Growing Australian presence in Yunnan

Growing Australian presence in Yunnan

11 January 2019

Over the past year, I’ve been lucky to visit Yunnan five times, reflecting the growing links between the province and Australia.

Bordering Myanmar, Laos and Vietnam, Yunnan feels at first to be a blend of China and Southeast Asia, but it is much more than that. The province is home to 25 of the 56 officially recognised ethnic groups in China; these groups have lived for centuries in the mountainous terrain which runs across the borders between China and its neighbours. To this day, many ethnic Dai, Yi, Bai and other groups still have close relatives in neighbouring countries who come and go often.

Yunnan’s terrain is largely mountainous. Source: Shutterstock

Yunnan has spectacular tourism destinations such as Shangri-La, Lijiang and Dali. The provincial capital of Kunming is also interesting for its fascinating Second World War history. It was the base of the Flying Tigers, the three squadrons of American pilots that flew over the eastern end of the Himalayan Mountains (known as ‘The Hump’) from India to the part of China cut off by occupying Japanese forces to the east, bringing valuable supplies during the war years.

‘The Hump’. Source: Australian War Memorial P02018.264

In recent years, Yunnan’s economy has undergone an enormous transformation and is now among the fastest growing in China. Yunnan’s GDP in 2017 was RMB 1.7 trillion (A$ 342 billion), growing at the rate of 9.1 per cent this year. Yunnan has a bigger economy than any of its contiguous Southeast Asian neighbours.

It comes as no surprise, then, that there are increasing opportunities for Australian business in Yunnan. Austrade – which has had an office in Kunming since 2000 – has identified exports of Australian agricultural technology, health capability, food and beverage, education and tourism to be the main areas of interest.

Austrade Kunming’s Alice Guo (centre right) and Devon Li (right) with Consul-General Christopher Lim (centre left) and Consul Lance Truong (left)

There is also the potential for greater investment from Yunnan in Australia following the example of investments by the Yunnan Metropolitan Construction Industry group and the Kunming Construction Company, as well as Yunnan Tin, Yunnan Discovery Enterprise Group, Yunnan Huigu Company, Yunnan Metallurgical Group, Yinmore and Yunnan Copper.

The Yunnan Province Chief Representative has an office in Sydney to facilitate greater trade and investment links with Australia. There’s also a direct flight between Kunming and Sydney.

Agricultural cooperation

Australia has a substantial agricultural relationship with Yunnan, built over many decades by quiet achievers on both sides. For example, Australia has a longstanding relationship with the Yunnan Academy of Grassland and Animal Science, which started with an A$ 9.5 million (RMB 48 million) grant to develop a new cattle breed in 1983. Over 20 years, the Academy cross-bred imported Murray Grey cattle with local Yunnan Yellow Cattle, with Australian Brahman Cattle strains introduced later. The research efforts produced a new cattle breed: BMY cattle. The Chinese Ministry of Agriculture recognised BMY cattle in October 2014 as China’s fourth cattle category and renamed it Yunling Niu, meaning beef from the Yunnan Plateau.

Former Ambassador to China David Sadleir inspects BMY cattle in 1987. Source: DFAT

As I’ve written previously (see here), Australian company Aust-For has operated a bio-fertiliser plant and an Eco-Park Project in Wenshan in Yunnan since earlier this year. Covering 100 hectares, Aust-For's operation utilises cutting-edge Australian technology to improve agricultural productivity and sustainability. The techniques employed on the project are based on "soil to table" farming and food concepts. The site also includes a bio-fertiliser production centre and a marketplace and restaurant serving organic fruit and vegetables grown at the site.

I recently visited a large berry plantation in Jianshui county where Costa, the largest Australian berry company (in partnership with American company Driscoll), has made a substantial investment. To meet domestic market demand, Costa expanded its business with a larger farm in Xishuangbanna in 2016, with an estimated 200 hectares. Costa now provides high-quality raspberries, blueberries and blackberries to supermarkets throughout China. Costa won the Australia-China Business Award for agricultural technology in 2018.

Blackberries grown in Yunnan. Source: DFAT

In another example, Sydney company Lynch Group has two flower farms in Kunming, growing flowers for export to Australia. Lynch Trading (Yunnan) was established in 2008 to bring Australian expertise to the developing flower industry in Yunnan. The company established a cut flower supply base in Yunnan to supply a variety of fresh cut flowers to the parent company.

In October last year, I was delighted to join our largest ever macadamia delegation to attend the International Macadamia Symposium in Lincang, Yunnan. As you know, the macadamia is a native Australian plant and macadamia nuts have long been consumed in our country – Indigenous Australians have been enjoying them for tens of thousands of years. Now the macadamia is grown in many places, including in Yunnan.

Consul-General Lim delivers an address at the International Macadamia Symposium. Source: DFAT

Australian macadamia trees were first introduced to this province more than 20 years ago. Australian producers played an important role in partnering with Yunnan to develop its macadamia industry. In 2003, the first joint venture to develop macadamias was established between John Wilkie, from Lismore, and a local company. Yunnan has subsequently proven to have an ideal natural climate for growing this nut and is now China’s leading macadamia producer.

In recognition of his contribution to Yunnan, John was awarded the Colour Cloud award by the Yunnan provincial government, and a Friendship Award by China’s State Council in 2008. I was delighted to meet John’s wife and son at the International Macadamia Symposium, both continue to have close collaboration with Yunnan.

In all of these cases, Australian companies have enhanced local skills and capabilities and made a significant contribution to Yunnan’s rural economy, and helped directly to alleviate poverty. I am struck by the close cooperation and warm friendship between our companies and local communities. I am certain there is a lot more room to develop the Australia-Yunnan relationship for the benefit of both sides.

Picturesque Lijiang. Source: DFAT

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