Kunming's status as one of the cities with the highest vehicle ownership rates in the country is in no imminent danger – the city now has 1.1 million registered motorized vehicles, with 900 vehicles being registered daily, according to a Dushi Shibao report.

Kunming car sales have rebounded from a several-month slowdown caused by the global financial crisis. Statistics provided by the Kunming Public Security Bureau's Vehicle Management Department show that car sales are approaching the all-time high experienced in late 2005 and early 2006, when nearly 1,000 vehicles were being registered daily.

Despite being relatively small in comparison to other Chinese cities – it is China's 23rd-largest city – Kunming became the ninth Chinese city to have one million registered vehicles last year.

Conditions are ripe for auto sales in Kunming to continue to increase in the coming months. The recent completion of the city's double-decker second ring road, the local economy's recovery from the effects of the global economic downturn and a growing second-hand car market have made the idea of purchasing a vehicle more feasible to the average Kunming resident.

Ramifications of the growing number of vehicles on Kunming's streets are apparent. In addition to increased air pollution, the Chinese saying "many monks, not much porridge" (僧多粥少) aptly sums up the parking situation throughout the city. Many of the city's parking lots are filled during the day, leading to many Kunming drivers parking illegally, often in bike lanes or on sidewalks.

To address this problem, the city government has recently announced that automobiles parked on sidewalks that block the yellow ground tiles intended for blind people will receive 50 yuan parking tickets on the spot. Whether the city has the ability – and will – to enforce this new regulation should be apparent soon, just as it was with last year's ill-fated attempt to ban the unnecessary use of car horns.

Image: poco.cn

A combination of increasing industrialization, rapid growth in outside investment and being less integrated with the global economy than most cities of its size has enabled Kunming to escape the global economic downturn relatively unscathed.

According to the Kunming municipal statistics bureau, the city's gross domestic product (GDP) for the first half of 2009 totaled 77.02 billion yuan (US$11.27 billion), an increase of 8.8 percent on the first half of 2008, according to a Kunming Daily report.

The city's GDP growth exceeds that of China as a whole by 1.7 percentage points over the same six-month period.

Individual spending power is also growing in Kunming, with disposable income rising 19.1 percent year-on-year to reach 8,081 yuan (US$1,183).

Although Kunmingers' disposable income lags behind the disposable incomes in coastal cities, the prices of everyday goods and services in Kunming tend to be significantly lower than cities such as Shanghai or Shenzhen.

The consumer price index (CPI), a measure of the prices of a basket of consumer goods, increased only 0.5 percent over the first half of 2008. The CPI for the second quarter of this year dropped by 0.3 percentage points, primarily due to a drop in food prices.

Yunnan and neighboring Guangxi will soon be allowed to use the yuan to settle transactions with Southeast Asia, according to a government official speaking at the China-ASEAN Expo yesterday.

China-ASEAN Expo vice secretary general Nong Rong told reporters at the trade fair in Nanning, capital of Guangxi Zhuang Autonomous Region, that conducting business with Southeast Asian countries in yuan would lower the foreign exchange risks posed by currency fluctuations.

"Preparation work for the pilot programs are progressing smoothly," Nong said. "Some companies that were deterred by foreign-exchange risk may now seek to expand overseas as the risks have been reduced."

China's State Council initially announced its plans to let Yunnan and Guangxi conduct yuan settlement in Southeast Asia last December. Since then it has also announced its intentions to launch similar programs in Shanghai and four cities in Guangdong.

Should China launch the Yunnan/Guangxi yuan settlement scheme, it will be a significant step in the development of the yuan into an increasingly important global currency. Chinese President Hu Jintao and other officials have called for the yuan to eventually become a global reserve currency alternative to the US dollar.