What role is Yunnan playing as China looks to Asean for more food?

Province’s agricultural imports from largest trading partner up 26.5% in first quarter of this year

As rising global uncertainties prompt China to diversify sources of imported food, its Southeast Asian neighbours are becoming increasingly viable suppliers thanks to overseas investment and cooperative farming initiatives, experts say.

Yunnan, the southwestern Chinese province bordering Myanmar, Laos and Vietnam, plays a key role in regional agricultural cooperation.

Its involvement dates back decades to the “alternative crop cultivation programme”, which aimed to reduce opium production in the region by sharing agricultural technology and promoting sustainable economic alternatives.

“These neighbouring countries may be relatively weak as consumption markets but they possess land resources that could be utilised for planting and production,” said Feng Lu, a professor of agricultural economics and management at Yunnan Agricultural University.

Given China’s large demand for agricultural products and limited amount of farmland, overseas agricultural investment and cooperation could serve as an effective way to support the country’s food security by diversifying its food supply sources, she said.

As living standards have risen, Chinese food consumption patterns have changed significantly, with a decrease in staple foods and an increase in meat, dairy, fruits and vegetables, Han Yang, an agricultural researcher at the State Council’s Development Research Centre, said in an Economic Daily article published in February.

That meant China needed to diversify its food supply sources, including by encouraging overseas investment and building a complete supply chain from production to trade, Han said.

In the first quarter of this year, Yunnan’s agricultural imports from Association of Southeast Asian Nations (Asean) member states were worth 3.22 billion yuan (US$446 million), up 26.5 per cent year on year, according to official data.

Customs data shows that Asean has been Yunnan’s largest trading partner for the past 20 years.

Growing trade and an improved transport network have also encouraged investment in market facilities in Yunnan.

For local logistics service providers, with the increasing volume of agricultural trade, the growth in logistics demand has exceeded their expectationsFeng Lu, Yunnan Agricultural University

Construction of a new fruit trading and processing market began in Kunming, the provincial capital, last month. Designed to further connect Asean and Yunnan, it is expected to open in April next year.

With a projected annual transaction value of over 40 billion yuan, the market aims to act as a new fruit industry centre in southwest China.

In addition to importing tropical crops, Yunnan is also exporting agricultural produce, ranking first among China’s provinces last year for exports of fresh flowers, coffee and tobacco.

“For local logistics service providers, with the increasing volume of agricultural trade, the growth in logistics demand has exceeded their expectations,” Feng said.

She also highlighted ongoing challenges related to overseas cold-chain transport and storage, saying the university had submitted proposals to the provincial government calling for the development of more international cold-chain transport services and the construction of overseas cold storage facilities.

A direct cross-border freight route connecting Kunming with the Laotian capital Vientiane and the Cambodian capital Phnom Penh went into operation in the last week of April. It is expected to reduce one-way transport times by 40 per cent to six to eight days, Xinhua reported.

Advance customs declaration and electronic seals allow trucks on the new route to adopt an end-to-end logistics approach that avoids the need for repacking and the opening of containers, significantly improving transport efficiency and reducing spoilage and deterioration of perishable products during cold chain transport.

The Laos-China Railway, which has been in operation since 2021, launched a special cold-chain train service in October to facilitate the transport of fresh food between Southeast Asia and China.