Yunnan\\\'s border opening-up policies and implications for BCIM

The Bangladesh-China-India-Myanmar Economic Corridor (Henceforth, BCIM EC) is seen as an important mechanism to integrate vast markets and increase people to people contact among Bangladesh, Myanmar, South-western provinces of China and North-eastern states and West Bengal of India. It aims at promoting development of sub-regional economies, with arterial traffic or an integrated transport channel to be the main developing shaft of four major cities of BCIM namely Kunming, Mandalay, Dhaka and Kolkata, eventually improving living standard and promoting peace in the sub-region. BCIM EC could also add a new dynamism to pan-Asian regionalism. All the countries involved with the sub-regional cooperation agreed to develop the BCIM economic corridor in 2013 building the Kunming-Mandalay-Dhaka-Kolkata (K2K) route integrating a vast market of 700 million people.  
While the potential of BCIM has been examined by academics, business people, among others, and the sub-regional cooperation has involved policymakers (government officials) of the respective countries, the forum has not focused much to engage border cities, secondary towns and above all local people along the K2K route. As a result, it remains a highly centralised agenda. While Kunming, Mandalay, Dhaka and Kolkata are the main artery of BCIM EC, there are a large number of nodes-border cities, port cities located along the K2K route - which could be growth pillars and building blocks of the economic corridor through infrastructure development, industrial cooperation and cross-border trade and investment promotion.
Experience in the neighbourhood of BCIM as well as some of its member countries, notably China and Myanmar, suggest that opening up of border regions engaging local government apparatus has resulted significant changes, both economic and political, in their respective border areas. Many of these border regions have been transformed from 'battlefields to marketplace'. Furthermore, thanks to opening up of borders in ASEAN and China, the region has successfully developed East Asian Production Network.
Border Cooperation and Integration: China and Southeast Asia's Experience
Cross-border integration is a process agreed by two or more states or countries on their adjoining borders areas to promote economic and social development utilizing their respective complementarities. Banking on initial breakthroughs in terms of cross-border cooperation such as trade, investment, people to people contact, among other factors, national level governments involving two or more countries could form free trade area ultimately leading towards the formation of economic union. This requires agreements among border sharing nations on integrated or harmonized treatment of trans-boundary issues such as trade, regulatory frameworks and policies, regional infrastructure and other cross border issues.
In the neighbourhood of BCIM many Southeast Asian countries have transformed their borders from conflict zones to vibrant trade and investment hubs. Thailand that shares border with Myanmar, Laos, Cambodia, and Malaysia was involved with many conflicts in the past. Since the late 1980s, Thailand in cooperation with its neighbouring countries opened its borders for trade and investment. The border between Thailand and Myanmar runs North-South for about 2,000 km. Chiang Rai, Chiang Mai and Mae Hong Song province of Northern Thailand border with Shan state, Myanmar's largest state in terms of area. The Thai-Myanmar border check points are Myawaddy-Mae Sot, Tachileik-Mae Sai, Kawthaung-Ranong and Htee Khee-Sunaron. Border trade between Thailand and Myanmar accounts almost for 90 percent of their total trade.
Yunnan's Border Opening-Up with its Neighbours
There is a large and growing border trade and local government level cooperation between China and ASEAN. Thanks to PBELP (Prosper the Border to Enrich Local People) project China has been opening-up its borders with Southeast Asian countries. The project was initiated in 2000 involving 135 border cities and counties. Yunnan province that share 4,060 km border with Myanmar, Laos and Vietnam in the west and in the South implemented the project in its 8 prefectures and cities and 25 border counties. There are about 11 national and 12 trading ports in Yunnan.
There exist several trading ports along the Yunnan-Vietnam borders. The major ones are the Hekou trading port (400 km from Kunming and 290 km from Hanoi), the Tianbao trading port (227 km from Hanoi and 464 km from Kunming) and the Jinshuihe Trading port (450 km from Kunming and 500 km from Hanoi).
There are also a host of initiatives to integrate borders and development of economic corridors between China and some ASEAN countries under the aegis of Greater Mekong Sub-Region. Yunnan- Laos border is also equipped with trading ports. It also serves as a transit point for Yunnan-Thailand trade. The Jinghong trading port is located on the left bank of Lancang (Mekong) River (575 km from Kunming), along the highways towards Laos and Myanmar and waterways to Laos, Myanmar and Thailand. The Mohan trading port, located in the Southwest of Mengla County, located in the southernmost part of Yunnan bordering Laos in the east, west and South and facing Myanmar in the West across the Lancang River.
As part of its western development strategy, Beijing has expedited opening up process through Yunnan with Southeast Asia, South Asia, the Pacific and the Indian Ocean. In this connection, Myanmar becomes critical to Beijing, both economically and geo-politically. China and Myanmar share about 2,000 km border. Under the PBELP project many roads to Sino-Myanmar border ports, such as Jinghong-Da Menglong, Zhangfeng-Bhamo, Tengchong-Banwa, and Yingjing Banwa have been upgraded. In fact, among BCIM, Yunnan is the most advanced in terms of border infrastructure development and local level cooperation.
The Kunming-Ruili-Muse-Mandaly-Yangoon is the main trade and connectivity route of China and Myanmar. The route is also an important component of the K2K route. The project on Opening-up and Experimental Zone and the Border Financial Comprehensive Reform Pilot Area in Ruili has been adopted. The plan is materializing at a time when there are a number of mega projects that Beijing is currently undertaking, including 'One Belt and One Road', 'BCIM EC' and China-ASEAN Free Trade Area.
