Yuxi Industry: A Second Venture After the Cigarette

1. A City Held Up by a Single Cigarette

In central Yunnan lies a city whose name is deeply bound to a cigarette brand—Yuxi. For many people in China, the two characters "Yuxi" call to mind not a city but a pack of cigarettes. That fact alone says it all: Yuxi is a city profoundly shaped by a single cigarette. Its industry, its public finances, its urban landscape, and even its national renown are all bound up with tobacco. To understand Yuxi's industry, one must begin with this cigarette.

The Yuxi Cigarette Factory—later Hongta Group—is the city's legend. It was this enterprise that, in the 1980s and 1990s, turned "Hongtashan" into a nationally famous brand, for a time the most prominent cigarette brand in China, and made the Yuxi Cigarette Factory one of the few modern cigarette enterprises of note in Asia and indeed the world. A single cigarette generated astonishing profits and taxes, propped up Yuxi's finances and economy, and lifted this once-obscure town in central Yunnan into national prominence as a "home of tobacco." It is fair to say that without this cigarette there would be no modern Yuxi—its modern industrial history unfolded almost entirely around this cigarette factory.

What the cigarette brought Yuxi was tangible prosperity. On the strength of tobacco's enormous profits and taxes, Yuxi has long been among Yunnan's strongest cities in per-capita economic terms. In 2024, Yuxi's per-capita GDP reached roughly 114,000 yuan, first in all of Yunnan. For a prefecture-level city to lead the entire province in per-capita GDP—surpassing even the provincial capital, Kunming—is uncommon nationwide. Behind this prosperity, the single greatest contributor is tobacco. A single cigarette gave the people of Yuxi a relatively comfortable standard of living, and gave the city solid public services and urban development. Tobacco is, quite literally, Yuxi's provider.

But a single cigarette holding up a city is at once a source of pride and of concern. When a city's economy depends excessively on a single industry and a single product, its resilience to shocks, its room for industrial upgrading, and its scope for future development are all constrained by that one pillar. The stronger Yuxi's tobacco, the deeper its dependence on tobacco, and the more pronounced the structural risk of "tobacco dominance." This is all the more true against the backdrop of tobacco control becoming a global trend and the industry facing a demand ceiling. Yuxi, so heavily reliant on tobacco, needs more urgently than anyone to answer one question: after the cigarette, what will Yuxi rely on?

This is precisely Yuxi's central proposition today—its "second venture." Even while sitting atop tobacco's "golden brand" and "ballast stone," Yuxi has not rested on its laurels. It is clear-eyed about the risk of "tobacco dominance" and is working to cultivate new pillars beyond tobacco. In recent years, Yuxi has made new-energy batteries the principal thrust of its "second venture," building a new-energy battery industrial cluster on the strength of local enterprises such as Yunnan Energy New Material (Semcorp)—the world's largest maker of lithium-battery separators—in an effort to find a new growth engine for this "city of tobacco." From a single cigarette to a single battery, Yuxi is undergoing a profound industrial transformation.

Yuxi's story is not only a story of industry. The city has deep historical and cultural roots—it is the hometown of Nie Er, the people's musician and composer of the national anthem, "March of the Volunteers." It is home to Fuxian Lake, a clear plateau lake, and the Chengjiang Fossil Site, a UNESCO World Natural Heritage site recording the Cambrian explosion of life. Tobacco's prosperity, the beauty of its landscapes, and the weight of its culture together form Yuxi's distinctive character. And upon this foundation, an industrial transformation that will shape the city's future is quietly under way.

This report is precisely about the industry of such a city—one "held up by a single cigarette, yet striving to move beyond it." We will begin with Yuxi's industrial coordinates, then examine in depth the glory and the concerns of the tobacco pillar—including that unavoidable chapter on the merits and faults of Chu Shijian, the "king of tobacco." We will then turn to Yuxi's mining and metallurgy tradition, and to the rising hundred-billion-yuan new-energy battery cluster centered on Semcorp; and finally to its distinctive plateau agriculture, the Chu-orange legend, the city's cultural character, and the path and risks of its "second venture." Yuxi's story is that of a resource-based, single-pillar city striving to diversify its industry and find a second growth curve while holding on to its core. It offers a profound lesson for the many Chinese cities that depend on a single industry.

And all of this must begin with Yuxi's industrial coordinates—what exactly is the industrial base of a city that leads its province in per-capita terms yet is structurally imbalanced?

2. The Per-Capita Champion: Yuxi's Industrial Coordinates

To understand Yuxi's industry, one must first place it in accurate coordinates. Yuxi's most striking label is "per-capita champion"—it is among the strongest cities in Yunnan in per-capita economic terms. Behind this label lies the distinctiveness of Yuxi's industry, and the deeper code of its "tobacco dominance."

Consider aggregate output first. In 2024, Yuxi's gross regional product was roughly 258.21 billion yuan, ranking among the top in Yunnan (around fourth, behind Kunming, Qujing, and Honghe). In aggregate terms, Yuxi is not the largest in Yunnan; it is a mid-sized prefecture-level city. But shift to a different metric—per capita—and the picture changes entirely. In 2024, Yuxi's per-capita GDP was about 114,000 yuan (roughly 113,973 yuan), first in all of Yunnan, higher even than the provincial capital, Kunming. That a prefecture-level city of moderate aggregate size can lead the province per capita—this contrast of "modest total, leading per capita"—is the most distinctive feature of Yuxi's economy.

