Despite its inland location, Kunming is poised for explosive growth over the next 10 years and if its development strategies are successful, the city will become one of the most important trade and economic hubs in China and Asia. Due to its remoteness, Kunming had in the past been overlooked as an economic backwater for most of the last three decades, but that was before trade with Southeast Asia and China's domestic tourism industry took off. Kunming is now the epicenter of both.

Kunming is currently being positioned by provincial and national leaders to serve as the main commercial and financial hub for the China-ASEAN (Association of Southeast Asian Nations) Free Trade Area (FTA). China and ASEAN member countries signed an agreement to create the world's largest free trade zone with a population of 1.8 billion people and which will go into effect in 2010.

Infrastructure improvements already underway are indicative of the expectations Beijing has for Kunming's near future: Kunming will have a new airport in 2010 that will be China's third-largest; a new international highway is being built to connect Kunming with Singapore; rail links connecting Kunming to Southeast Asia are being built or expanded; and most recently it was announced that India and China are going to rebuild the Stilwell Road which will connect Kunming with Ledo in northeast India's Assam state.

In a few short years, Kunming will have direct land links to Singapore, Bangkok, Kuala Lumpur and Hanoi. It will also be the only Chinese city with a land link to India, one of China's fastest growing trade partners. Those are just the biggest projects. A citywide road improvement project is underway. Kunming, which is currently comprised of four urban districts inhabited by five million people, intends to add two new districts and grow to eight million residents by 2010. There are going to be significant opportunities for foreign businesses should this ambitious plan come even close to being realized.

Kunming used to be one of the more difficult major cities in China for foreign businesses to invest. Getting things done in Kunming is still not as easy as it is in Shanghai or other boomtowns in China, but the city's momentum is aimed in the right direction. The last few years have witnessed a growing keenness on the city government's part for foreign investment. Not long ago one had to have quite a lot of money to register a company in Kunming. Today the city has granted wholly foreign-owned enterprise (WFOE) status to foreigners investing as little as US$35,000. WFOE status allows foreigners to operate in China without the previously required joint venture partner.

By the end of 2006, Kunming had realized GDP of 120.3 billion RMB, up by 12.3% over the previous year, maintaining an annual economic growth rate of over 10% for 4 consecutive years. The city's comprehensive economic power ranks 48th among all Chinese cities and its fixed capital investment reached 65.4 billion RMB.



Economic Contribution Ratios by Sector
In 2006, the economic contribution ratio to GDP of the primary sector including agriculture, forestry, animal husbandry and the fisheries was 6.8%; the contribution ratio of the secondary industries including manufacturing and the value added sector was 46.7%; and that of the tertiary industries was 46.5%.

Foreign Trade Overview
In 2006, Kunming' total import/export volume was US$4.7 billion, an increase of 36.4%, of which export volume reached over US$2.3 billion and import volume amounted to over US$2.3 billion, providing for very balanced trade. Major exports include nonferrous metals, inorganic chemicals, tobacco and tobacco products, vegetables and fruits, iron and steel, equipment, vehicles and plastics. Kunming' major export trade markets were ASEAN member States, Hong Kong, Japan, Europe and North America.

Foreign Trade and Cultural Ties
Kunming holds the annual Kunming Import and Export Commodities Fair at the Kunming International Convention and Exhibition Center to attract foreign investment. It is one of Asia's biggest trade fairs and attracts over 5,000 foreign buyers from 40 countries each year. Kunming has also twinned with 10 cities from different countries and/or regions including Japan, Switzerland, Morocco, the USA, Australia, Bolivia, Thailand, Myanmar (Burma), New Zealand and Bengal.