BHUTAN L ANGLADESH Business Focus y ofBengal Yunnan - South China MYANMAR AndamanSea Kunming LAOS THAILAND KAMPUCHEA August - September 2008 | 18 Hanoi VIETNAM CHINA South ChinaSea TAIWAN Yunnan – Gateway to ASEAN PHILIPPINES BRUNEI Major construction MALAYSIA is now underway in eastern Yunnan Province MALAYSIA to complete a vast infrastructure project. A new highway linking Kunming to Hanoi, the Vietnamese capital, should be completed by SINGAPORE 2012, shortening the journey from three days to just 9 hours by truck. The Kunming - Hanoi highway is backed by a USD 1.1bn loan from the Asian Development Bank (ADB), making it the most expensive project in the ADB’s history. The German Chamber of Commerce in China Philippine Sea markets more efficiently. Moreover, the highway will allow Vietnam’s Hai Phong and Cai Lan ports to access Kunming, which significantly shortens the current route through Fangcheng Port in Guangxi. As a result, the transportation network will not only integrate both economies, but also spur growth. Vietnamese products will consist mainly of agricultural and maritime products which will quickly reach previously untapped markets in southwestern China. The upgrade of the overland route comes at an opportune time, as traffic volume on existing roads between Hanoi and the Chinese border town of Hekou has been increasing at a rate of 12% per year. Over 5.5m vehicles are expected to use the corridor in 2012, a number that will expectedly increase more than three-fold to 17m by 2022. Trade in 2007 between Yunnan and the 10 member states of the Asso- PAPUANEW GUINEA ciation of Southeast Asian Nations (ASEAN) reached USD 3bn, up Construction workers from both China and Vietnam will soon join INDONESIA forces to build the highway, which promises increased opportuni- nearly 40% over 2006, with Vietnam replacing Myanmar as the provties for the once heavily-guarded border region. Exporters in Kunming ince’s top trading partner. will be able to ship products which depend on fast access to global The Kunming to Hanoi highway project will contribute to the ambitious Asian Highway program under which 27 Asian countries have IndianOcean pledged to build a 139,200km network of roads that meet minimum uniform standards. Additional infrastructure projects in Yunnan and China’s neighboring countries are currently underway to facilitate trade with ASEAN. Some of the more notable projects include a new international airport in Kunming and a rail network linking Kunming and Singapore via three trunk lines passing through Myanmar, Laos, Thailand, Vietnam, Cambodia and Malaysia. New band • New location New competition 16-21 September. Jinhan Centre, Guangzhou (opposite China Hotel) http://oktoberfest.dayoo.com These projects propel the ambition to turn Yunnan into China’s Gateway to ASEAN. The two emerging economic regions are preparing for the ASEAN-China AUSTRALIA Free Trade Area (ACFTA), which will launch its first phase in 2010. The ASEAN-China free trade area will have a total population of 1.8bn and a combined gross national product of USD 2tn when completed in 2010. ACFTA aims to reduce and eliminate tariffs and quotas on goods moving between China and ASEAN states. Analysts expect an increase in raw materials and natural resources flowing into China and manufactured products flowing out. By 2015, China and its immediate Southeast Asian neighbors (Vietnam, Laos, Myanmar) will also impose zero tariffs on most normal products. Due to the crowd-drawing World Heritage sites Ha Long Bay in Vietnam and The Three Parallel Rivers in Yunnan, the new highway is also expected to expand cross-border tourism between the two countries. An increase in demand for tourism is expected to help the region develop a more advanced service sector. Cutting through thick jungle and scaling steep mountain slopes, construction workers act as a vanguard for intensified cooperation between China and its regional counterparts. NorthPacificO
The German Chamber of Commerce in China www.china.ahk.de 19 | August - September 2008 Business Focus