The answer to this contrast is, once again, tobacco. Yuxi's permanent population is not large (about 2.26 million), yet it is home to a super-enterprise like Hongta Group that contributes enormous profits and taxes. Spread across a relatively small population, tobacco's vast profits and taxes naturally push up the per-capita figure. In other words, Yuxi's status as "per-capita champion" is, to a large degree, the achievement of "a single cigarette"—it is tobacco's high profits, taxes, and value-added that underpin Yuxi's per-capita economic strength. This shows both tobacco's enormous contribution to Yuxi and the economy's heavy dependence on it. Behind the sheen of per-capita leadership lies the concern of a single-industry structure.

From an industrial standpoint, Yuxi is a genuine industrial city. In 2024, Yuxi's industrial enterprises above designated size posted operating revenue of about 207.52 billion yuan and profit of about 11.477 billion yuan. Industry is an important pillar of Yuxi's economy, and within industry, tobacco is the unquestioned lead. Whether in revenue or in profit, tobacco commands a decisive share of Yuxi's industry above designated size (specific figures are detailed later). It is fair to say that the core of Yuxi's industry is essentially the core of tobacco. Beyond tobacco, Yuxi also has resource-based heavy industries such as steel and non-ferrous metals, and rising emerging industries such as new-energy batteries, but their weight still falls well short of tobacco's.

This structure of Yuxi's industry is a classic double-edged sword. On the positive side, tobacco—an industry of high profits, high taxes, and high stability—provides Yuxi with solid public finances, considerable employment, and leading per-capita income, giving the city a long-standing, relatively prosperous existence. With tobacco as a solid ballast stone, Yuxi's economy and finances are quite steady. On the negative side, excessive dependence on tobacco leaves Yuxi's industrial structure narrow, its resilience to shocks weak, and its room for upgrading limited. Should this single pillar of tobacco waver, Yuxi's economy would bear a heavy blow. This "all rise together, all fall together" risk is the deepest concern of Yuxi's industry.

Compared with other industrial cities in the province, Yuxi's positioning is distinctive. Kunming, as the provincial capital, has a full range of industries and the largest aggregate output, serving as the province's industrial hub. Qujing has risen in recent years on green manufacturing such as photovoltaics and lithium batteries, becoming the main arena for green manufacturing. Yuxi, meanwhile, is known for a single, powerful pillar—tobacco—leading per capita but narrow in structure. Of these three industrial cities in central Yunnan, Kunming is "large and comprehensive," Qujing "green and new," and Yuxi "refined and specialized (tobacco)"—each with its own character. For Yuxi to achieve a new breakthrough within this landscape, it must cultivate new, diversified pillars while holding on to its tobacco advantage, changing the structure of "tobacco dominance."

Yuxi's status as per-capita champion also points to a deeper truth: the quality of economic development cannot be judged by the sheen of aggregate or per-capita figures alone, but must also be measured by the health and sustainability of its structure. That Yuxi achieved per-capita leadership on a single cigarette is certainly to be affirmed; but if that lead depends excessively on a single industry, its sustainability is in question. A truly healthy economy should be diversely supported, structurally balanced, and resilient to shocks. Yuxi's "second venture"—cultivating new pillars such as new-energy batteries—is in essence about upgrading "per-capita leadership held up by a single cigarette" into "high-quality development supported by diversified pillars." This is the most fundamental goal of Yuxi's industrial transformation.

Having understood Yuxi's industrial coordinates as "per-capita champion, single in structure," we now turn to the core pillar that holds Yuxi up—tobacco. And the story of Yuxi's tobacco begins with a small factory on the brink of collapse.

3. A Small Factory on the Brink of Collapse: The Past Life of the Yuxi Cigarette Factory

Today's Hongta Group is one of a handful of modern cigarette giants in China and Asia. But few know that its predecessor—the Yuxi Cigarette Factory—was once a small local factory on the brink of collapse. From an unremarkable small factory to a tobacco empire commanding the whole nation, the turnaround of the Yuxi Cigarette Factory is a legend in China's industrial history. And the starting point of that legend was precisely its most difficult years.

The history of the Yuxi Cigarette Factory can be traced to the 1950s. Located in Yuxi in central Yunnan, it drew on Yunnan's exceptional high-quality flue-cured tobacco—the plateau tobacco leaf of the Yuxi, Qujing, and Honghe region, which, owing to high altitude, ample sunshine, and large day-night temperature swings, is of excellent quality and an ideal raw material for fine cigarettes. Sitting on such fine tobacco-leaf resources, the Yuxi Cigarette Factory should have developed well. Yet in the planned-economy era and the early years of reform and opening, the factory long suffered from poor management, aging equipment, low-grade products, and weak returns, at one point teetering on the edge of collapse. Sitting on a golden bowl yet living in poverty—that was the true picture of the Yuxi Cigarette Factory in its early years.

Where did the problem lie? In that era, the Yuxi Cigarette Factory faced many difficulties: outdated equipment and low production efficiency; extensive, undisciplined management with little market awareness; low-grade products that could not command good prices; and lax control of raw materials, resulting in unstable quality. These problems were the common ailment of many state-owned factories at the time—under the framework of the planned economy, enterprises lacked autonomy and initiative, and even sitting on quality resources they struggled to convert them into market competitiveness. Although the Yuxi Cigarette Factory possessed the innate advantage of Yunnan's fine tobacco leaf, the backwardness of its system and management long kept it from bringing that advantage into play.

