Introduction
Yunnan is the most southwestern province in China and borders the Guangxi Zhuang Autonomous Region and Guizhou Province in the east, Sichuan Province in the north, and the Tibet Autonomous Region in the northwest. It shares a 4,060 km border with Vietnam, Laos and Burma, and is connected to Thailand and Cambodia by waterways.

Yunnan has a relatively large number of ethnic groups living in the province. Among the country’s 56 ethnic groups, 25 are found in Yunnan. These include the Yis, Bais, Hanis, Zhuangs, Dais, Miaos, Lisus, Huis, Lahus, Vas, Naxis, Yaos, Tibetans, Jingpos, and Blangs.

Economic Overview
In 2006, Yunnan’s GDP amounted to RMB 400.2 billion, 11.9% over 2005. Total value-added industrial output increased by 16.9% to RMB 171.0 billion, accounting for 42.7% of the province’s total GDP. Figure 12.12.1 shows the share of GDP held by the different sectors. Industry contributes the most to the economy, holding a 42.70% share of the GDP. The service and agricultural sectors contributed 38.50% and 18.80% to the province’s GDP respectively.

In 2006, the province’s total fixed asset investment stood at RMB 222.0 billion, an increase of 26.5% from the previous year. Within this figure, urban fixed asset investment reached RMB 192.4 billion, 27.0% higher than 2005.

Table 12.12.1 shows the five industries that have the highest fixed asset investment. Production and supply of electricity, gas and water had the highest amount of fixed asset investment, with investments of RMB 46.1 billion in 2006. The other four industries with substantial investments in fixed assets were transport, storage and post, real estate, manufacturing, and water, environment and public facilities management.

The province’s retail sales of consumer goods rose by 14.9% to RMB 118.9 billion in 2006. The largest consumer center of Yunnan is in Kunming and a number of foreign retail enterprises have invested in Kunming’s growing consumer market. These include Wal-Mart from the U.S., Carrefour from France, Price-Mart and Trust-Mart from Taiwan.



Agriculture
Yunnan is one of China’s largest forest zones. Its forest area accounts for 24.2% of the country’s total. The province also yields a large number of plant and animal species, and these lay the foundation of its Chinese medicine and food industries. The output of flowers, tea leaves, fruits and vegetables in the province are also very famous. In 2006, the output of fruits and tea reached 1.6 million tons and 138,200 tons - 19% and 19.2% higher than 2005 respectively.

Industry
Yunnan is one of the major production bases for copper, lead, zinc, tin and aluminum in China. Gejiu city is well known as “the Kingdom of Zinc” with its reserves ranked first in the country. In addition, reserves of germanium, indium, zirconium, platinum, rock salt, nickel, phosphate, arsenic and blue asbestos are also high. In 2006, the production of the 10 main types of non-ferrous metals stood at 2.1 million tons, up 40.6% over 2005.

Tobacco is the biggest industry in Yunnan. In 2006, flue-cured tobacco production amounted to 757,800 tons, down by 2.0% from the previous year.

The electricity industry is another important economic pillar of Yunnan, playing a crucial role in the “West-East Electricity Transmission Project”. In 2006, electrical generating capacity reached 75.4 billion kilowatt hours, an increase of 20.7% from the previous year.

Services
The transport sector in Yunnan has maintained a steady development. Yunnan has more than 1,700 kilometers of railways (the Guiyang-Kunming, Chengdu-Kunming, Kunming-Hekou and Mengzi-Baoxiu railways) and a highway network of 44,000 kilometers. The Jinsha, Nanpan, Yuanjiang and Lancang rivers are also navigable by boat.

Telecommunications and postal services developed rapidly in Yunnan. In 2006, the volume of postal services reached RMB 0.9 billion, 15.4% higher than in 2005, while the volume of telecommunications amounted to RMB 34.1 billion, 29.3% higher than in 2005.

Yunnan has rich tourism resources including beautiful landscapes, colorful ethnic customs and a pleasant climate. Its most popular tourist spots include Kunming, Dali, Lijiang, Xishuangbanna and Shangri-la.

Table 12.12.2 shows the number of domestic and foreign tourists and the revenue generated by them. Domestic tourists dominate the tourism industry in Yunnan with 77.2 million tourists visiting the province in 2006. Overseas tourists also come in great numbers, with 3.9 million visiting the province in the same year. These tourists brought in revenues of RMB 49.9 billion and US$658.0 million respectively. In terms of revenue growth, revenue from overseas tourists has grown by 24.7% - higher than the growth rate of domestic tourism revenue, which was at 16.7%.




