Today the prime ministers of China, Laos, Myanmar, Thailand, Cambodia and Vietnam and the head of the Asian Development Bank formally inaugurated the final link of the so-called "north-south economic corridor", a 1,800-kilometer (1,100-mile) road network connecting Kunming with Bangkok.

The former opium smuggling route which now links the Greater Mekong Subregion (Yunnan, Myanmar, Thailand, Laos, Vietnam and Cambodia) - or GMS - will dramatically improve road connectivity in one of Asia's most pristine and poorest regions. China is expected to send more tourists to the area while also bringing in natural resources and other commodities from Southeast Asia to feed its ravenous economic boom.

While speaking at the GMS summit, Chinese Premier Wen Jiabao (温家宝) called on GMS members to work together to improve the region's transport infrastructure, streamline transport and trade and increase rural development.

The road network is expected to increase Chinese investment in the region – especially in Laos, where the government has given a Chinese company a 50-year lease for a major tract of real estate near the Laotian capital of Vientiane in exchange for the building of an athletic stadium. Another Chinese company has been given 30-year rights to construct and run a large casino compound.


According to a Xinhua report, trade in 2007 between Yunnan province and the 10 member states of the Association of Southeast Asian Nations (ASEAN) reached US$3.03 billion, up nearly 40 percent over 2006.

Recent rapid growth of trade with ASEAN has made the region Yunnan's largest trading partner. According to Kunming customs statistics cited in the report. Yunnan's exports to the region were up 32.9 percent, reaching US$2.17 billion.

Yunnan is preparing to serve as China's gateway to ASEAN as the two emerging economic regions prepare for the China-ASEAN Free Trade Area (CAFTA), the first phase of which will launch in 2010. CAFTA will reduce and eliminate tariffs on goods moving between the two regions, creating the world's largest free trade area in terms of population.

GMS summit image: Xinhua

Laos highway image: International Herald Tribune

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The highway linking the town of Xinjie in Hekou County in southeastern Yunnan province with Lao Cai province in northern Vietnam was opened yesterday, marking completion of the first highway linking Yunnan with a neighboring country from the Association of Southeast Asian Nations (ASEAN).

The 56.3 kilometer, 3.58 billion yuan Xinhe highway is one of the numerous infrastructure projects that will increase connectivity between Yunnan and ASEAN and facilitate the transport of people and goods between the two regions, which are expecting to see a major increase in tourism and trade in the coming years.

Yunnan is preparing to serve as a main gateway for trade between China and ASEAN, especially after the launch of the first phase of the China-ASEAN Free Trade Area (CAFTA) in 2010. CAFTA will be the world's largest free trade area in terms of population, with more than 1.8 billion people.

In 2007 trade between Yunnan and ASEAN grew nearly 40 percent year-on-year, totaling more than US$3.03 billion. Yunnan exports to ASEAN states reached US$2.17 billion last year, with Vietnam replacing Myanmar as Yunnan's top trading partner.

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Trade in 2007 between Yunnan province and the 10 member states of the Association of Southeast Asian Nations (ASEAN) reached US$3.03 billion, up nearly 40 percent over 2006, with Vietnam replacing Myanmar as the province's top trading partner, according to a Xinhua report.

Recent rapid growth of trade with ASEAN has made the region Yunnan's largest trading partner. According to Kunming customs statistics cited in the report. Yunnan's exports to the region were up 32.9 percent, reaching US$2.17 billion.

Yunnan – bordered by Myanmar, Laos and Vietnam – is being groomed by the Chinese government to serve as China's gateway to ASEAN as the two emerging economic regions prepare for the China-ASEAN Free Trade Area (CAFTA), the first phase of which will launch in 2010. CAFTA will reduce and eliminate tariffs on goods moving between the two regions, with analysts expecting raw materials and natural resources to flow into China and finished products to flow out.

Major road, rail and air transport infrastructure projects in Yunnan and its Southeast Asia are currently underway to further facilitate trade with ASEAN. Some of the more notable projects include a highway linking Kunming with Singapore, a rail network linking Kunming and Singapore via three trunk lines passing through Myanmar, Laos, Thailand, Vietnam, Cambodia and Malaysia, a new international airport in Kunming and a road/rail transport corridor linking Kunming with Haiphong, Vietnam – the closest seaport to Kunming.

