By Fu Zhengluo: "Yunnan Border Trade Flourishes--Reform and Open Policy Shows Enormous Vitality", [Beijing Guoji Jingmao Xiaoxi in Chinese, 21 June 92 p 1.]

Yunnan Province is located in China's southwestern border region. Bordering on Burma, Laos and Vietnam, it is connected with various countries in Indochina Peninsula by sea and land. It has a 4,000-km long border line with 27 counties and cities bordering on neighboring countries and with people of 15 nationalities living across the border line. Border trade has been going on, and trade fairs in particular have been attended by border inhabitants from all sides over a protracted period. With the implementation of China's reform and open policy since 1984, border trade with Burma in the western apart of Yunnan has entered a new stage of development. The improvement in Sino-Vietnamese and Sino-Laotian relations has helped promote trading between the southwestern part of Yunnan and Laos and between the southern part of the province and Vietnam.

(1) Gratifying Situation in Developing Yunnan's Border Trade in Recent Years

The form of border trade in Yunnan is multi-level. The first form is one of trade fairs attended by inhabitants on both sides of the border. Border inhabitants with proper identification cards may cross the border to attend the trade fair on the other side by paying a border-crossing fee of 30 to 50 fen at the border checkpoint. At present, some of the trade fairs are relatively large in size. According to statistics, the number of border inhabitants who attended the trade fairs in the Hekou City amounted to 50,000 during the first quarter of 1992. The second form is small transactions. It is a form of nongovernmental trade between business establishments on both sides. The great majority of the transactions are in the form of barter with the value of goods calculated on the basis of renminbi. This is the major form of the border trade in Yunnan. The third form is local governments that designate certain companies to carry out trade.

To promote border trade, the state and Yunnan Province have adopted a series of border trade policies such as adherence to the "five self principle" (the principle of relying on oneself to look for supplies, do the marketing, carry on negotiations, shoulder the responsibility for one's own profits or losses, and achieve a balanced trade development) and the adoption of a policy to give preferential treatment to 162 types of commodities by reducing their customs tariff. To promote border trade, the province has also adopted the measure of integrating border trade with general trade (foreign trade), combine commodity trade with economic, technological and labor cooperation, and linking export-oriented border trade with lateral economic ties at home.

Right now, trade between the western part of the province and Burma is the largest border trade in Yunnan. The total volume of export and import trade in Dehong Dai-Jingpo Autonomous Prefecture which includes the ports of Ruili and Wanding reached 1.3 billion yuan during 1991, accounting for 80 percent of Yunnan's total value of import and export goods (1.64 billion yuan of which export goods amounted to 950 million yuan and imported goods totalled 690 million yuan).

Yunnan's primary export commodities to Burma are textiles, accounting for 70 percent of the total export value. Next on the list were articles of daily use (such as batteries, matches, detergents and rubber shoes) as well as food, beverages, household electric appliances, rolled steel, cement and so on. The primary import commodities to Yunnan are jewelry and jadestone which account for 30 percent of the total imported merchandise. Next on the list are lumber, rattan, marine products, bean, sesame, peanuts and so on.

With the development of border trade, Yunnan has also begun to strengthen its economic and technical cooperation with Burma and Laos. Negotiations have been actively carried on for projects such as sending workers abroad to help fell trees, grow cotton, excavate mines, and run cement factories and workshops for the repair and assembly of motor vehicles and tractors.

(2) Border Trade Spurs Overall Economic Development of Port Cities

The two cities of Ruili and Wanding which border Burma are designated by the state as ones open to foreign countries. Due to their favorable geographical locations and convenient transport facilities, the border trade in the vicinity of these two cities is developing rapidly. All this has spurred the overall economic development of the two cities.

Ruili is close to Burma's Muse Township. The peoples in the two countries have maintained close ties and continuously developed their relations of friendship and good-neighborliness since ancient times. After the Burmese Law and Order Restoration Council took over Burma's political power on 18 September 1988, it has paid even greater attention to promoting border trade and stepped its efforts in building the Muse Township. Now, there is an attractive China-Burma street with well laid-out stores.

Since the Third Plenary Session of the 11th National CCP Committee, the border trade in Wandin City has flourished. The total volume of imports and exports in 1978 was only 1.8 million yuan. It increased to 30.89 million yuan in 1985, and reached 277 million yuan in 1991. The number of commercial establishments engaged in border trade has already increased from 16 in 1985 to 53 in 1991, which included six companies from other provinces.

Due to the vigorous development of border trade, tax revenues from various sources are also increasing. The continuous increase of revenues in Wandin City has provided abundant financial resources for the promotion of the overall economic development.

In short, the development of border trade has spurred the overall economic development in Ruili and Wanding. It has played an important role in benefiting the nation, helping people become well-to-do, enhancing friendship with neighboring countries and maintaining peace and security in the nation.

(3) Great Potential in Developing Border Trade

Although the economic foundation of Yunnan's three neighboring countries is still weak and their purchasing power is somewhat limited, these countries have rich soil, good climate, abundant resources in agriculture and forestry as well as plentiful mineral, marine and tropical resources. Via these three countries, Yunnan may enter the vast market in various other countries in the Asian-Pacific Region. Many of the products in Yunnan cater to the needs of the consumers in neighboring countries. In addition, industrial products in Yunnan are rated high quality by neighboring countries. Economically, China and its neighboring countries compliment each other. At present, both China and its neighboring nations are implementing the policy of opening to the outside world. All sides have the desire to strengthen their cooperation in economic affairs and trade. Although various nations are still not so abundant in foreign exchange, they may still expand their trade and economic and technical cooperation in various flexible ways such as barter and compensation trade. As for future prospects, there is great potential in developing the border trade between Yunnan and its three neighboring countries.

Naturally there still exist some problems in doing border trade in Yunnan. For example, Yunnan has had a trade surplus with Burma for years while the Burmese currency has devaluated on a large scale in recent years. All these factors have affected the economic benefits of the commercial establishments. In some commercial sectors, there are signs of lowering prices in selling products and of offering higher prices in procuring goods in an effort to defeat competitors. Efforts must be made to strengthen macromanagement. The issue of communication and transport remains an important factor in hampering the development of border trade. Some highways, railways and bridges essential to the development of border trade remain to be repaired or improved. These problems have drawn attention from the Yunnan Provincial government and the governments of various autonomous prefectures and cities. The governments at all levels are adopting various measures to overcome the difficulties in the course of making progress. We believe that under the correct guidance of the central government in quickening our pace to carry out the reform and open policy, Yunnan's border trade will continuously reach a new height.