BANGKOK, Nov 27: The Thailand government will promote favoured small and medium-sized enterprise (SME) clusters to penetrate and tap the potential of Yunnan Province, China’s “golden west”.

Clusters of SMEs in sectors such as food, fashion, machinery and mechanical appliances, electrical machinery and parts, wood and wooden articles, and other commodities would be targeted for support, Thai Deputy Prime Minister Prommin Lertsuridej said. The government will concentrate on the new trade frontier of Kunming, the capital of Yunnan, which has a population of 43 million and is a growth area for high-end commodities, he said.

Speaking at the seminar on “Thai SMEs and trade opportunities in China”, Prommin, who oversees national economic policies, told more than 500 SME representatives that the government had looked at many ways of promoting SME exports in western China.

“Under the Sino-Thai special relationship, the government has designated trade transportation routes via the Greater Mekong Sub-Region, including Chiang Mai Airport, and cross-border land routes through Chiang Rai province, Laos, Vietnam and the southern and western provinces of China,” said Prommin.

SMEs should focus on producing products for the mass market in Yunnan province, where consumption is expected to grow drastically with the Beijing government’s push to distribute economic growth throughout China, Prommin added.

“The SMEs must turn this into a new market opportunity. Exporters must introduce innovative products to this untapped market. And we must not compete with what the Chinese market already has.”

Yunnan Province has borders with Vietnam, Laos and Burma. In the years 1998 to 2001, Yunnan imported Thai goods worth Bt96.76 million, Bt438.41 million, Bt838.22 million, and Bt2.23 billion, respectively. In the first half of 2002, Thai exports to Yunnan reached Bt1.03 billion, 44.5 per cent higher than the same period last year, according to the Thai Trade Centre in Kunming.

Major exports from Thailand through Yunnan are jewellery, fresh shrimps, lac, live animals, rubber, glue, fresh flowers, dried fruits, frozen chicken parts, monosodium glutamate, canned rambutans, cooking oil, palm oil and salted canned corn.

The new trade area focus is in fact not so new.

The historic Agreement on Commercial Navigation on the Lancang-Mekong River signed between Thailand, Laos, Burma and China has facilitated Yunnan-Thai trade since 2001.

It has resulted in investment by 111 Thai companies in Yunnan worth US$115 million (Bt5 billion), making Thailand the sixth-largest investor among 25 foreign countries.

Since 1984, Hong Kong has poured $1.3 billion into Yunnan in the form of export and import businesses, $318m has come from US firms, $187m from Taiwan, and $164m from Singapore.—The Nation/Asia News Network