8.2006

Major Economic Indicators

Notes: * In Renminbi real terms
Sources: Yunnan Statistical Yearbook 2005, National Bureau of Statistics

General Background

Yunnan has a total area of 394,000 sq.km. Total population stood at 44.5 million in the 2005 census, comprising some 26 ethnic groups. The largest ethnic group in Yunan is called "Yi".

Yunnan has a great variety of landscapes. While Yunnan is a major forest zone in China, whose forest area accounts for 24% of the country's total, it is also a mountainous area where sunshine is abundant in some places. Three rivers - Yangtze River, Lanchangjiang and Nujiang Rivers - run through the province and generate exploitable hydroelectricity reserves. Yunnan yields a large number of plant and animal species, which lays the foundation of its Chinese medicine and food industries.

Yunnan shares borders with Vietnam, Laos and Burma, and is connected to Thailand and Cambodia by waterways. Hence, it is a major transport hub of the forthcoming China-ASEAN free trade area. Apart from the highway and rail links that are being built to link up Kunming with Bangkok, Vietnam, and other ASEAN countries, the Lanchangjiang-Mekong River waterway and new air services to ASEAN destinations have also been developed. Yunnan is positioning itself as a transport hub through which raw materials e.g. oil and iron ores from the ASEAN would be shipped to other inland provinces..

Industries

Source: Yunnan Statistical Yearbook 2005, National Bureau of Statistics

Most of Yunnan's light industries are related to processing of farm and natural produces whereas most of its heavy industries are related to processing of raw materials.

Notes: # For all state-owned enterprises and other forms with annual sales over RMB 5 million
Source: Yunnan Statistical Yearbook 2005

Yunnan's industry output is ranked 4th in western China. Major products in Yunnan are sugar, cigarettes, hydropower, sulfuric acid and chemical fertilizer, which all ranked among the top in China. Its outputs of flower, tea leaves, fruits and vegetables are also very famous.

Tobacco is the biggest industry in Yunnan, accounting for 26.4% of Yunnan's gross industrial output in 2004. Furthermore, it is ranked the No.1 in China, accounting for 17.6% of the national total output. Yunnan's tobacco and cigarettes are famous in China - well known brands include "Hongtashan", "Ashima", "Yunyan" and "Hongmei",hich all rank among the best in China. Yuxi is one of the most important tobacco production bases in China and the nation's largest cigarette manufacturer - Hongta Group is located in this city.

Electricity industry is another important economic pillar of Yunnan, which plays a key role in the "West-East Electricity Transmission Project". Yunnan is one of the major production bases of copper, lead, zinc, tin and aluminum in China. Gejiu city is well known as "the Kingdom of Zinc" with the reserves ranked first in the country. The Yunxi brand refined tin is one of the main products in Gejiu, which is registered on the London Nonferrous Metal Exchange. Besides, reserves of germanium, indium, zirconium, platinum, rock salt, sylvite, nickel, phosphate, mirabilite, arsenic and blue asbestos are also high.

In the 11th Five Year Programme Period (2006-2010), Yunnan is concentrating on the development of 10 industries, namely, tobacco, energy, metallurgy, petrochemical, equipment manufacturing, pharmaceutical, information, building materials, processing of farm produce and papermaking etc.

Yunnan is one of the renowned tourist centers and receives the largest number of tourists in western China. Kunming, Dali, Lijiang, Xishuangbanna and Shangri-la are all very famous tourist spots. In a recent 2006 survey by the Ministry of Commerce, Yunnan is the top tourist destination among Chinese. Gross income of tourism reached RMB43.0 billion in 2005. Yunnan has invested substantially in building the infrastructure for its tourism industry, and it has the largest number of star grade hotels in western China. Tourism also stimulated the development of other services, thus the tertiary sector represented nearly 40% of its GDP.

Foreign Trade

Reliance on foreign trade is not high. Exports amounted to US$2.6 billion. Major exports included chemicals and related products, base metals and related products, tobacco, vegetables, fruits and cereals etc. Owing to geographical proximity, ASEAN is the province's largest trading partner. Major export markets included Burma, Hong Kong, Vietnam, Japan, the US, Thailand, the Netherlands, Indonesia, the Philippines and Bangladesh etc. Exports to the ASEAN and EU have recorded spectacular growth in recent years.

In 2005, imports reached US$2.1 billion. Major import items included minerals, machinery and electrical appliances, electronics and telecommunications equipment. Major import sources included Burma, Canada, Hong Kong, Australia, Chile, India, Germany, Mexico, Vietnam and Indonesia. Imports from Latin America grew more sharply than the other regions.

A bottleneck to the development of trade has been transport. Cost of building roads and railways is high due to its mountainous landscape. Nevertheless, the government has been planning the construction of new roads and rails in the coming years.

Foreign investment

Total utilized amount of FDI amounted to US$ 189 million in 2005. The largest amount went to investment in manufacturing, which accounted for some 46% of the FDI contract amount in 2004. Other areas include farming, forestry, animal husbandry and fishery; business services; mining and quarrying etc.

FDI in Yunnan