourism.

(Source: Netherlands AgriBusiness Support Office Kunming, China)

Investing in Yunnan Province

Investment is welcome in most sectors of the economy and it is open to all nationalities. Potential investors should consult the provincial “Regulations on the Guidance of Foreign Investment” and the “Catalogue of Priority Industries for Foreign Investment in Central and Western China (hereinafter referred to as the ‘Catalogue’), jointly released on May 14 by China’s National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOC).

The “Provisions on Guiding Foreign Investment” mentioned that foreign-invested projects included in the Catalogue are entitled to the preferential policies granted for the foreign-invested projects under the encouraged category. The catalogue was scheduled to take effect on June 10, 2013 (Source: China Briefing)

Selected priority industries for foreign investment in Yunnan province are given as below.

1. Follow-up development for series of national key ecological projects, such as “Returning Farmland to Forest and Grassland Projects” and “Natural Forest Protection Project”, etc.
2. Development and application of water-saving irrigation and dry land water saving technologies
3. Intensive processing industry of copper, zinc non-ferrous metals (limited to the joint venture, cooperation)
4. Development and application of special edible resources
5. Flax processing, development and comprehensive utilization of its by-product in accordance with the requirements of the ecological and environmental protection
6. Biology liquid fuel (ethanol, biodiesel) production from cassava, manioca, and rubber seed etc. non-food plants as raw materials (shares controlled by Chinese side)
7. Spinning and knitting of high-grade cotton, wool, hemp, silk, chemical fiber, and garment processing production.
8. Development, protection and sustainable utilization of animal and plant medicinal resources, except for restricted and banned resources)
9. Printing of printed products for packaging and decoration
10. High quality floats glass technology development and deep processing
11. Whole car special purpose vehicle manufacturing (foreign capital lower than 50%)
12. Broadband service and value-added telecom business (coverd by WTO Commitment framework)
13. Highway passenger Transportation Company
14. Medical and elder care institutions
15. Urban gas, heat, and water supply and drainage pipe network construction and operation
16. Production of broadcasting and TV program and film-making business (limited to cooperation)
17. Tourism area (scenic spot) protection, development, operation and recreational facilities construction.

Yunnan Province Macro Economic Indicators

Gross Domestic Product   

The Gross Domestic Product of Yunnan Province in 2012 has reached to 10309.80 hundred million yuan (around USD 167.64 billion) with 13% growth rate comparing to 2011, which is slower than last year as 13.7%.

Gross Domestic Product (GDP) and Growth Rate of Yunnan Province (2008-2012)

Note: 

Primary Industry: Farming, Forestry, Animal Husbandry and Fishery

Secondary Industry: Mining and Quarrying, Manufacturing, Production and Supply of Electricity, Water, Fuel Gas and Construction.

Tertiary Industry: Other economic activities not included in primary or secondary industry, such as services of farming, forestry, animal husbandry and fishery, communications and transportation, storage and postal serves, information transmission, computer software services, wholesale and retail trade, hotel and food services, banking, real estate lease and commercial services, scientific research and technical service, geological prospecting, health care, social security and welfare, culture, sports and entertainment, public management and social organization.

International Trade

Yunnan, like the rest of China, has gradually liberalized its economy and has reaped substantial benefits from opening up to the outside world. Through its policy of open border cities, international trade has flourished in Yunnan, especially with neighboring countries, of which ASEAN countries are the major trade market. International trade reached US$ 21 billion in 2012, with US$ 10.02 billion in exports from Yunnan and US$ 10.98 billion in imports. The international trade in 2012 was considered as a milestone to breakthrough US$ 20 billion for the first time in Yunnan’s history and became the 5^th of fastest growing provinces in China.

Total Value of Imports and Exports of Yunnan Province in 2008 -2012

(* USD billion, source: Yunnan Statistical Year Book 2012 and updated from news of Yunnan)

Total value of Exports and Imports: General trade and frontier petty trade in 2011 (by mode of trade). 