The turning point came in 1979. That year, a name that would later resound throughout China—Chu Shijian—became director of the Yuxi Cigarette Factory. It was from the moment he took charge that the factory embarked on a path of thorough transformation and turnaround. With extraordinary management talent and a bold appetite for reform, Chu Shijian overhauled this factory on the brink of collapse—introducing advanced equipment, rigorously improving raw-material quality, implementing scientific management, and building brands. Under his leadership, in the span of little more than a decade the Yuxi Cigarette Factory rose from a small local factory to a modern cigarette enterprise "first in Asia, among the foremost in the world," with the "Hongtashan" brand famous across the nation. This legend will be detailed later.

The turnaround of the Yuxi Cigarette Factory was, first of all, a success in "realizing the value of a resource advantage." Yunnan's fine flue-cured tobacco was the foundation of the factory's rise. But resources do not automatically become competitiveness—as noted above, one can sit on a golden bowl and still live in poverty. The factory's success lay in genuinely converting the resource advantage of "fine tobacco leaf" into the product advantage of "fine cigarettes" and the brand advantage of "Hongtashan," through introducing equipment, rigorously improving quality, applying scientific management, and building brands. This climb up the value chain "from resource to product to brand" is the core logic of the factory's turnaround, and the general rule for the upgrading of all resource-based industries.

The rise of the Yuxi Cigarette Factory also profoundly changed the city of Yuxi. As the factory grew, enormous profits and taxes flowed steadily into Yuxi's public finances, driving improvements in urban development, public services, and residents' incomes. Yuxi, this once-obscure town in central Yunnan, became famous nationwide because of a cigarette factory and prosperous because of a single cigarette. In a sense, the turnaround of the Yuxi Cigarette Factory is the story of the city's own rise—the fate of the factory and the fate of the city were tightly bound together. This also laid the groundwork for Yuxi's "tobacco dominance," with the city's fate tied to a single cigarette.

From a small factory on the brink of collapse to a tobacco empire holding up a city, the past and present of the Yuxi Cigarette Factory is a legend of turnaround, of realizing the value of resources, and of entrepreneurial spirit. It tells us that even sitting on quality resources, one still needs sound management, operation, and reform to turn resources into wealth; and it tells us that the rise of a great enterprise can profoundly change the fate of a city. The central figure of this legend is a controversial man of both merits and faults—Chu Shijian. He brought the Yuxi Cigarette Factory to its summit, and after that summit experienced enormous personal upheaval. To understand Yuxi's tobacco, one cannot avoid an objective examination of this man's merits and faults.

4. The Rise of Asia's King of Tobacco: The Chu Shijian Era (Part One)

To tell the story of Yuxi's tobacco, one cannot avoid a single man—Chu Shijian. In 1979 he became director of the Yuxi Cigarette Factory, beginning a legend that changed Yuxi and left a deep mark on China's industrial history. Over the more than a decade he was in charge, the Yuxi Cigarette Factory rose from a small local factory on the brink of collapse to a modern cigarette enterprise among the foremost in Asia and the world. This rise is key to understanding the glory of Yuxi's tobacco.

When Chu Shijian took over the Yuxi Cigarette Factory, he faced a shambles—backward equipment, undisciplined management, low-grade products, and weak returns. But with extraordinary management talent and a bold appetite for reform, he step by step revived and strengthened the factory. The first major thing he did was rigorously improve raw-material quality. Understanding well that "only good tobacco leaf yields good cigarettes," he went deep into the tobacco fields, promoted the philosophy that "the tobacco field is the first workshop," and rigorously improved the quality of tobacco cultivation, guaranteeing the raw-material advantage of the cigarettes at the source. This extreme emphasis on raw materials laid the foundation for the high quality of "Hongtashan."

The second major thing was introducing advanced equipment and technology. With foresight ahead of his time, Chu Shijian overrode objections and invested heavily to introduce the world's most advanced cigarette-production equipment and technology of the day, substantially raising the factory's production capacity and product quality. In an era when both materials and foreign exchange were in short supply, such large-scale investment required tremendous courage and vision. It was precisely this advanced equipment that let the factory's product quality make a leap, giving it the strength to compete with domestic and international brands.

The third major thing was building brands. Chu Shijian deeply understood the value of brands. He concentrated resources on building the high-end brand "Hongtashan," and through solid quality and effective operation made it a nationally famous brand in short supply. In the 1980s and 1990s, "Hongtashan" was almost synonymous with premium cigarettes, a symbol of status and standing. The establishment of a strong brand brought the factory enormous brand premium and market share.

Under Chu Shijian's leadership, the Yuxi Cigarette Factory achieved astonishing operating results. According to public records, over the decade-plus of his tenure the factory delivered cumulative profits and taxes to the state of roughly 99.1 billion yuan, with annual profits and taxes peaking at nearly 20 billion yuan. These are extraordinary figures—a cigarette factory in a small southwestern city became a major source of profits and taxes for the state, contributing greatly to national and local finances. The Yuxi Cigarette Factory rose to become a modern cigarette enterprise "first in Asia, among the foremost in the world," and the "Hongtashan" brand value ranked at one point among the top brands in China. This rise stands as a marvel in China's business history.

