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By  Writers Yao Yuan, Li Meng and Li HuaiyanKUNMING, June 9 () -- For Sun Yunhua, the country roads of Yunnan not only take him home, but also reveal a thoroughfare toward prosperity.After running a furniture business in Laos for many years, the Yunnan-born businessman has decided to enter the floral and tourism industries back in Yunnan, as he senses a business boom taking off in his home province in southwest China."China has launched a strategy to build Yunnan into a gateway for South and Southeast Asia, which will bring more favorable and open policies to the province," Sun says.Sun's optimism is shared by 35,000 businesspeople from 31 Asian countries and regions attending the ongoing China Kunming Import & Export Fair (Kunming Fair), where they have clinched 179.1 billion U.S. dollars in contracts on investing in Yunnan's mining, energy, tourism and infrastructure sectors.Despite the economic slowdown China is currently experiencing, Chinese and foreign entrepreneurs are eyeing new opportunities as the country has pledged to expand the opening-up of its southwestern border regions.Although it is an area long marked by poverty, southwest China is nevertheless believed to have huge yet untapped potential. It is also geologically close to South Asia and Southeast Asia -- regions China is looking to boost trade with in order to buffer the effects of waning Western demand.Massive infrastructure projects are currently in full swing to complete the transport and logistic networks in Yunnan, which positions itself as the "bridgehead" on the opening up of southwest China.Construction has begun on 12 railroads connecting Yunnan with other parts of China as well as Myanmar, Laos and Vietnam, and these projects are "making progress," said Li Jiming, vice head of the Commercial Department of Yunnan.Yunnan is also building a financial center to facilitate trade between China and South and Southeast Asia. Last year, 85 percent of local companies in the import and export sector got approvals to settle their foreign trade using renminbi, or yuan, China's currency.Favorable winds are also blowing throughout other southwestern provinces and autonomous regions, including Guangxi and Guizhou, where officials have promised favorable investment conditions."Guizhou has rolled out new measures on land supply, tax reduction and support services, which are all to better serve our investors," Meng Qiliang, vice governor of Guizhou, said at the fair.FROM BACKWATER TO BONANZABesides the need to boost the local economy, experts say the goal of sustaining rapid growth nationally is also prompting China to develop its southwest regions at a faster pace.China's GDP growth eased to 8.1 percent year-on-year in the first quarter of 2012, down from 8.9 percent in the fourth quarter of last year and marking the weakest pace in nearly three years.With the country's urban real estate sector in the doldrums and manufacturers in eastern China distressed by surging costs and an energy crunch, analysts say the government has to look beyond the wealthy coastlines for new power engines.Central China, with its mature infrastructure, low labor costs and a rising market, has already been designated as a hot spot for foreign investment and industrial transfers from the coastal areas.However, in mountainous southwest China, where natural and human resources are abundant, poor infrastructure and a lack of modernization have long curbed efforts to buoy the local economy, says Wu Conghu, a researcher with the Yunnan government.About 100 years after the first railway was built in Yunnan to link it with Vietnam, the province has rail lines in only 7 of its 16 cities and prefectures, ranking it the second-least-developed Chinese province in terms of railway connectivity, Wu says.Its utilization of water resources and the urbanization level are also far below the national level, he adds.But such backwardness has left huge space for development, and heavy investment in the region can benefit the economy of the entire country, says Xiao Xian, vice president of Yunnan University."The development of the southwest will bring access to its enormous natural resources, boost infrastructure construction and bolster a range of industries," says Wang Chongli, a researcher at the Yunnan Academy of Social Sciences.Wang said the "advantage of backwardness" also means that the southwest will rise more quickly than many have imagined."China has gone through 30 years of opening up and industrialization, amassing enormous experience and capital that the southwest can draw from to ensure a smoother and healthier path of development," Wang says.REGIONAL COOPERATIONAt the Kunming Fair, officials and entrepreneurs from other Asian countries are also showing support for the opening up of China's southwest, through which their goods can more easily enter the Chinese market.Myanmar Ambassador to China U Tin Oo said at a Thursday conference that infrastructure projects in the Greater Mekong Sub-region (GMS), including the Kunming-Singapore railway, would "definitely enhance cooperation among GMS countries.""I believe that connecting Yunnan with GMS countries by strengthening and facilitating trade and investment connections will generate endless opportunities among GMS countries," says Admiral Thomrat Hatayodom, vice chairman of GMS Business Council.Last year, China's bilateral trade with the Association of Southeast Asian Nations (ASEAN) topped 362.9 billion U.S. dollars, marking a 23.9-percent rise year on year, while its trade with South Asia also increased by 20 percent year on year in 2011.The bustling trade and complicated political situations in Asian regions have prompted China to strengthen economic ties with these countries by developing the country's southwest.In 2010, China launched the Bridgehead Strategy to build Yunnan, which borders Myanmar, Laos and Vietnam, into a social and economic corridor toward South Asia and Southeast Asia.But unlike eastern China, where the economy relies on investment and demand from the Western world, experts say China's southwest must "go out" and lift its neighbors to affluence before its own economy can take off.To this end, China must encourage its companies to invest in these Asian countries, increase imports from them and take the lead in building shared infrastructure, such as cross-border railways, experts say."What the southwest mainly opens up to are the less-developed countries in South Asia and Southeast Asia, and China can not perfect itself while leaving its trade partners behind," Wang Chongli says.