(* USD billion, source: Yunnan Statistical Year Book 2012) 

As reported by the Department of Commerce of Yunnan Province, from January to June 2013, total amount of Export and Import is US$ 8.41 billion, of which exported US$ 4.09 billion at a rate of 26.5% and imported US$ 4.320 billion at the growth rate of 5.3%. It is lower than the first quarter.  The foreign trade growth rate is getting slower than first quarter, but still higher than National level with a steady upward trend. (Source: http://www.yunnan.cn)

Yunnan has expanded its trade market to 179 countries and regions around the world, of which ASEAN is the biggest market with trade value of US$ 6.76 billion in 2012, 31.7% of total trade value of Yunnan. Most imported goods originate from Myanmar (its largest trade partner), Peru, Australia, ASEAN 6 and the United States. Yunnan trades actively with its border neighbors, the Lao PDR and Vietnam, but Myanmar is the main border trade partner. (Source: Yunnan Statistical Year Book 2012)

Precious metal became the top item exported from Yunnan with a value of US$ 3.24 billion, 32.3% of total exports value, 7 times than last year. The traditional agricultural products ranked as the second items with US$ 2.24 billion (20.4%), followed the mechanical and electrical products with US$ 1.67 billion (16.6%).  Major import items, including metallic mineral ore, natural rubber, timber, refined tin and its products, palm oil etc resource products and agricultural products, are growing fast to share the imports value.

(Source: Resident office in Kunming, Ministry of Commerce of P. R. China, and Yunnan Statistical Year Book 2012) 

Foreign investment

At the end of 2012, the amount of utilizing foreign investment in Yunnan totaled US$ 2.189 billion, increased 26% than last year and taking up 1.3% of the GDP 2012.

Yunnan’s top ten foreign investors include Hong Kong, Barbados, British Virgin Islands, Mauritius, Singapore, Switzerland, Myanmar, Taiwan, Indonesia, and France, which contribute 85% of total actual amount of foreign investments in Yunnan province.

Figure below shows the breakdown of foreign investment projects according to investment type and sectors. Foreign Direct Investment in Yunnan is moving from the traditional sectors of manufacture and agriculture to some new advanced materials and new energy industries including logistics, trade and banking services etc. modern services area. Besides, some competitive industries including international branded resort hotel, tourism scenic area construction, tea, animal by-products, woody oil plant, bio-pharmaceuticals, vegetables, fruits, tubers and flower became more popular for investment.

Utilization of Foreign Direct Investments by Type (2012)

USD million

(Source: Department of Commerce of Yunnan Province, March 20, 2013 http://www.bofcom.gov.cn/bofcom/432920630283730944/20130320/348830.html )

The foreign investment to Yunnan province covered in many industries without clusters. Real Estate is the main industry for attracting foreign investment with USD 657.66 million, 30.4% of total amount of FDI, followed by Wholesale and Retail Trade and Food Services (13.87%), manufacturing (12.41%), Construction (8.9%) and Production and Supply of Electricity, Gas and Water (6.59%) and others sectors (28.19%).

Utilization of Foreign Direct Investment by Sector (2011)

(USD 100 million)

(Source: Yunnan Association of Enterprises with Foreign Investment, April 3, 2013  http://www.ynaefi.com/content.aspx?id=290139655419 ) 

Agriculture outputs

The total agricultural outputs reach to RMB 268.01 billion in 2012, increased 7% than last year.

Volume and Increase rate of the main agricultural products, Yunnan Province, 2012

Industry outputs

The total added value of industry in 2012 is RMB 345.072 billion with an increased rate of 15.1%.

Output and Increase Rate of Major Industrial Products of Yunnan Province, 2012

Transportation, Storage and Postal Services

The total added value of Transportation, Storage and Postal Services is USD RMB 23.962 billion in 2012, increased 6.6 % than 2011.

Freight Volume and Increase Rate by Transport Modes of Yunnan, 2012

Tourism

The total number of overseas tourist arrivals in 2012 accounted for 8.864 million , including one-day-tour in borders, with around USD 1.95 billion foreign currency contributed to the provincial income. Meanwhile, around 196 million domestic tourists visited the province with a net earnings of  RMB 157.94 billion (around USD 25.68 billion) in 2012. The total tourism revenues of Yunnan was RMB 170.25 billion (around USD 27.68 billion).

(Source: The national economic and social development statistical bulletin of Yunnan province in 2012 http://www.stats.yn.gov.cn/TJJMH_Model/newsview.aspx?id=2204492)

Yunnan Province Infrastructure

There are altogether 12 civil airports and 323 airlines, connecting with 98 cities. 30 domestic and international aviation companies have been operating in Yunnan aviation market. Kunming Airport has put the following airlines into operation: 159 domestic airlines connecting 71 domestic cities, 24 international airlines connecting 23 international cities and 3 regional airlines connecting Hong Kong, Macao and Taipei.By 2015, there will be 19 airports, distributed in the pattern of one large hub, 6 middle-scale airports and 12 small branch airports: overall development of main and branch airports has been realized. The airline network covers Europe, Asia, Africa, Australia and North America, with more than 40 international airlines.

