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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Tags: ASEAN, Asian Development Bank, business, CAFTA, foreign trade, Haiphong, Hanoi, Laos, logistics, Myanmar, Singapore, Vietnam