National level coordination and stakeholder consultation mechanisms for regional cooperation and 

integration in GMS countries: Case Study of China

Ms. XIONG Bin & Ms. WEN ShuhuiARTNeT Consultative Meeting on 

Bridging the Development Gaps in the GMSCentre for Analysis and Forecasting

Hanoi, 1‐2 June 2009

I. Introduction

• China’s diplomatic strategy re-adjustments: mutual political trust and economic co-prosperity

• CAFTA and the GMS program• Great progress in the GMS cooperation: trade,

FDI, self-development capacity, closer relationship

• Problems resulted from the different needs and involvement of the stakeholders

Trade between China and GMS Countries

Research Objectives

• Identifying the characteristics, including needs and priorities, of the main stakeholders involved in the GMS program, especially in the aspect of transport and trade facilitation;

• Evaluating the institutional and consultation mechanisms regarding GMS regional integration;

• Proposing constructive suggestions about the stakeholder involvement.

Report Outline• China and its regional integration with GMS and

non-GMS countries• Stakeholders in the GMS regional integration

- Definition- Coordination among Different Stakeholders- Degree of Influence, Importance, Interest and Impact of Stakeholders

• Stakeholders in transport and trade facilitation - Genesis and Implementation Status - Stakeholders Definitions- Stakeholders Analysis

• Constructive Suggestions- Regional Level- National Level

II. China and Regional Integration• The Association of South East Asian Countries(ASEAN)• ASEAN 10+3• China and Asia Pacific Economic Co-operation(APEC)• Asia-Europe Meeting(AEM)• Shanghai Cooperation Organization(SCO)• Asia-Pacific Trade Agreement • Mekong River Commission (MRC)• ASEAN-Mekong Basin Development Cooperation

(AMBDC)• GMS program founded by ADB ( Refer to Table 2-1 China's participation in regional cooperation

organizations Overview in the report )

Participation of Yunnan and Guangxi Province

Yunnan

Sichuan

Beijing

Guizhou

HunanJiangxi

Fujian

GuangdongGuangxi

Hainan

HongkongMacao

Thailand

MyanmarLaos

Yunnan Province:Total size: about 394 thousand km2

Population: 47.5 millionBorder line : 4,060 kmEthnic minorities clustering areaOne of the less developed province

Laos Vietnam

Participation of Yunnan Province• Objectives:

- Infrastructure improvement- Trade and investment promotion- Sea port access- Link between China and Southeast Asia

• Achievements:- Improved transport infrastructure ( highways, airports

etc.)- Increased trade and investment- Establishment of bilateral cooperative mechanisms ( Refer to Annex Table 1: Bilateral and Multilateral

Cooperation Mechanisms of Yunnan relating to GMS region)

Trade between Yunnan and GMS Countries

• An annual growth rate of 30%• In 2007, total trade with GMS countries accountedfor 24% of the total trade of Yunnan

• No.1 and No.2 trade partners(2007): Vietnam and Myanmar• Importance of Border Trade

III. Stakeholders in GMS Regional Integration

• Definition of stakeholders: the parties of either public or private sectors in China who are involved in the GMS regional integration.

• The GMS regional integration indicates the ADB and GMS programs.

• The stakeholder analysis at the Provincial level will be made from the aspect of Yunnan Province only.

• Methodology– Desk research: – In-depth interviews and phone interviews:

The Definition of Stakeholders

1. Government1.1 Central Government

- External coordinator: the Department of International Affairs(DOIA) of the Ministry of Finance (MOF)

- Internal coordinator: the Department of the Regional Economy(DORE) of the National Development and Reform Commission (NDRC)

- Ministry of Foreign Affairs ( MOFA)- Other line ministries

1.2 Provincial Government and Prefectural Government- Provincial Coordinator: the office of Yunnan Lancang-Mekong Coordination Group (Yunnan LM Office) in the Yunnan Provincial Development and Reform Commission (Yunnan DRC)- Different line departments in the provincial government and prefectural government

The Definition of Stakeholders

2. State-owned Enterprises (SOEs)3. Private Sectors

3.1 Yunnan Provincial Chamber of Commerce (YPCC) 3.2 Other Industrial Associations3.3 Small and Medium Enterprises（SMEs）

4. Border Communities5. Donors and Development Partners( The World Bank,

ADB, UNDP, ESCAP, FDA, IFAD,JBIC)6. Civil Organizations (Conservation International, Nature

Conservancy, World Wide Fund for Nature, Mekong Watch, GREENSOS, Green Camel Bell (Lütuoling) etc.)