Two workers unloading tomatoes at a stall in a supermarket in Beijing. Most retailing giants in China have implemented direct purchase plans either by working with farmers' cooperatives or setting up growing bases.(Photo:China Daily)By Tang ZhihaoBEIJING, Feb. 13 (net) -- For Zhang Youhai, a 33-year-old pomelo grower in Meizhou, Guangdong province, one of his happiest memories of 2011 was having all his produce sold through the government's farmer-supermarket direct purchase program at an early negotiated price. Many other individual growers suffered from a fall in prices.The Year of the Rabbit was good for pomelo growers in terms of output. The annual output of the citrus fruit in Meizhou was about 400,000 tons, an increase of 20 percent from 2010.However, farmers' incomes did not rise alongside the growth in output. The increasing market supply and lower demand in the global market triggered competition among growers and the retail price went down significantly.The price at the end of 2011 was about 2 yuan (32 cents) a kilogram, a drop of 50 percent from August 2011."We had good expectations for the market performance in August. We never expected the price to drop so significantly," said Zhang. "The growing cost for a kilo of pomelos is around 2 yuan. The price drop meant some pomelo growers earned nothing for the whole year of 2011."Zhang, whose family has grown pomelos for more than 20 years, did not suffer from the competition thanks to the farmer-supermarket direct purchase plan, which allowed him to sell 75,000 kilos of pomelos at 3.64 yuan a kilo, much higher than the average prices.Zhang said some of his pomelos are sold to consumers through global retailing giants' distribution channels including CP Lotus Supermarket, which is a subsidiary of Thailand-based Charoen Pokphand Group."I signed a contract to sell all my pomelos to a fruit trading company at a fixed price. The company acted as a channel in the direct purchase plan in Meizhou. They buy our pomelos and sell them to supermarkets. My task is to supply enough pomelos at the end of 2011 to fill the orders," said Zhang.It was the first year Zhang had joined the direct purchase plan. In previous years he said he would have had to join in price wars either to sell his pomelos or lose out in poor market conditions."I think I will stick to this direct purchase plan because it provides us with a guarantee in all situations," added Zhang.The farmer is one of many in Meizhou who have benefited from the farmer-supermarket direct purchase plan, which was set up by the central government in 2008. Initiated by the Ministry of Commerce, the plan is designed to guide farmers, strengthen connections, promote distribution channels and guarantee food safety. It is also a way to help farmers increase their income and reduce intermediaries to stabilize prices at a time of high inflationary pressure."Urbanization has increased demand for agriculture products significantly in large cities and the development of agriculture technology and new farming skills have boosted the supply of farm produce."Poor information distribution channels and unstable retailing channels led to many agriculture products failing to be delivered to consumers in the most economic and effective way, and that caused significant problems for both consumers and farmers," said Liu Shijia, vice-president of China Agriculture Wholesale Market Association. "It is necessary for farmers to promote their products and develop more ways to boost sales."Now most retailing giants in China have implemented direct purchase plans either by cooperating with farmers' cooperatives or setting up growing bases.In June, Carrefour SA China signed a strategic memorandum with the Ministry of Agriculture to improve the existing plan. The French retailing giant is providing training to farmers to improve quality and guarantee food safety. More partnerships are being planned.Shanghai-based Hualian supermarket said that it would add five production bases to its direct purchase program and increase the direct purchase volume by 1,500 tons of farm produce in 2012. However, the direct purchase model is not perfect and it still needs to be improved, industrial experts said.At a time when more and more farmers are enjoying the benefits of direct purchase plans, experts say total revenue generated from them only accounts for a tiny part in the whole agriculture marketing system. Many farmers still find their products cannot be sold at good prices. Implementing the process is still challenging."Many farmer-supermarket direct purchase programs across the countryside are not carried out in the manner anticipated," said Liu Yutao, the deputy director of the Agriculture Bureau of Meizhou. "Some local governments or institutions simply tried match retailers with farmers. They did not really solve the problems at the heart of the plan."Liu said it is quite important to have an agent to link the supermarkets and farmers."Agriculture production in China involves millions of rural households and their respective production scale is small so there should be an agent between the vast fields and urban supermarkets because I believe sufficient supply is the key to maintaining the long-term success of the plan," said Liu.(Source: China Daily)
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