Chu Shijian's business acumen showed not only in tobacco itself but in his integration of the industrial chain. He promoted the "first workshop" philosophy, bringing tobacco cultivation into the enterprise's quality-management system; he valued the interests of tobacco farmers, using "shared benefit" to spur their enthusiasm for growing good tobacco; and he invested in building supporting industries to complete the tobacco industrial chain. These practices were quite advanced for the time and reflected his vision and breadth as an entrepreneur. It is fair to say Chu Shijian not only made the Yuxi Cigarette Factory large but made it a modern enterprise with scientific management and a complete industrial chain. This management talent is why he was rightly called the "king of tobacco" and "Asia's king of tobacco."

The rise of the Yuxi Cigarette Factory in the Chu Shijian era profoundly changed Yuxi. Enormous profits and taxes propped up Yuxi's finances and drove the city's development and construction, making Yuxi a nationally famous "home of tobacco" and one of the strongest cities in Yunnan in per-capita economic terms. The glory of the factory was the glory of the city—Yuxi's modern industrial history is, to a large degree, the history of the Yuxi Cigarette Factory's rise, and Chu Shijian was its undisputed lead figure. His management talent and bold reform created enormous value for Yuxi and for the state, and this contribution should be objectively recorded and affirmed.

Yet Chu Shijian's story did not remain at the summit of glory. After the peak of his career, his life underwent enormous upheaval—he was subjected to serious legal investigation and punishment over economic matters. Why would an entrepreneur who created enormous value turn to breaking the law? This history, intertwining merits and faults, calls for examination in an objective, prudent, and lawful manner. That is the theme of the next chapter.

5. Merits and Faults: The Chu Shijian Era (Part Two)

An entrepreneur who created enormous value ultimately received severe legal punishment for economic crimes—after the peak of his career, Chu Shijian's life underwent a dramatic reversal. This history, intertwining merits and faults, is an unavoidable chapter in the story of Yuxi's tobacco, and the one that most requires an objective and prudent attitude. We must take the official conclusions of the investigation and the legal judgments as the sole standard: merits are merits, faults are faults—neither avoiding his lawbreaking because of his contributions, nor erasing his contributions because of his lawbreaking.

First, the faults—that is, the matter at the level of law. At the peak of his career, Chu Shijian crossed the red line of the law. According to the official investigation and judicial judgment, Chu Shijian was found guilty of the crime of embezzlement and the crime of holding a huge amount of property from unidentified sources, and in January 1999 was sentenced according to law to life imprisonment. Subsequently, in light of his conduct while serving his sentence, in 2001 his sentence was commuted according to law to a fixed term of seventeen years; and in 2002 he was granted medical parole on grounds including his physical health. These are facts established through lawful trial by the judicial authorities and set out in explicit judgments. As the head of a state-owned enterprise, Chu Shijian used his position to commit unlawful and criminal acts, and received serious legal punishment—a manifestation of just deserts and of equality before the law. However great his contributions to the enterprise and the state, they cannot be grounds for exempting him from his crimes—this is a bottom line of the rule of law that must be made clear.

The Chu Shijian case drew wide national attention and deep reflection at the time. What it exposed were deeper problems: the absence of supervisory and constraint mechanisms over the operators of state-owned enterprises, and the imperfection of incentive and restraint mechanisms. An entrepreneur who created enormous profits and taxes for the state had lawful personal income severely mismatched with his contributions, while the enterprise lacked effective supervision and constraint, ultimately resulting in tragedy. This case became an important warning as China advanced state-owned enterprise reform and worked to improve corporate governance and sound supervisory, constraint, and incentive mechanisms. It reminds people that however capable or accomplished an operator may be, they must be placed under effective supervision and the constraint of the rule of law; the institutional building of an enterprise matters more, and is more reliable, than the ability of any individual.

Now the merits—that is, his contributions to the enterprise and the state. Objectively, during his tenure at the Yuxi Cigarette Factory, Chu Shijian, with outstanding management talent, built a small factory on the brink of collapse into a modern cigarette enterprise among the foremost in Asia, delivering cumulative profits and taxes to the state of roughly 99.1 billion yuan and making enormous contributions to national finances and to Yuxi's development. This operating record and historical contribution are objective facts and should not be wholly negated because of his later lawbreaking. Assessing a historical figure should be comprehensive, dialectical, and grounded in fact—recognizing both his contributions and his errors, neither covering up faults because of merits nor erasing merits because of faults. This is the attitude of historical materialism, and an attitude responsible to history.

The reason Chu Shijian's story has drawn such lasting attention and discussion lies precisely in its complexity—it interweaves an entrepreneur's outstanding talent with serious error, enormous contribution with unlawful crime. This complexity makes simple praise or condemnation appear one-sided. Toward such a figure, the correct attitude is to take the legal judgment as the standard and view his merits and faults objectively; to draw deep lessons from it and improve institutions, strengthen supervision, and sound the rule of law; and at the same time to view rationally the complexity of human nature and the twists and turns of history. This is a mature, objective, and responsible view of history.

It must be emphasized in particular that the Chu Shijian case was an unlawful matter of a specific individual in a specific historical period—a single case. It reflected the imperfection of supervisory and constraint mechanisms over state-owned enterprises at the time, not a problem of Yuxi's tobacco industry itself, still less of the city of Yuxi or its people. As an enterprise, the Yuxi Cigarette Factory (Hongta Group) continued to develop soundly after Chu Shijian, continuing to contribute to the state and the locality; and the city of Yuxi has continued to develop on the support of tobacco. We examine Chu Shijian's merits and faults in order to remember history, draw lessons, and improve institutions—never to negate the historical contribution of Yuxi's tobacco, still less to attach any negative label to Yuxi. To judge each matter on its own terms and stay grounded in fact is the proper attitude for examining this history.

