Longchuan China-Myanmar Agricultural and Sideline Products Import, Export, Processing and Trade Demonstration Zone Construction Project

Project Name

陇川县--中缅农副产品进出口加工贸易示范区建设项目

Longchuan China-Myanmar Agricultural and Sideline Products Import, Export, Processing and Trade Demonstration Zone Construction Project

Project Industry

Commerce

Project Site

Longchuan Zhangfeng Port Import and Export Processing Zone

Project Overview

By making full use of the high-quality agricultural and sideline products resources in northern Myanmar and Dehong Dai and Jingpo Autonomous Prefecture as well as the development advantages of Longchuan Zhangfeng Port, a professional import and export port designated by China and Myanmar for fruits and textiles, it is planned to build the China-Myanmar Agricultural and Sideline Products Import, Export, Processing and Trade Demonstration Zone Project at the Longchuan Zhangfeng Port. The project will mainly build the agricultural products processing zone, agricultural and sideline products exhibition zone, e-commerce trading platform, agricultural and sideline products price data monitoring center and the logistics and transportation zone to strengthen foreign and domestic goods trading and build a processing and trading platform for ASEAN and domestic agricultural and sideline products and other bulk goods.

Project Construction Content

Project Positioning:

The project will build an agricultural and sideline products trading market integrating agricultural products processing, display, trading, price monitoring, cold chain storage, and intelligent logistics to form an agricultural and sideline products processing trade demonstration zone for foreign procurement, domestic processing, and finished products re-exports.

Construction Strategy:

The project is constructed with the strategy of "reasonable layout and two-way development". Relying on "port logistics + imported and exported products processing", the project will vigorously develop the port economy and reasonably carry out the layout integrating processing, exhibition, storage and other business formats to meet the needs of development. Targeting the development in both domestic and international markets, the project will exert an influence on Longchuan, Yunnan and the overall Chinese market and have a reach in Myanmar and even in surrounding international markets in South Asia and Southeast Asia such as Laos and Thailand.

Investment Scale:

Land Area: 400 mu

Supporting Conditions

Zhangfeng Port has mature conditions for two-way development and remarkable conditions for customs clearance facilitation

Zhangfeng Port is a national second-class port, corresponding to Myanmar's Lweje Port. It is a specialized import and export port for fruits and textiles designated by China and Myanmar. In recent years, with the continuous increase of China's trade volume with Myanmar, the small-scale trade mainly contributed by ports has rapidly played an important role. The trade volume of goods imported and exported at Zhangfeng Port shows a continuous increase. China and Myanmar have close contact in goods trade.

Booming trade with Myanmar at the provincial and prefecture levels boosts the port economy to a "new level"

In 2019, the share of Yunnan's imports from and exports to Myanmar continued to increase, with the imports mainly being raw materials such as fruits, seafood, grains and wood, while exports mainly being high value-added products such as clothing, food, chemicals, steel products, machinery and furniture. A trade pattern of importing raw materials and exporting products has basically been formed. Taking advantage of the construction advantages of border ports, Dehong Prefecture has accelerated the development of cross-border trade. In 2019, its total import and export volume of foreign trade reached RMB 37.028 billion, of which RMB 18.273 billion were contributed by exports and RMB 18.755 billion by imports.

Rich in agricultural and sideline products

In 2019, Longchuan County had a fruit planting area of 22,600 mu and a production area of 13,300 mu, with a total output of 10,300 tons and a total output value of RMB 67.4351 million. Among them, there are 5,381.5 mu of citrus, 5,023.5 mu of kiwi fruit, 4,197.8 mu of passion fruit, 2,881 mu of loquat, and 2,007.5 mu of pitaya. The vegetable planting area reached 38,100 mu. Among them, there are 16,100 mu of early winter vegetables, accounting for 42.3% of the whole year's total; and 22,000 mu of summer and autumn vegetables, accounting for 57.7% of the whole year's total, with an average yield of 1.1 tons and an annual total yield of 41,900 tons. Its output value of animal husbandry in 2019 reached RMB 440 million. The total output of meat, milk and eggs reached 5,118 tons, with 36,400 pigs, 6,023 heads of beef cattle, 8,668 heads of mutton sheep, and 329,100 fowls being put on the market. There are 81,243 live pigs raised in the county. In addition, Longchuan County has tea gardens covering an area of 47,000 mu. Among them, tea can be gathered from 33,700 mu of the area, with an annual tea production output of 1,940 tons (57.5 kg per unit area)

New business formats and technologies such as cross-border e-commerce, rural e-commerce and blockchain traceability boost agricultural industrialization

Relying on modern information technology, Longchuan County has achieved rapid development in modern product circulation technology highlighting rural e-commerce, agricultural product blockchain traceability, and cross-border e-commerce. In addition, the e-commerce platform system, e-commerce product supply system, e-commerce agricultural product quality assurance system, e-commerce logistics system, e-commerce tourism-based poverty alleviation system, and "cross-border e-commerce + border trade system" have been laid out. In the future, with the further promotion of "Digital Yunnan" and the further development of cross-border e-commerce, Longchuan County's advantages in opening-up will continue to be highlighted and its foreign trade pattern will continue to be expanded.

