Unlocking Yunnan's full potential through regional cooperation

Yunnan has made tremendous progress over the last two decades. GDP growth averaged 10.2% per year, and per capita GDP increased at an average annual rate of 9.3% between 1990 and 2013. The population below the poverty line ($1.25 a day) was reduced to around 17%. Despite these impressive achievements, per capita GDP is still 58% of the national average and about 12% of the 129 counties in Yunnan are still designated as "poverty-stricken counties" by the central government.

The province is mountainous and landlocked, which makes trade with other parts of China and neighboring countries less competitive. The provision of basic services to the poor in remote areas is challenging. Moreover, rapid growth in earlier years has put enormous pressure on natural resources and the environment. The widening development disparities between Yunnan and the coastal provinces, and between rural and urban areas within Yunnan, are a concern.

However, I believe Yunnan is blessed with its strategic location. It shares borders with Myanmar, Lao People's Democratic Republic (PDR) and Viet Nam, all fast growing developing economies. Hence, Yunnan can become a land bridge for trade and investment between China, Southeast Asia, and South Asia. Yunnan is also blessed with a pleasant climate, rich biodiversity, and a diversity of cultures with 25 ethnic minorities, which provides substantial opportunities to expand tourism.

Recognizing that cross-border regional cooperation can help connect landlocked regions to regional markets and to global markets, Yunnan was the first Chinese province to join the Greater Mekong Subregion (GMS) Economic Cooperation Program in 1992. The GMS Program aims to promote economic and social development in the six Mekong countries, namely, Cambodia, China, Lao PDR, Myanmar, Thailand and Viet Nam, by strengthening their economic linkages in agriculture, energy, environment, human resources development, investment, telecommunications, tourism, transport infrastructure, and trade facilitation. The GMS strategy helps to increase competitiveness and promote a greater sense of community. Indeed, historically, many cities in Yunnan prospered due to active cross-border trading of tea, silk, fruits, and jade.

Much has been achieved under the GMS Program. The major transport corridors that link the countries in the subregion are largely complete. Goods can be transported, and people can travel by road from Kunming to Bangkok via Lao PDR or Myanmar, or from Kunming to Ha Noi to Hai Phong in Viet Nam, under the GMS North–South Economic Corridor. The GMS power interconnection projects have helped to lay the foundations for grid interconnection among the GMS countries. A communication superhighway network, supported by optical fiber interconnection, is being developed to provide a broadband platform for voice, data, and the Internet services.

But there is more to be done. Countries in the GMS program need to step up efforts to take full advantage of the physical infrastructure connectivity. More is needed to transform transport corridors into vibrant economic corridors. Improving transport and trade facilitation through the introduction of one-stop customs and harmonization of quarantine administration is crucial. This facilitates cross-border transport, trade, investment, tourism, and access to vital services in the subregion. In addition, countries must create a business environment that allows the private sector to invest in trade, industry and infrastructure development, such as cross-border economic zones. In these activities, there is a need for the provinces at both sides of the border to play a bigger role than today. Yunnan's development strategies and plans need to fully incorporate initiatives to benefit from such regional cooperation potential.

The Asian Development Bank (ADB) has played an active role in facilitating economic cooperation among the GMS countries. ADB has invested more than $5 billion in projects to support the GMS Program. I also note that the GMS countries have recently endorsed the Regional Investment Framework (2013-2022), which contains an investment pipeline of over $50 billion involving various development partners including private sector contributions.

ADB has a long history in Yunnan. The first loan to Yunnan supported forestation in 1994. Since then, ADB has been active improving transport connectivity within the province as well as with neighboring provinces in China and GMS countries. For example, the construction of expressways from Chuxiong to Dali, from Yuanjiang to Mohei, from Baoshan to Longlin, from Kunming to Wuding, and from Longling to Ruili help Yunnan connect to the GMS economic corridors. Similarly, the construction and upgrade of feeder and rural roads facilitate access to the main highways contributing to poverty reduction in rural areas. ADB has also provided assistance to improve water supply infrastructure, power transmission, and railway links. To date, ADB has provided about $1.62 billion in loans and grants to Yunnan.

In addition to the GMS initiative, I acknowledge China's central government efforts to intensify new initiatives for regional cooperation, in particular the Bangladesh, China, India and Myanmar (BCIM) Economic Cooperation.

The challenge is in front of us. ADB is ready to support Yunnan to strengthen inter-subregional connections with Southeast Asia and South Asia. I look forward to working with the Yunnan provincial government and the governments of the GMS countries to deepen cooperation in this new development context.