Last month the Asian Development Bank announced its largest-ever financing project, a US$1.1 billion highway project that will connect Vietnamese capital Hanoi with Yunnan.

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China: More than just Shanghai and Beijing

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Last weekend in Beijing the State Council's Office for Western China Development announced that this year ten major development projects with an investment of more than 151.6 billion yuan were being launched across western China. Of the ten major projects, two are located in Yunnan.

This year work has begun on the new Kunming international airport which is projected to be the third- or fourth-largest in China upon completion in four or five years. Once operational, the airport is expected to greatly enhance Kunming's international connectivity via new routes to Europe, North America, South Asia and Australia.

The other main project in Yunnan underway as of this year is the Dali-Ruili railway, which will extend the existing Kunming-Dali line through Baoshan to Ruili, in western Yunnan on China's border with Myanmar. The line is part of the rail network that will connect Yunnan with major cities in Myanmar, Laos, Vietnam, Cambodia, Thailand, Malaysia and also with Singapore. The regional rail network is projected for completion by 2015 and is expected to play a major role in the upcoming China-ASEAN Free Trade Area (CAFTA).

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China is planning to invest more than 50 billion yuan (US$6.3 billion) in new railways that will increase connectivity between Kunming and cities in southern Yunnan by 2010, according to a Xinhua news report.

Aside from boosting tourism and trade between Kunming and southern Yunnan cities including Ruili and Mengzi, the new rail lines will also form the northernmost portion of the planned 5,500-km Trans-Asia Railway, which will link Kunming and Singapore via three rail lines passing through Myanmar, Laos, Vietnam, Thailand, Cambodia and Malaysia.

Construction of the line that will eventually connect Kunming to Vietnamese capital Hanoi has already begun between Yuxi and Mengzi. The Asian Development Bank has recently approved a US$60 million loan to Vietnam to renovate the 285 km of railway connecting northern Hanoi to the Yunnan border at Hekou.

Preparations have begun for work on the other two lines, which will connect Yunnan to Myanmar and Laos via border towns Ruili and Mohan, respectively. The 366-km section from Dali to Ruili will cost around US$1.2 billion and is expected to be completed by 2010.

The railway will facilitate trade within the China-Association of Southeast Asian Nations (ASEAN) Free Trade Area, the first phase of which will be launched in 2010. By 2015, all members of ASEAN - which in addition to the Trans-Asia Railway countries also includes Indonesia, Brunei and the Philippines - will have entered the 1.8 billion-person free trade area.

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Dancing in Nanning: China and ASEAN

It's been a busy week in the courtship between China and the Association of Southeast Asian Nations (ASEAN). Malaysia announced that it is donating used rail tracks worth more than US$2 million to Cambodia to expedite completion of a China-ASEAN railway network that will connect Kunming with Singapore.

On Monday the first shipment of tracks left Malaysia for northwest Cambodia, where they will be used to fill in a 48-kilometer (30 mile) stretch of missing rails.

The US$15 billion rail network will cover 5,000 kilometers (3,000 miles) and will connect Kunming to cities and towns in Myanmar, Laos, Vietnam, Cambodia, Thailand and Malaysia, as well as to Singapore. The project is expected to be completed by 2015, by which time China and all the members of ASEAN will have entered the China-ASEAN Free Trade Area. With 1.8 billion people the FTA will be the world's largest economic bloc in terms of population.

Meanwhile, in neighboring Guangxi Zhuang Autonomous Region, the China-ASEAN Business and Investment Summit was held in the capital city of Nanning. Trade between China and ASEAN member countries, which also include Brunei, Indonesia and the Philippines has been growing more than 20 percent annually since 1991.

One of the major announcements at the summit was a plan for US$5 billion in preferential loans by the Chinese government to assist Chinese enterprises in establishing joint venture operations in ASEAN states.

China-ASEAN trade in 2005 totaled US$13 billion. At the Nanning summit, Chinese Premier Wen Jiabao said he expected trade volume between China and ASEAN to reach as much as US$200 billion by 2010.

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