Convenient traffic creates fundamental conditions for product circulation

Longchuan County's mileage of highway reaches 1,433 kilometers. The total length of the Tengchong-Longchuan Expressway from Tengchong to Longchuan via Lianghe and Yingjiang is about 150 kilometers. After the completion of Zhangzhe (Manghai-Laying) Secondary Highway and Zhangfeng-Bhamo Highway, there will be direct access from Longchuan County to Ruili, Mangshi, Yingjiang, Tengchong, Myanmar's Lweje and the port Bhamo in northern Myanmar. Longchuan General Airport opens to air traffic on September 28, 2020. The construction of roads and general airports can provide convenient transportation conditions for the project.

Investment Estimate and Fund Raising

Estimated Investment: RMB 400 million, mainly for the construction of standard factory buildings and the purchase of related production line equipment.

Fund Raising: Self-raised by enterprises, bank loans, and other ways of financing

Preferential Policies Applicable

Several Opinions of the CPC Central Committee and the State Council on In-depth Implementation of the Western Development Strategy (ZF[2010] No. 11): Enterprise income tax will be levied at a reduced rate of 15% on the industrial enterprises encouraged by the state and located in the western regions.

Several Policies of People's Government of Yunnan Province on Accelerating the Construction of Ruili National Key Development and Opening-up Experimental Zone (YZF[2013] No. 52): Newly-established enterprises in the park, excluding industries restricted or prohibited by the state, are levied the local part of corporate income tax according to the preferential policy of "five-year free and five-year half", that is, they will be exempted from the corporate income tax for first five years, and levied half of the local part of the corporate income tax starting from the first receipt of business income.

Several Policies of Longchuan County on Accelerating the Economic Development at the County Level (LF[2018] No. 15):

Support Policy: Enterprise income tax will be levied at a reduced rate of 15% on domestic enterprises and foreign-invested enterprises of state-encouraged industries according to China's Western Development Strategy before December 31, 2020.

Land Policy: If the investment projects require new land for construction, the county government will give priority to the land use of such projects and to the procedures handling for state-owned construction land rights, on the premise of conforming to the overall plan and annual plan for land use in Longchuan County and the national industrial policy and land supply policy. Industrial land can be used in such ways as long-term lease, lease before land right transfer, a combination of lease and land right transfer, and flexible-term transfer.

Scale Upgrade Policy: Enterprises that are included in the industrial enterprises above designated size for the first time will each be granted a one-time award of RMB 100,000; enterprises that are further upgraded to industrial enterprises above a higher designated size will each be granted a one-time award of RMB 30,000.

Market Prediction (Analysis)

The continuously growing foreign trade will further drive the expansion of Yunnan's agricultural and sideline products market

In 2019, Yunnan exported agricultural products worth RMB 33.12 billion, up 29%, exceeding RMB 30 billion for the first time. Yunnan's agricultural products are highly favored by countries and regions along the Belt and Road, with exports reaching RMB 22.23 billion, up 56.5%. Its exports of agricultural products to ASEAN reached RMB 21.3 billion, an increase of 60%; exports of fruits increased by more than 80%; and exports of vegetables, tobacco, flowers and other characteristic commodities all maintained growth. In 2019, Yunnan exported fruits worth RMB 14.82 billion, up 81.9%, with major varieties such as fresh grapes, oranges, fresh apples, and fresh pears all maintaining growth. Exports of vegetables totaled RMB 10.13 billion, up 10.2% and exports of flowers totaled RMB 420 million, up 29.7%.

A wide impact on a large population enables broad market prospects

The project can have an impact on about 53.9 million populations in Myanmar bordering the Longchuan Port and on 18 countries in South Asia and Southeast Asia with a population of about 2.12 billion. Factors such as a large population and a low level of industrialization will create an excellent external market environment for Chinese agricultural products processing.

Profit Model and Preliminary Benefit Analysis

After the project is completed and put into use, it will gain revenue from agricultural and sideline products trading, transportation and information services, with the annual main business revenue estimated to reach about RMB 280 million. As the project gets maturer, there will also be a continuous increase in the return on investment.

Risk Analysis

The production cycle of agricultural products is long while the processing cycle is short. That makes mistakes in processing, transportation, sales and other links easily cause economic losses.

Cooperation Pattern

Sole proprietorship, joint venture, cooperation, etc.

Contact Information

Contact Authority: Investment Promotion Bureau of Longchuan County

Contact Person: Qu Lin

Tel.: 13988221729