Foreign Trade and Foreign Investment
Yunnan’s foreign trade amounted to US$6.2 billion in 2006, 28.4% higher than in 2005. Exports amounted to US$3.4 billion, up 28.4% from the previous year. Major exports included chemicals and related products, base metals and related products, tobacco, vegetables, fruits, and cereals. ASEAN is the province’s largest trading partner.

In 2006, imports reached US$2.8 billion, 35.1% higher than in 2005. Imports were mainly minerals, machinery and electrical appliances, electronics, and telecommunications equipment. Major import sources included Hong Kong, the EU and Myanmar. Total utilized FDI amounted to US$300.0 million in 2006. The largest investment was in manufacturing, which accounted for 30.5% of the total actual utilized FDI. Other areas include production and supply of electricity, gas and water, business services, and mining and quarrying.

Hong Kong is the largest source of foreign investment in Yunnan. By the end of 2006, Hong Kong had invested in a total of 1,160 projects and its construal amounts reached US$2.4 billion. Hong Kong companies such as New World invested in the development of Chinese medicine in Yunnan. Other major investors are Singapore, the U.S., the Virgin Islands and Taiwan.

Major Development Zones
The Kunming Economic and Technological Development Zone (KETDZ), was first established in 1992 and was approved by the State Council in February 2002 to become the only state-level development zone in Yunnan. It is located in the east of Kunming City with a total area of 55.7 sq km.

The KETDZ developed flourishing industries including tobacco processing, optical-mechanical-electrical integration, electronic information industry, bio-food-processing and bio-pharmacy. In 2006, the zone’s GDP reached RMB 4 billion, 24.3% higher than in 2005. Total foreign investment amounted to US$31.4 million with 22 foreign invested projects.

Education
The province’s higher education sector maintained a steady growth in 2006. At the time, it had 50 universities and the number of students graduating from higher educational institutions stood at 63,600, representing an increase of 33.2% from 2005. Yunnan University, a key university in the province, has more than 80 years of history and is one of the earliest comprehensive universities in Western China.


Major Cities in Yunnan

Education
There were 55 colleges and universities in Guangxi by the end of 2006, with 82,300 graduates and 387,400 students on campus. Guangxi University, a national key university in the Guangxi province, was set up in 1928 in Nanning. Presently, it has 20 schools, 3 key laboratories at the ministerial level, 1 national key laboratory base at the ministerial level and 2 key experimental centers at the provincial level. Other universities, such as Guangxi Normal University, Guangxi Medical University and Guangxi University for Nationalities, have contributed to the fast economic development in Guangxi.

Major Cities in Yunnan
There are 14 cities in the Yunnan province. Table 12.3.3 shows the GDP, population and land area of each city.

There are 15 cities and autonomous prefectures in Yunnan. Table 12.12.3 shows the GDP, land area, and population of each of these areas.


As illustrated in the table, Kunming, the capital of Yunnan, showed the greatest economic development in 2006. With a GDP of RMB120.3 billion, its GDP is nearly twice that of the city with the second highest GDP. The following section provides an overview of Kunming, focusing in particular on the economic situation of the city.

Introduction
Kunming is the capital of Yunnan Province and is located in the central part of Yunnan. The city is known as a city of spring because of its weather. Flowers are also found here during any season.

Investment Climate
Kunming’s economy and social undertakings have made rapid progress. In 2006, the city’s GDP reached RMB 120.3 billion, 12.3% higher than in 2005.
Kunming is rich in mineral resources. Its reserves of phosphate rock, salt and metals rank top in the country. In 2006, the city’s total production of 10 kinds of non-ferrous metals reached 76,000 tons, 0.7% higher than in 2005.

The flue-cured tobacco industry in Kunming has become a pillar of its economic development. In 2006, the industrial value-add of the tobacco industry was RMB 12.3 billion, 14.2% higher than that in 2005.

Kunming is a major tourist city in China. One of the biggest draws for tourists coming to Kunming (other than the great weather and clean air) is the city’s ethnic diversity. It also has many sights worth seeing such as Green Lake Park, Bamboo Temple, Stone Forest, Kunming Botanical Gardens and the World Horticultural Expo Gardens. In 2006, the total revenue from tourism reached RMB 15.6 billion, an increase of 12.9% from the previous year.

Foreign Trade and Foreign Investment
The total foreign trade in Kunming amounted to US$4.7 billion in 2006, 36.4% higher than in 2005. Within this figure, exports increased by 34.2% to US$2.3 billion while imports increased by 38.6% to US$ 2.4 billion.

The city has granted licenses for wholly foreign-owned enterprises to foreigners investing in the city. In 2006 alone, there were 122 newly foreign-invested enterprises approved. Actual utilized foreign investments stood at US$0.2 billion, having dramatically increased by 153.3% over the previous year.

Important Travel information
Time taken to travel from Kunming Airport to: