Zhao Bin’s store is the oldest that sells Thai merchandise at Yunfang Southeast Asia Mall in the bustling city of Kunming, southwest China’s Yunnan Province.

The shelves of his store are filled with Thai spices, facial cleansers, drinks and snacks and an exotic aroma floats in the air. “It comes from Thai handmade essential oil soaps, our best seller,” said the 33-year-old.

Bordering Myanmar, Laos, Vietnam & neighbouring Thailand; Yunnan has been China’s inland gateway to South Asia & Southeast Asia for decades

As China continues to deepen reform and opening up, Yunnan has maintained intimate economic ties with neighbouring countries and Kunming, the provincial capital, has gradually become a distribution centre for Thai commodities.

Zhao has been engaged in importing Thai goods for 11 years. While Sino-Thai trade is developing rapidly, challenges also lie ahead. “The biggest challenge comes from e-commerce, which has a big impact on traditional wholesalers,” he said.

Though holding obvious geographical advantages, Yunnan lags behind coastal and inland cities in terms of opening up, especially in clearance efficiency.

Yunnan’s new pilot free trade zone (FTZ) was officially established last Friday, becoming one of six new pilot FTZs in China to further promote liberalisation and facilitation of foreign trade.

According to the overall plan, Yunnan will strive to build itself into China’s open front to South Asia and Southeast Asia. It aims to become an important corridor connecting the Belt & Road Initiative and the Yangtze River Economic Belt, as well as a key intersection between South Asia and Southeast Asia.

Zhao is more than excited to hear the news. “My company will have more opportunities to develop with the implementation of preferential policies in the future,” he said.

“Yunnan has always played a vital role in external exchanges and has inherent advantages because of its geographical proximity and cultural affinity with neighbouring countries,” said Ma Yong, director of the Institute of Southeast Asia of the Yunnan Academy of Social Sciences.

“In recent years, Yunnan has actively participated in the construction of the Belt & Road Initiative and promotion of a higher level of opening up,” said Zhang Guohua, Vice Governor of Yunnan.

“Yunnan has also continuously deepened economic and trade exchanges with neighbouring countries and provinces, and pushed for becoming a trading hub with South Asia and Southeast Asia.”

Yunnan’s pilot FTZ covers parts of Kunming, Honghe Hani and Yi Autonomous Prefecture that neighbours Vietnam and Dehong Dai and Jingpo Autonomous Prefecture, which borders Myanmar.

Bai Yunfeng exports agricultural products through the Hekou Port of Honghe Hani and Yi Autonomous Prefecture, the largest land route of Yunnan in its trade with Vietnam. It is also the most convenient southwest China port leading to Southeast Asia.

“The establishment of the pilot FTZ will further promote interaction and exchange with neighbouring countries, and will also bring more preferential policies and a freer trade environment,” said Bai.

“Yunnan will strengthen cooperation with neighbouring countries, innovate cross-border economic cooperation, explore institutional and technological innovation as well as policies to deepen reform and opening up in the new era,” said Zhang.