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Kunming

kunming

Kunming is the capital of Yunnan, a province in China’s southwest that borders Tibet, Myanmar, Laos, and Vietnam. Traditionally a low economic performer in China, the city made rapid advancements following the launch of the government’s “Go West” policy in 2000 and the ASEAN-China Free Trade Area (ACFTA) agreement in 2005.

Positioned near the border with several Southeast Asian countries, Kunming was and remains a major beneficiary of these two initiatives; it provides transportation and trade links to Vietnam, Burma, and Laos. It is also a regional transportation hub, with a network of highways and railways that connect to other major cities in China. The Kunming Changshui International Airport was ranked seventh in China for passenger traffic and ninth for freight traffic in 2014.

Kunming has a population of more than 6.4 million and holds jurisdiction over six districts, one county-level city, four rural counties, and three autonomous counties. It is now one of four major cities in southwest China alongside Chengdu, Chongqing and Guiyang.

In 2014, Kunming’s GDP was US $56.99 billion (RMB 372.3 billion) with a per capita income of US $8609 (RMB 56,236). For the same year, imports amounted to US $6.17 billion and exports to US $11.6 billion.

Key Industries

With rich natural resources, Kunming is a key player in China’s agricultural and mineral production industries. The city’s economy is dominated by the services sector, which contributed 53.7 percent to GDP in 2014 and within which tourism is most prominent. Industry comes in a strong second, contributing 41.4 percent to the economy in 2014.

Other key industries in Kunming include tobacco, metallurgy, mechanical and electronic integration, and pharmaceuticals. The following sectors are of particular interest to U.S. exporters.

Agricultural Equipment

Yunnan province is part of an important agricultural belt in China; and Kunming is a significant horticultural center, providing products as varied as grain, wheat, horse beans, corn, potato, and fruits. The city is also famous for its floriculture and flower-growing exports. Thus, the region offers U.S. exporters an important market for agricultural equipment and equipment parts.

Currently, U.S. manufacturers hold a 43.5 percent share in China’s import market for agricultural equipment; and in 2014, the Chinese market was the sixth-largest export market for U.S. agricultural equipment (US$376.1 million). There is a significant opportunity for further U.S. imports, as the farming sector in China is transitioning from being a traditional, labor-intensive industry to one that is mechanized and dependent on high-technology. Demand for imports of broad parts and highly specialized equipment, such as milking machinery, seeders and planters, and certain tractor components, has remained strong.

Food Products

Top U.S. food exports to Kunming include nuts and dried fruits (almonds, pistachios, raisins, prunes, dried blueberries, and cranberries), beverages (coffee, coke, and juices), milk powder, jam, non-dairy cream, and mustard. These are sold widely in supermarkets and upscale retail outlets. Certain products, like California almonds and U.S. pistachios, have name recognition and are widely distributed.

Kunming imports U.S. beef, frozen seafood, and chicken. Chicken’s feet, which is typically not consumed domestically in the U.S., is the cheapest and most large-scale export to the region. The biggest competitor to the U.S. comes from North China, which has abundant poultry farmland, although inland logistical costs are high. Guangzhou is a popular import point for U.S. poultry, from where it can be distributed to cities such as Kunming cost-effectively.

Automobiles

U.S. auto exports hit a record for the third consecutive year in 2014, with strong demand coming out of China, Canada, South Korea, Mexico, Germany, and the Middle East. In 2014, U.S. auto exports to China were over ten times higher than in 2009. Today, the Chinese market is diversified and includes light vehicles, luxury models, and SUVs.

Within China, second tier cities like Kunming have been growing at a much faster rate than first-tier cities such as Shanghai, Beijing, and Guangzhou, presenting dynamic opportunities for U.S. exporters. Rapid economic growth translates into higher per capita disposable income, and Kunming offers an attractive consumer base given its large population and high-performing industrial and service sectors. Kunming is a particularly interesting market for automobiles due to its well-developed transport links with major Chinese cities and neighboring Southeast Asian countries.

Development Zones

Kunming Economic and Technological Development Zone

This is a state level zone with target industries including tobacco processing, machinery manufacturing, electronic information, and biotechnology.

Kunming National High-tech Industrial Development Zone

The High-tech Industrial Development Zone targets new materials, biotechnology, mechanical and electrical integration, environmental protection, information technology, and agricultural high-tech industries. Key investors are Pepsi, Gargee International Group, Microsoft, Walltech Group, BASF Group, Wilmar International Group, Air Products and Chemicals, Yunnan Baiyao Group, and Yunnan Copper.

Contact Information

U.S. Commercial Service - Chengdu

4 Lingshiguan Lu, Renmin Nanlu Section 4

Chengdu, Sichuan 610041, China

Tel: (86-28) 8558-3992/9642

Fax: (86-28) 8558-9221/3520

Email: office.chengdu@trade.gov


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