Chu Shijian's later life also had a widely known "sequel"—in his advanced years he started over, growing oranges in the Ailao Mountains and creating the "Chu-orange" brand legend. This chapter will be told separately in the later section on plateau agriculture. And however one assesses Chu Shijian's personal merits and faults, one thing is certain: the glory the Yuxi Cigarette Factory created in that era, and the "Hongta" brand it forged, have become an indelible mark in Yuxi's industrial history. This mark is embodied most concentratedly in the formation of a brand empire—today's Hongta Group.

6. Hongta Group: Hongtashan and a Brand Empire

The glory of the Yuxi Cigarette Factory ultimately crystallized in a resounding name—Hongta Group. This enterprise, named after Yuxi's landmark "Red Pagoda" (Hongta), is the undisputed flagship of Yuxi's industry and a heavyweight in China's tobacco industry. To understand Hongta Group and its brand empire is to understand the core of Yuxi's industry.

Hongta Group's brand portfolio is star-studded. It owns a series of nationally famous cigarette brands including "Hongtashan," "Yuxi," and "Hongmei." Among them, "Hongtashan" is its most renowned signboard—in the 1980s and 1990s, "Hongtashan" was one of the most prominent cigarette brands in China, a symbol of the premium and the respectable, and for a time in short supply. The "Yuxi" brand is positioned at the high end, known for refinement and quality, and is Hongta Group's mainstay in the premium market. Brands such as "Hongmei" cover broader market tiers. This multi-tiered brand portfolio lets Hongta Group cover a broad market from premium to mid-range, firmly holding an important share of China's cigarette market.

Hongta Group's strength rests first on the bedrock of quality. Drawing on Yunnan's fine flue-cured tobacco, together with the extreme emphasis on raw materials and craftsmanship established since the Chu Shijian era, Hongta Group's cigarette products are known for stable quality and excellent taste. In tobacco—a highly monopolized, fiercely competitive industry—quality is the lifeline of a brand. Hongta Group's decades-long adherence to quality is the fundamental reason its brands have endured and won consumers' trust. It is fair to say that the two characters "Hongta" represent a promise of quality.

The value of a brand is especially crucial in tobacco, a state-monopoly industry. Under the state monopoly system, the output and sale of cigarettes are strictly controlled, and competition among enterprises is, to a large degree, competition among brands. Whoever holds the stronger brand holds the higher market share, the greater pricing power, and the richer profits and taxes. Hongta Group holds a set of strong brands such as "Hongtashan" and "Yuxi"—this is its core competitiveness and the fundamental reason it can maintain a long-term leading position in the industry. The brand is Hongta Group's most valuable intangible asset and the deepest moat of Yuxi's tobacco.

The significance of Hongta Group to Yuxi can hardly be overstated. It is the absolute flagship of Yuxi's industry, contributing the bulk of the profits and taxes of Yuxi's industry and public finances, and is the greatest contributor to Yuxi's status as "per-capita champion." The prosperity of the city of Yuxi, its urban development, and its public services are, to a large degree, sustained by Hongta Group's profits and taxes. Every move Hongta Group makes bears on Yuxi's economic lifeline. This pattern of "one enterprise holding up a city" is uncommon among Chinese cities, and once again confirms Yuxi's feature of "tobacco dominance"—Yuxi's fate and Hongta's fate are tightly bound together.

Hongta Group's brand empire also carries a weighty historical memory. From the glory of "Hongtashan" famous across the nation in the Chu Shijian era, to the perseverance and inheritance of several generations of Yuxi's tobacco workers, Hongta Group has witnessed the development of China's tobacco industry and the rise of the city of Yuxi. Within the "Hongta" brand is crystallized not only commercial value but the glory and memory of a city. For the people of Yuxi, Hongta is not merely an enterprise or a brand but the pride and symbol of the city. This deep emotional bond is a distinctive and firm tie between Hongta Group and Yuxi.

Of course, as a brand empire, Hongta Group also faces the challenges of a new era. Tobacco control is a global trend, and the industry faces long-term pressure from a demand ceiling and tightening policy; consumers' tastes and preferences are changing; and competition within the industry remains fierce. How to hold on to its existing brand advantages while adapting to a new market environment and meeting the long-term challenge of tobacco control is a task Hongta Group must confront. And for Yuxi, a city of "tobacco dominance," the challenges Hongta Group faces are precisely its own—when the single pillar of tobacco meets its ceiling, how should Yuxi prepare in advance? This urgency is the deeper driver of Yuxi's "second venture." To understand this urgency, one must first see clearly just how heavy tobacco's weight is in Yuxi's economy.

7. Economic Weight: What a Single Cigarette Means to Yuxi

Just how heavily does tobacco weigh on Yuxi? This is not a matter of impression—it can be measured precisely with a set of hard numbers. When we break down Yuxi's industrial data, the sheer weight of tobacco makes tangible what it means for "a single cigarette to hold up an entire city."