Railway network   is about 2,500 km. During 12th Five-Year Plan period, around  5,000 km has been planned.. It is predicted that the “eight trans-provincial railways and four trans-national railways” network will be completed during the plan period. The total length of highways in 2011 in Yunnan was 214,500 km, including 2,746 km of expressways, ranking as the first in western China with13,141 km of High Class Highway above Class II has been opened to traffic.The Yunnan sections of four international passages (China-Vietnam, China-Laos-Thailand, China-Myanmar and China-India) are  of High Class category. 

5 main rivers including Jinsha River, Lancang River, Red River, Nanpan River and Nujiang River and 63 branches of them, covering 14,200 km, run through Yunnan, among which there are over 8,000 km of exploitable and usable navigation channels. During 12th Five-Year Plan period, shipping mileage open to traffic will reach 4,000 km. , In power infrastructure,  a power grid with 500 kV as the trunk and 220 kV as the main grid, covering 16 prefectures/cities has been established in Yunnan and power is available in all administrative villages. Through the construction of “broadband Yunnan”, over 100,000 km communication cable network and China-Myanmar, China-Laos international cables have been established.

High speed broadband network is available throughout the province.9 lines, totally 304-km-long, are planned to be built in Kunming. Subway Line 1 and 2 put into service in 2012; Line 3 will be put into trial operation in December 2013.

Yunnan has 16 Class I national ports, 7 Class II ports and is one of the major port provinces in China.

Research and Development in Yunnan Province

University

·         School of Economics, Yunnan University, http://www.eco.ynu.edu.cn/

·         Kunming University of Science and Technology, www.kmust.edu.cn

·         Southwest Forestry University, http://english.kmust.edu.cn/

·         Business College, College of Economic and Administration, Yunnan Normal University www.ynnu.edu.cn

·         Yunnan University of Finance and Economics, http://www.ynufe.edu.cn

Academy and Institution:

1.     Yunnan Academy of Social Sciences; Yunnan Academy of South East Asian and South Asian Studies, http://www.sky.yn.gov.cn/english/

·         Rural Development Institute

·         Consultant Centre of Social Gender and Active Training

·         Research Center of Religious Classics and Documents

·         Research Centre of Regional Cooperation among Bangladesh, Chinalndia,Myanmar[Study Centre of BCIM]

·         Center for Chinese Southwestern Culture Studies

·         International Center for Eco- Culture Studies

·         Center for Community Development Studies

·         Religious Studies

·         Historical Studies and Studies on Historical Literature

·         Philosophical Studies

·         Sociological Studies

·         Economic Studies

·         Ethnological & Anthropological Studies

·         Studies of Southeast Asia and South Asia

·         Marxist Studies

2.     Academy of Commerce of Yunnan Province, Department of Commerce of Yunnan Province

http://www.bofcom.gov.cn/bofcom/433473688927469568/20130220/346949.html

Yunnan Province Natural Resources

Minerals

Renowned as the Kingdom of Non-ferrous Metals, Yunnan has a complete collection and large reserves of various minerals. Of the 168 kinds of minerals discovered in China, 142 ones can be found in Yunnan. The reserves of 54 of these minerals in the Province rank among the top 10 in the country. Moreover, Yunnan comes out in the top three places in China in terms of the reserves of 25 minerals including lead, zinc, tin, phosphorous, copper, and silver. Yunnan is also rich in non-metallic minerals such as limestone, dolomite, halite, marble, and granite.

Energy resource

Energy resource development in Yunnan Province has huge potentials, in particular in the area of hydropower development. Over 600 rivers in 6 water systems across the province hold 222.2 billion cubic meters of water resources in store. The theoretical hydropower reserve is estimated at 103.64 million kilowatts, the exploitable installed capacity amount to more than 90 million kilowatts and the annual generating capacity is up to 394.45 billion kwh.

Yunnan province also enjoys bright prospects for developing its geothermal, solar, wind and other energy resources. For example, with its coal reserve ranking the ninth in the country, Yunnan is an important coal industry base in southern China．

Yunnan has particularly rich geothermal resources with 706 hot springs of different types distributed in 124 counties. About 360 million cubic meters of hot water flow out from these hot springs every year and the thermal power discharged is equivalent to that of burning 118.7 tons of coal. It is next only to Tibet in geothermal resources and thus constitutes an advantage for Yunnan to capitalize on for the development of its tourism as well as thermal energy industries.

