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Mekong shapes up as major trade artery

Mekong shapes up as major trade artery

Beijing: China and the other five countries along the Mekong River this week signed an agreement in Beijing to build a modern and user-friendly transportation network.

Yunnan, in the far southwest of the People's Republic, is increasingly becoming a new frontier of multimodal trade for China and southeast Asia.

Officials from countries of the Greater Mekong Subregion (GMS) agreed on a joint proposal for improved road systems and simplified cross-border procedures.

Transport ministers from China, Myanmar, Laos, Thailand, Cambodia and Vietnam signed the last four of the 20 annexes and protocols of the GMS Cross-Border Transport Agreement, a multilateral instrument designed to facilitate cross-border trade and transport.

According to the pact, the six countries will remove or reduce non-physical barriers across borders, such as setting up single-stop customs inspections, providing visa assistance for cross-border trade, and allowing vehicles to pass across borders with fewer checks. The six nations are also committed to improving the sub-regional transportation infrastructure, with finances generated internally and from the Asian Development Bank (ADB).

"Improving transport infrastructure and lowering trade barriers is crucial to the economic development of the Mekong subregion and for reducing poverty," said Arjun Thapan, director general of the ADB's Southeast Asia Department. "This agreement is a crucial instrument for advancing trade, investment, tourism and access to vital services."
As part of the program, ADB has provided $1.232 billion in loans for seven highway, expressway and railway projects in Southwest China's Yunnan Province and Guangxi Zhuang Autonomous Region since 1994.

The Kunming-Bangkok Highway's section in Laos, funded by China, was completed in June 2006, a year ahead of schedule. The 247-kilometer road, which was previously usable only in the dry season, is now an all-weather surface.

The Kunming-Hanoi-Haiphong Highway's section in China (401 km) is expected to be completed before the end of this year.

As the 12th longest river in the world, the 4,880-km Mekong River is the most important international river in Southeast Asia. It originates in the Qinghai-Tibet Plateau in China and runs through Yunnan Province of China, Myanmar, Thailand, Cambodia, Laos and Vietnam.

On December 29 last year two ships carrying a total of 300 tons of refined oil from Thailand arrived in Jinghong in southern Yunnan, marking the initiation of a scheme to transport oil from Southeast Asia.

The oil transport route is a result of an agreement signed in March 2006 by China, Laos, Myanmar and Thailand to cooperate on the shipping of oil along the Mekong, which connects Yunnan with the three Southeast Asian countries as well as Vietnam and Cambodia.

China is expecting to receive 200,000 tons of refined oil via the new route, which makes it possible to circumvent shipping oil through the pirate-infested Malacca Strait.
The shipping route is an estimated 200 yuan/ton cheaper to ship to Yunnan than existing land routes and will also make it cheaper to transport oil to Sichuan and Guizhou provinces. Engineers are already exploring ways to increase the river's oil transport capacity.

The Mekong was opened to commercial navigation in the early 1990s and has developed into a major tourism, ore and commodities transport route, with more than US$1.3 billion in goods traveling the river in the past five years.

Plans are also afoot to build a US$2 billion pipeline from Myanmar that will connect Kunming to the Andaman Sea port of Sittwe. Scheduled for completion in 2009, the pipeline will be able to transport oil and gas from the Andaman Sea as well as oil and gas shipped to the port from the Middle East and Africa. As with the Mekong project, one of the major advantages of the Sittwe-Kunming pipeline is cutting the Malacca Strait out of the picture.

Furthermore, riverine routes have been dredged to allow barges to travel from Kunming all the way to Bangladesh.  [22/03/07]