x Abu Dhabi, UAEWednesday 17 January 2018

Kunming a hotbed of mixed emotions

Building Brics: Kunming, the provincial capital of Yunnan province in south-west China, is known as the "spring city" because it has a singularly pleasant climate.

Kunming, the provincial capital of Yunnan province in south-west China, is known as the "spring city" because it has a singularly pleasant climate.

But as well as being a nice place to live, it is also an ambitious city.

Yunnan is a scenic and mountainous province and Kunming, despite its transformation into a major metropolis, is a popular destination for domestic tourism. A three-and-a-half hour flight from Beijing makes it within easy reach for tourists from the capital but not so near that it is a dull choice for domestic tourists.

But the potential for developing the area's tourism and recreation industries has been set aside, largely because of the province's proximity to neighbouring Myanmar.

The new China-Myanmar oil-and-gas pipeline project, connecting the Indian Ocean with south-west China, is central to government's plans to really push Yunnan to new heights, lifting the city in the national league tables - it is currently in 49th by GDP.

Much of this has been driven by huge infrastructure spending as the province plays catch-up with the rest of the country. Yunnan is home to a motorway network that is second to none in China.

But a major element are government plans to transform Kunming into a petrochemical refining and production base and this was laid out in Beijing's latest five-year economic development plan, which covers the period from 2010 to 2015.

It involves the country's largest state-owned oil and gas producer China National Petroleum Corp (CNPC) building a 20 billion yuan (Dh11.96bn) oil refinery in the province with a projected annual capacity of 10 million tonnes.

Yunnan's GDP reached 1 trillion yuan last year, which was growth of 13 per cent year on year, compared with the national average of 7.8 per cent.

In the first quarter of this year, GDP in Kunming rose 13.5 per cent, so the expansion is continuing.

In 2011, its total GDP was 875bn yuan and the target set out in the five-year plan is for both the total GDP and income of urban and rural population in Yunnan to be doubled by 2016. According to the Yunnan statistical bureau, the province has enjoyed large increases in inward investment, consumption and foreign trade, too.

While GDP growth is significantly higher than the national average, GDP growth per capita is still lower than the rest of the country and it has become part of a national drive to increase rural incomes.

While most Kunming residents will doubtless welcome bids to raise GDP and narrow the wealth gap, the environmental cost of development is raising hackles in Kunming.

The local government has sought to play down a 2006 plan that allows the chemical company Yunnan Yuntianhua to produce 650,000 tonnes of the chemical compound p-Xylene (PX), a chemical used in making fabrics and plastic bottles, and one million tonnes of terephthalic acid in the Anning area. The plan has met with local scepticism and there has been a handful of boisterous protests against the plans.

Waving banners that read "be open with environmental impact assessment, oppose pollution", and "Refine your little sister", more than 2,000 people protested for a second time against plans for a petroleum refinery in Kunming last week.

In the wake of the first protest on May 4, local government officials and PetroChina, a unit of of CNPC, held a series of public meetings and pledged operations at the refinery would be environmentally sound.

Officials have assured local residents environmental protection and safety procedures will be a priority but many worry that, once construction of the oil refinery begins, the local government will be left powerless to supervise and regulate the large state enterprise.

These environmental concerns could prove a stumbling block to the government's efforts to lift the south-west, and a compromise looks a certainty.