The Definition of Stakeholders

Coordination among Different Stakeholders• The Ministry of Finance, the National Development and

Reform Commission and Line Ministries• The Central Government and the Provincial

Government• The Provincial Governmental Departments• The SOEs and Private Sectors• The Government, SOEs and Private Sectors• The Government and the Border Community• The Government and Development Partners• The Government and Civil Organizations

Figure3-1: The Relationship among the Stakeholders of the GMSprogram in China

Table 3-1: Degree of Influence, Importance, Interest and Impact of Stakeholders

Stakeholders INFLUENCE1 IMPORTANCE2 INTEREST3 IMPACT4

Central Government and Line ministries

Highest for policy formulation and high for

implementationHighest Highest Highest

Provincial Government and Concerned Departments

Medium for policy formulation and highest

for implementationHigh Highest Highest

Prefectural Government

Low for policy formulation and high for

implementationHigh Highest Highest

SOEs Medium Highest Medium High

YPCC and Industrial Associations

Low High High High

SMEs Lowest Highest High Highest

Border Communities Lowest Medium Medium Highest

ADB and Development Partners

Highest for policy formulation and Medium

for implementation

Highest for policy formulation and

Medium for implementation

Highest Low

Civil Organizations Low Low High Low

IV. Stakeholders in Transport and Trade Facilitation (CBTA and Economic Corridor)

• Genesis and Implementation Status of CBTA and SFA-TFI in China- China acceded to the CBTA on 3 November 2002 in Phnom Penh- the SFA-TFI was successfully presented and endorsed by the 2nd

GMSSummit held in Kunming on 4 to 5 July 2005

- In January 2008, the domestic acceptance ratification for all the 17 annexes and 3 protocols of CBTA have been fulfilled

- In March 2008, China and Vietnam signed a MOU for inclusion of the Nanning-Hanoi corridor and Youyiguan-Huu Nghi Border Crossing

Pointinto the scope of the GMS CBTA;

- In November 2008, the negotiations on the “MOU on the Initial Implementation of the CBTA at the Border Crossing Points of Mo Han and Mo Ding” between China and Laos were initiated.

• Genesis and Implementation Status of CBTA and SFA-TFI in China- The North-South Economic Corridor ( NSEC)

a) The Western Sub-Corridor:Kunming (China)-Chiang Rai (Thailand) - Bangkok (Thailand) via Lao PDR or Myanmar

b) The Central Sub-Corridor: Kunming(China)-Hanoi (Vietnam)-Hai Phong (Vietnam); and

c) The Eastern Sub-Corridor: Nanning (China)- Hanoi viathe Youyi Pass or Fangcheng (China)-Dongxing(China)-Mong Cai (Vietnam) route.

Stakeholders of the CBTA, SFA-TFI and Economic Corridor in China

1. Government1.1 Central Government

- National Coordinator of CBTA: the National Transport Facilitation Committee (NTFC) in Ministryof Transport ( MOT)

- National Coordinator of SFA-TFI: Ministry of Commerce( MOC)

1.2 Provincial and Prefectural Governments- the Yunnan Transport Facilitation Committee

(Yunnan TFC) in Department of Transport ( DOT)- Department of Commerce

Needs of Governments

• Central Government(1) To ensure land access to GMS countries; (2) To establish the connection between inland Provinces and access to the sea port;(3) To use the corridors as the gateway for the China-ASEAN trade and promote the development of the economic corridor with the implementation of China-ASEAN FTA.

• Provincial Government(1) To improve the road and transport conditions of the local areas;(2) To provide new business, trade and investment opportunities to the local people via the establishment of the international transportation network;(3) To improve the well-being of the border community by the infrastructure improvement and increase their income by creating new job opportunities;(4) To promote economic development by getting access to the GMS market as well as the ASEAN market and create a friendly export environment for the important Provincial agricultural industries such as fresh-cut flowers, vegetables and fruit.

Needs of Governments

Problems• The coordination between the line ministries at the

Central government level is insufficient. • The communication mechanism between the Central

and Provincial government has not been brought into full play.

• Lack of a powerful coordinator at the Provincial level contributes to delays in implementation.

• There is a lack of knowledge and understanding of CBTA, its annexes and protocols at the Provincial and Prefectural governments.

• The infrastructure constructions at the border ports need further improvement.

2.State-owned Enterprises (SOEs)

• Needs of SOEs(1) To further simplify the exit procedure(2) To reduce the entry fee for passengers and vehicles in Laos. (3) To establish international road signage on the international highway.(4) To reduce the operational cost with the support of the Government to reduce the domestic fees such as the road maintenance fees and highway construction funds on international transport buses.