Start with revenue. In 2024, Yuxi's industrial enterprises above designated size generated roughly 207.52 billion yuan in operating revenue, of which the tobacco products industry accounted for about 67.413 billion yuan—some 32.5% of the city's total above-scale industrial revenue. In other words, of every three-plus yuan of Yuxi's industrial revenue, one comes from tobacco. On revenue alone, tobacco is unquestionably Yuxi's largest industrial sector; every other industry combined amounts to only two-thirds. This ratio alone is enough to demonstrate tobacco's dominant position in Yuxi's industry.

But the weight of tobacco becomes even more striking when measured by profit. In 2024, above-scale industrial profit in Yuxi came to about 11.477 billion yuan, of which the tobacco products industry contributed roughly 8.364 billion yuan—around 73% of the city's total above-scale industrial profit. This is an extraordinarily lopsided ratio: of every ten yuan of profit earned by Yuxi's industry, more than seven come from tobacco, leaving less than three to be shared among all other industries combined. Revenue of three-tenths, profit of seven-tenths—this gap, in which the profit share far exceeds the revenue share, is precisely what marks tobacco as a high-margin, high-value-added golden industry. Yuxi's industrial profit is, in effect, almost entirely tobacco's profit.

Three-tenths of revenue, seven-tenths of profit—these two figures capture Yuxi's tobacco-dominant structure in the sharpest possible relief. They mean that the profitability of Yuxi's industry is bound overwhelmingly to this one sector; should tobacco's profits fluctuate, the profitability of Yuxi's entire industrial base would be dealt a heavy blow. This structure, in which profit is highly concentrated in a single industry, is the most distinctive and the most cautionary feature of Yuxi's economy. It is at once the source of Yuxi's prosperity and the locus of its fragility.

Tobacco's weight is also felt in public finance. As a high-tax, high-profit industry, tobacco has long been the single most important source of Yuxi's fiscal revenue. Tobacco tax underpins the city's public finances, sustaining its public services, infrastructure construction, and social welfare provision. That Yuxi became one of Yunnan's strongest cities in per-capita economic terms—with relatively ample public finances and decent urban development—owes above all to tobacco tax revenue. Tobacco is not merely Yuxi's largest industry; it is the mainstay of the city's finances. To a considerable degree, the functioning of this city rests on the taxes and profits generated by tobacco.

Tobacco's weight extends even to employment and the wider social fabric. The tobacco value chain—from tobacco-leaf cultivation upstream, through cigarette manufacturing and its supporting industries midstream, to related logistics and services—creates a large volume of employment and income for Yuxi. Tobacco-leaf cultivation in particular, as a form of "contract farming," has long been an important and stable source of cash income for many farmers in Yuxi and its surrounding areas. The fortunes of tobacco affect not only the factories and the treasury but also the livelihoods of countless tobacco farmers and industry workers. Tobacco is embedded deep within Yuxi's economic, fiscal, and social structure, serving as a critical support to the city in almost every dimension.

Set these figures and facts side by side, and "a single cigarette holding up an entire city" ceases to be exaggerated rhetoric and becomes a precise, quantifiable reality. Tobacco contributes roughly one-third of Yuxi's industrial revenue, some seven-tenths of its profit, the bulk of its fiscal revenue, and a large share of its employment. It is, deservedly, Yuxi's economic pillar, fiscal mainstay, and social bedrock. This considerable weight is both Yuxi's pride and its foundation, and also a lingering source of anxiety and risk. For when a city places so many of its eggs in a single basket, the consequences of that basket failing would be dire. This brings us to a problem Yuxi must confront squarely—the price of being tobacco-dominant.

8. The Price of Tobacco Dominance: Structural Lock-In

"A single cigarette holding up an entire city" is Yuxi's glory, and also its predicament. When a city's economy depends excessively on a single industry, it falls into a bind known as "structural lock-in"—the entire economic system becomes trapped in a path dependence on one industry, from which it is hard to extricate itself. The price Yuxi pays for its tobacco dominance is precisely this structural lock-in. Only by understanding this price can one grasp the urgency and the difficulty of Yuxi's "second venture."

The first price of structural lock-in is fragility in the face of risk. When seven-tenths of a city's industrial profit comes from tobacco, its economic fate is deeply tied to that one industry. Should the tobacco sector fluctuate—whether through tighter tobacco-control policy, adjustments to excise taxes, shrinking market demand, or intensifying industry competition—Yuxi's economy and public finances would suffer a heavy blow, with no other industries to hedge and cushion it. The risk of "putting all one's eggs in a single basket" is vividly embodied in Yuxi. This vulnerability is the most direct price of tobacco dominance.

The second price of structural lock-in is inertia in industrial upgrading. Tobacco is a high-margin, highly stable golden industry—it "makes money while lying down." When a city sits atop such a money-printing machine, the urgency and drive to develop other industries are dulled. If tobacco can effortlessly deliver the bulk of tax and profit, why go to the trouble of nurturing emerging industries that demand heavy investment, deliver slow returns, and carry high risk? This "comfort-zone dependence" is a common affliction of resource-based, single-pillar cities. It can cause a city to lose, imperceptibly, both the drive and the capacity for industrial diversification, and to miss the window for transformation and upgrading. To break this inertia, Yuxi needs great clarity and resolve.