Forest resources

Yunnan boasts the largest variety of plant species in China. Of nearly 30,000 species of higher plants in China, 17,000 or 62.9% of the total, can be found in the province, thus giving Yunnan the reputation of being a Kingdom of Plants. 105 varieties of forests are flourishing here, including tropical rainforests, monsoon forests, and virgin forests. More than 4,000 species of trees are found in Yunnan, of which more than 2,700 are arbor species. A full range of tropical, subtropical, temperate, and frigid plants are growing here. Many of them are antique and rare species or species unique to the province. Yunnan is also endowed with particularly rich bamboo resources. There are a total of 200 species of bamboo plants in the province and the total acreage amounts to more than 100,000 ha.

Crops

Besides these, Yunnan has more than 300 varieties of cash crops, including tea, rubber, oil palm, anise, tung tree, cinnamon, and coffee, many of which are unique to the province. Yunnan is also a treasure house of Chinese medicinal herbs. More than 2,000 species of medicinal herbs grow throughout the province, of which 1,250 are herbs in common use. More than 400 are used as raw materials for traditional Chinese medicine prescriptions and pharmaceutical manufacturing. Because of its varied species of spices, Yunnan is also renowned as the homeland of spices. In total, there are around 400 species of spices belonging to 69 families.

Yunnan Province Economic Zones

Yunnan Province has a total of143 industry parks located in 16 prefectures, of which there are 6 national level industry parks (include 3 national border economic zone), 40 provincial key and featured parks.

An industry park development project named as “One hundred billion yuan project” has been targeted of 10 key industry parks to increase the sales revenues to be over 100 billion yuan. The project includes Kunming Economic & Technological Development Zone, Kunming National Hi-Tech Industries Development Zone, Anning Industry Park, Yanglin Industry Park, Wuhua Science and Technology Industrial park. Meanwhile, a 10-billion yuan project is aim to develop another 30 industry parks which include Dongchuan Re-employment Featured Industrial Park and Industry Parks in Haikou, Guandu, Chenggong, Xundian, Jinning, Yiliang and Fumin.

In 2011, all industry parks output a total industrial value of RMB 543.186 billion, 70.48 5 of Yunnan provincial gross industry value.

(Source: Jinning Industry Park http://www.jngyy.com/Artices_View.aspx?id=1129)

Kunming National Hi-Tech Industries Development Zone

Planned to cover an area of 9 sq. km, of which 5 sq. km for Phase I development. Well-developed water supply, electrical power supply, gas supply, and communication facilities as well as supporting facilities such as banks, bonded warehouse, schools, commercial and residential quarters, and apartments.

1,581 enterprises, including Yunnan Tengpu Technology Co., Ltd., Nantian Electronic Information Group Corp., Yunnan Keyouda Communication System & Equipment Co., Ltd., Kunming Baker Norton Pharmaceutical Co., Ltd., Yunnan Spirin Biotechnology Co., Ltd., Kunming Aomei Printing Co., Ltd., and Coca-Cola (Kunming)

Contacs: Administrative Committee of Kunming Hi-tech Technology Development Zone

Tel: 0871-68355189  Website: www.kmhnz.gov.cn

Kunming Economic & Technological Development Zone 

Planned to cover an area of 11.3 sq. km, of which 6.58 sq. km has been developed.

Roads, water supply, drainage, communications, and power supply facilities in the Zone has been completed; banks, post office, telecommunications service outlets, hospital, and schools has been set up. 

547 enterprises including Salim Group, Chia Tai Group, Ting Hsin Group, CNGC Kunming, Hongta Group, Yuntianhua Group, Kunming Shipbuilding Equipment Co., Ltd., and Yunnan Electric Power Group Co., Ltd.. 

Contacts: Administrative Committee of Kunming Economic & Technological Development Zone   Tel: 0871-68163015   Fax: 0871-68163011 Website: www.ketdz.gov.cn 

For details of Industry Park of Yunnan Province, please visit the Yunnan Industry Park Investment Network (in Chinese) at http://www.ynyq.org.cn/index.php.

Yunnan Province Financial Services

Yunnan Province Bank and Financial Agencies Profile, 2012 

Yunnan Province Business Associations