In developing cross-border trade, connectivity, among others, there have been close cooperation between local governments of China and Myanmar. Ruili and Muse became sister cities in 2012. Both the countries mobilized their institutions and resources. To boost trade with China and address the increasing demand for transport and infrastructure, Myanmar has been implementing an Economic Zone in the border town of Muse. A regulatory entity, the Central Body for the Myanmar Special Economic Zone, was established in 2011. To draw investment tax holiday, easy acquisition of land, utility services and other incentives have been offered in the border. A number of financial institutes, notably by China, have been instituted in the border.
The available data shows that through the Jiegao gateway of Ruili Port about 40,000 people cross the border (entry and exit) every day. To draw human resources for Ruili's labour intensive manufacturing, logistics and other services, particularly from the other side of the border, as well as investors, a new institution called the Foreigners' Service and Administrative Centre of Ruili City was established in June 2013. It provides employment and residence permits to foreign workers to work and stay in Ruili. A host of supporting institutions namely, the Ruili Municipal Health Bureau, Entry-Exit Administration of Ruili Public Security Bureau, Shanghai Municipal Human Resources, Social Security Bureau and translation companies, inter alia provide detailed guidelines and services related to residence, business, medical care, employment, education, cross-border marriage, among others, to foreigners in Ruili. The concerned authorities in Myanmar side were also consulted by the institution on various issues involving China-Myanmar cross-border people movement.
As a result, the Ruili-Muse border, which was once one of the key drug and other illicit trade point, has become major border trade hub accounting for 60 percent of Yunnan's trade (and 30 percent of China's total trade) with Myanmar. It is fast becoming transportation, trade logistics, process manufacturing, financial services, business exhibition and tourism hubs in the China-Myanmar border drawing large volume of investment. The planned projects in RDEZ reached 238, about 20 key and large projects have been settled in the experimental zone, with their planned investment totaled RMB 87 billion and completed investment reached RMB 9 billion. The border is also turning into a centre for cultural exchanges.
Implications For Bcim Borders: Borders in BCIM have a historical, cultural and political background linking China and India, the two great civilizations. However, owing to war, ethnic conflicts and other geo-political reasons the importance of border have declined and in some cases even border trade and other exchanges were banned for decades. However, most border regions in BCIM are now open for trade and travel. However, except for a handful, they are yet to be modernized to facilitate cross-border trade smoothly.  Moreover, border areas are used only for exchanging some commodities, they are not developed as cross-border investment and tourism hubs.
There are two dominant blocks in BCIM with regard to border trade and other cooperation. As discussed, Yunnan province has large border trade and other cooperation with Myanmar centering Ruili and Muse. Bangladesh, bordered by India to its west, east and north, has large cross-border trade with its largest neighbor. Of Northeast India's 42 border check-points (both functional and non-functional) with its neighbours, 33 are with Bangladesh. However, in most border areas and land ports, the road conditions and other infrastructure facilities are not up to the mark. Lack of trade facilitation measures and non tariff barriers are considered, among others, major hurdles to materialize Bangladesh-India trade and other economic potential.
Nevertheless, India is developing a number of integrated check posts (ICP). An ICP at Agartala (Akhaura)-Bangladesh is currently under operational. Another ICP at the Benapole-Petrapole border (K2K route) is likely to be inaugurated soon. In phase I, an ICP at the Dawki border of Meghalaya is under construction. In phase II, two more ICPs are to be developed at Sutarkandi (Assam-Sylhet, along the K2K route) and at Kawarpuchiah of Mizoram, respectively. This could link Myanmar through the Kaladan Multimodal Project, potentially connecting Chittagong with Rakhine as well as the Mandalay-Ruili-Kunming corridor. Two border haats are currently operational along the India-Bangladesh border (Tripura- Brahmanbarhia)- at Kamalasagar in Tripura's Sipahijala district and Dharmanagar in North Tripura district. Moreover, there is a progress in terms of transshipment. While agreements on fees and other institutional issues have yet to be finalized, some goods from Kolkata to Tripura shipped through Bangladesh.
To increase trade and other cooperation in the border, India is constructing an ICP at Moreh which is an important junction of the K2K route linking Myanmar with NEI. New Delhi is also keen to develop transit routes though Myanmar to access to its contiguous NEI geography as well as Southeast Asian markets. The Kaladan Multi-modal Transit Transport Plan aimed at connecting Kolkata port with Sittwe by sea (539 km), is a flagship project in this regard. Subsequently, it will link Sittwe seaport to Lashio in Myanmar via Kaladan river boat route.
Among BCIM countries, Myanmar-Bangladesh border cooperation is very limited. There is a LCS in Teknaf, Cox's Bazar and its counterpart is located in Mungdu. The formal border trade between the two countries is much lower than its potential.
That said, of the border cooperation among BCIM region, the Ruili-Muse border involving Yunnan and Myanmar stands out. As discussed, Yunnan's border opening up offers a number of lessons for other border regions of BCIM. Bangladesh-India, Myanmar-India and Bangladesh-Myanmar borders, can also be transformed into trade, investment and tourism centers learning from the Ruili Key Development and Experimental Zone. Such initiatives could boost confidence in border regions acting as catalyst for further liberalization leading to greater trade, investment and people-to-people contact. Cooperation among border regions and local government actors can create demand for greater regional integration acting as building blocks of BCIM EC.
The writer is Research Fellow at the Policy Research Institute (PRI) and Power and Participation Research Centre (PPRC). E-mail: [email protected].
(This article is drawn from the paper titled Border Cities as Building Block of BCIM: Engaging Local Government Actor to Foster Regionalism, written for the Yunnan Academy of Social Sciences, Kunming, China.)