The third price of structural lock-in is a "siphoning" and misallocation of factors. As a high-margin industry, tobacco draws a city's capital, talent, policy support, and other high-quality factors toward itself, leaving relatively limited resources for other industries. The best talent wants to join tobacco enterprises; the best policies tilt toward tobacco; the most capital flows into tobacco-related fields. This one-directional flow of factors further entrenches the tobacco-dominant structure and squeezes the growth space of other industries. Over time, Yuxi has formed an imbalanced pattern in which "tobacco stands alone in brilliance while other industries remain relatively weak." Changing this pattern requires deliberately steering factors toward emerging industries.

The fourth price of structural lock-in is a constrained imagination for development. When a city's identity, reputation, and even self-perception are all deeply bound to tobacco, it is easily defined and confined by the label of a "tobacco city." Mention Yuxi and people think of cigarettes; Yuxi, in turn, habitually plans its development around tobacco. This path-dependent mindset limits a city's imagination and boldness in exploring new directions and embracing new opportunities. For Yuxi to achieve transformation, it must diversify not only its industries but also its thinking—breaking out of the self-imposed limits of the "tobacco city" and reimagining the many possibilities of being a modern industrial city.

Especially pressing is that the tobacco pillar itself faces a long-term ceiling. Tobacco control is an irreversible global trend; as health awareness rises and tobacco-control policies advance, the market space for the tobacco industry is set to narrow over the long run. Although tobacco's taxes and profits remain secure in the near term, over the long horizon a Yuxi so dependent on tobacco must prepare early for the day tobacco peaks. Were it to wait until the tobacco pillar had visibly declined before transforming passively, Yuxi would face enormous difficulty; but by planning ahead and proactively positioning itself in emerging industries while the tobacco dividend still holds and finances remain ample, it can seize the initiative for the city's future. This is the deepest motive behind Yuxi's "second venture."

It must be said objectively that the tobacco-dominant structure is not Yuxi's fault, but the result of a specific resource endowment and historical development. Sitting on Yunnan's high-quality tobacco-leaf resources and home to a tobacco giant like Hongta, Yuxi found it all but inevitable that tobacco would become the dominant industry. Moreover, as ballast, tobacco has provided Yuxi with ample public finances and leading per-capita income; its contribution cannot be denied. The crux of the problem lies not in "having tobacco" but in "having only tobacco"—in an excessively single-industry structure. Yuxi's goal in transformation, therefore, is not to abandon tobacco (which would be neither realistic nor necessary), but to cultivate new, diverse pillars able to stand alongside it while holding its tobacco base steady, thereby changing the imbalanced tobacco-dominant structure. This is the most fundamental and the most arduous task of Yuxi's industrial transformation. And to understand the full ecosystem of Yuxi's tobacco, one must see that tobacco is not merely a cigarette factory—behind it lies a complete supporting value chain.

9. The Tobacco Value Chain: More Than a Single Cigarette

To speak of Yuxi's tobacco while looking only at Hongta Group, a single cigarette factory, is to underestimate tobacco's true weight in Yuxi. For tobacco is not an isolated industry but a rather long value chain—from tobacco-leaf cultivation upstream, through cigarette manufacturing and supporting materials midstream, to logistics and sales downstream. This complete value chain is the true "sphere of influence" that tobacco holds in Yuxi's economy. Only by understanding this chain can one grasp why tobacco is so deeply embedded in Yuxi's economy and society.

At the very top of the chain is tobacco-leaf cultivation. Yuxi and the neighboring areas of Qujing and Honghe form a core national production zone for high-quality flue-cured tobacco. Its high altitude, ample sunshine, and large diurnal temperature swings have nurtured flue-cured tobacco of excellent quality—the indispensable raw-material foundation for producing fine cigarettes. Tobacco-leaf cultivation, as a form of "contract farming," provides a stable income source for the broad rural areas of Yuxi and its surroundings. From the Chu Shijian era's principle that "the tobacco field is the first workshop," Yuxi brought tobacco-leaf cultivation under the strict management of the tobacco value chain, ensuring raw-material quality. High-quality tobacco leaf upstream is the wellspring of the competitiveness of Yuxi's tobacco.

Midstream on the chain, beyond cigarette manufacturing itself, lies a cluster of important supporting industries. Producing a single cigarette requires a range of tobacco materials—cigarette filter rods (the cigarette's filter tip), cigarette labels (the packaging and labeling of the pack), cigarette paper, flavors and fragrances, and more. It also requires tobacco machinery—tobacco-processing equipment, cigarette-making and tipping equipment, packaging equipment, and other specialized machinery. These supporting industries, though less conspicuous than cigarette manufacturing, are indispensable links in the tobacco value chain. Around Hongta Group, the cigarette-manufacturing leader, Yuxi and its surrounds have formed a group of supporting enterprises in tobacco materials, tobacco machinery, and printing and packaging, constituting the midstream ecosystem of the tobacco value chain.

The value of tobacco's supporting industries should not be underestimated. Take filter rods: they are a key component of cigarettes, with stable market demand and a certain technical threshold. Take cigarette-label printing: the packaging of premium cigarettes places high demands on printing craftsmanship, making it a high-value-added niche within the printing industry. Drawing on Yuxi's enormous tobacco-industry demand, these supporting industries have secured a stable market and room to grow, contributing output and employment to Yuxi. One might say that Hongta Group, as the cigarette-manufacturing leader, is like a great tree that shelters and drives a cluster of supporting enterprises, forming an industrial cluster centered on tobacco.