3. Private SectorTable4-1: Comparison of the Four Available Transport Methods for Green Beans from Kunming to Bangkok, 2008

Transport Methods Route

Cost / Ton

( RMB)

Frequency of loading and unloading

Transit Time Advantages Disadvantages

By Mekong River

1) By truck: Kunming-Jinghong2) By boat: Guanleiport (China ) –Chinagsheng port(Thailand)

1450 4 times 5 days Low cost

- No cold storage- High frequency of

loading and unloading

- High degree of damage

- Not available at the dry season (Dec-April)

By sea

1) By truck:Kunming – domestic sea port in China2) By boat: Domestic seaport in China–Port in Thailand

1044 4 times 7-10 days

- Cold storage- Lowest cost

- Long transit time- High frequency of

loading and unloading

- High degree of damage

By Kunming-Bangkok Highway

By truck: Kunming -Bangkok

2340 2 times 2-3days

- Cold storage - Short transit time- Low frequency

of loading and unloading

- Low degree of damage

- High cost

Problems and needs of private sectors

• Increased cost and transit time resulting from the requirement of vehicle changes during the process of transport.

• Complicated and time-consuming applications for entry documents of foreign vehicles.

• Complicated and time-consuming exit and entry formalities. • Delays caused by the uncompleted Kunming-Bangkok

highway.• More information about CBTA, the related rules and

regulations of trade, transport, trade facilitation and investment;

• More coordination with the government;• Proper and efficient channels for reports problems. .

4. Border Communities

Needs of Border Communities• More convenient transportation resulting from

the road construction;• Infrastructure improvement in the border areas;• Better job opportunities and increased income;• More information of how to make use of the

CBTA implementation;• More information on government policies

5. ADB6. Civil Organizations

Influence Importance Interest Impact

Genesis Highest Highest Highest HighestCentral Government/line

ministries Implementation Highest Highest Highest Highest

Genesis Low Low Medium MediumProvincial Government/ Concerned

DepartmentsImplementation Highest Highest Medium Highest

Genesis Low Low Low LowPrefectural Government Implementation High High High Highest

Genesis Low High Low LowSOEs Implementation Medium High Medium High

Genesis Low High Low LowPrivate Sectors Implementation Low High High High

Genesis Lowest Medium Lowest LowBorder Communities Implementation Low Medium Low Highest

Genesis Highest Highest Highest LowADB

Implementation High Medium Highest Low

Genesis Lowest Low Medium LowCivil Organizations Implementation Low Low High Low

Table 4-2: Degree of Influence, Importance, Interest and Impact of Stakeholderson Genesis and Implementation of CBTA and Economic Corridor

Stakeholder Analysis in TTF(CBTA and Economic Corridor)

Table 4-3. Importance and Influence Matrix in the Genesis of the CBTA and Economic Corridor

High Influence Low InfluenceHigh Importance Central government,

ADBSOEs,Private Sector;border communities

Low Importance Provincial government;Prefectural governmentCivil Organizations

Table 4-4. Importance and Influence Matrix in the Implementation of the CBTA and Economic Corridor

High Influence Low InfluenceHigh Importance Central government,

Provincial government;Prefectural government

SOEs,Private Sector;border communities

Low Importance ADB Civil Organizations

Factors Accounting for the Different Degrees

• Lack of knowledge and understanding of CBTA, SFA-TFI and Economic Corridor

• Lack of sufficient coordination and effective communication channels

• The speed of the domestic regulation adjustment and revision

• The speed of the implementation of initiatives in the GMS area

• Infrastructure improvement and human resource training at the border ports

5. Constructive Suggestions on Stakeholder Involvement in Regional Integration

1.Suggestions at the Regional Level• To co-organize inter-country research and publish

a series handbooks in different languages and the contents on specific initiatives.

• To strengthen mutual dialogue on the initiative implementation in order to improve the efficiency and generate the regional implementation.

• To acquire further support from ADB to support the SMEs’ participation

2.Suggestions at the National Level2.1 To government• To strengthen the internal coordination power of the National LM

Coordination Group under the NDRC by setting up a new office and employing personnel as a permanent internal GMS coordinating center.

• To move the Yunnan LM office from the Yunnan NDRC and put it under the direct supervision of the Yunnan Governor to create a powerful Provincial coordinator and enhance coordination among the line departments

• To set up the LM office in the three Prefectural governments• To get the involvement of SOEs, SMEs and border communities in

the initiatives or policy formulation process.• To employ civil organizations, local universities and research

institutions to conduct research related to the GMS program. • To organize training courses and publish an initiatives

implementation manual.• To promote the role of the association in the GMS integration.

2.2 to the Enterprises

• To collect information about the GMS initiatives and actively participate in the training courses organized by the government for acquiring knowledge and finding business opportunities;

• To train the human resources who are familiar with the international trade and investment as well as who are good at skills in international communications;

• To actively contact the relevant associations for updating information and sending comments or advice to the proper channels;

• To build up trading capacity among the GMS markets.

Thank you for your attentions!