Downstream on the chain lies tobacco logistics and sales. Under the state monopoly system, cigarette sales operate through a tightly organized monopoly and distribution network. Around tobacco warehousing, logistics, and distribution, related industries and employment have also formed. In addition, the tobacco industry drives related services—finance, trade, business services, and more. This vast tobacco value chain, from field to factory to market, touches every dimension of Yuxi's economy, creating output, taxes, profits, and employment far beyond cigarette manufacturing itself. This is also why tobacco has been able to shape the city of Yuxi so profoundly.

The completeness and maturity of the tobacco value chain are an important component of the competitiveness of Yuxi's tobacco. The competitiveness of a mature industrial cluster lies not only in the leading enterprise itself, but also in the complete supporting network and industrial ecosystem that form around it. Over several decades of development, Yuxi has formed a complete tobacco value chain spanning tobacco-leaf cultivation, cigarette manufacturing, supporting materials, and logistics and sales. The completeness and maturity of this chain are a major advantage of Yuxi over other tobacco-producing regions. It gives Yuxi's tobacco industry deep roots and strong competitiveness, and makes tobacco a pillar for which Yuxi has no ready substitute.

Yet the very sophistication of the tobacco supporting value chain also deepens, from another angle, Yuxi's dependence on tobacco. When a city has not only cigarette factories but also a large body of supporting enterprises tied to tobacco, the entire city's economy is bound still more tightly to tobacco. When tobacco thrives, so do its supporting industries, employment flourishes, and finances are secure; should tobacco face challenges, the impact would extend beyond the cigarette factories to the many supporting enterprises and workers along the whole chain. This deep binding, in which "all prosper together and all suffer together," is another dimension of Yuxi's tobacco dominance. It is precisely for this reason that Yuxi's "second venture" must not only nurture new industries beyond tobacco, but also consider how to extend and convert the capabilities built along the tobacco supporting chain—such as precision manufacturing, printing, and materials—into other fields. And before contemplating the future, one must see clearly the present of the tobacco pillar—where Hongta Group stands within today's Chinese tobacco system.

10. Hongta Today: Yuxi Within the State-Enterprise System

The glory of the Chu Shijian era was long ago written into history, but the story of Hongta Group did not stop in the past. Today's Hongta Group, as a core enterprise within the China National Tobacco Corporation system (China Tobacco Yunnan), remains a pivotal giant in China's tobacco industry and remains the undisputed flagship of Yuxi's industry. Only by understanding Hongta Group's place within China's present-day tobacco system can one grasp the current state of Yuxi's tobacco pillar.

To understand Hongta today, one must first understand China's tobacco monopoly system. China operates a state tobacco monopoly, under which the nation's tobacco production and sales are centrally controlled by the state, and each province's cigarette industry is consolidated into a provincial China Tobacco company. Yunnan's cigarette industry is consolidated into China Tobacco Yunnan Industrial Co., Ltd., and Hongta Group (the Yuxi Cigarette Factory) is precisely one of the core enterprises under China Tobacco Yunnan (standing alongside the Kunming-headquartered Hongyun Honghe Group as China Tobacco Yunnan's two principal forces). Under this system, Hongta Group is no longer an isolated enterprise free to compete at will, but an important component of the state tobacco monopoly system. Its production plans, brand management, and market layout all operate within the framework of the state monopoly.

Within this system, Hongta Group still maintains formidable strength and a leading position. It holds a set of strong brands including "Hongtashan" and "Yuxi," commands a significant share of China's cigarette market, and is one of the industry's leading enterprises in scale and profitability. While the monopoly system constrains free competition among enterprises, it also ensures the industry's stability and its high taxes and profits, allowing Hongta Group to operate continuously in a relatively stable and predictable environment. As a member of the state-enterprise system (China National Tobacco Corporation), Hongta Group draws strength from the state monopoly, and both the stability of its operations and the reliability of its taxes and profits are well assured. This is the institutional foundation on which Yuxi's tobacco pillar can remain solid over the long run.

Hongta under the monopoly system is also continually pursuing modernization and premiumization. Facing consumption upgrades and market shifts, Hongta Group keeps optimizing its product mix, advancing brand premiumization (such as the high-end positioning of the "Yuxi" brand) and raising the quality and added value of its cigarettes; at the same time, it continues to invest in intelligent and green production, advancing modern cigarette manufacturing. As a long-established enterprise with deep accumulation, Hongta Group is keeping pace with the times to raise its level of modernization while holding on to its existing brand advantages. This enables it to sustain its competitiveness and leading position within the monopoly system.

For Yuxi, Hongta Group's solid position within the state-enterprise system is both a safeguard and a constraint. On the safeguarding side: backed by the state monopoly and the China National Tobacco Corporation system, Hongta Group's operations are stable and its taxes and profits reliable, providing Yuxi with an exceptionally solid fiscal and economic pillar—the very foundation of Yuxi's enduring prosperity. On the constraining side: as a member of the monopoly system, Hongta Group's development is bound by national tobacco policy and planning, and the room for growth in its scale and its tax-and-profit contribution depends largely on national tobacco policy and the trajectory of the industry as a whole, rather than on what the enterprise itself can fully determine. Yuxi's tobacco pillar is thus closely tied to the direction of national tobacco policy.

What must be faced especially squarely is that the entire Chinese tobacco industry confronts the long-term trend of tobacco control. As the Healthy China strategy advances, tobacco-control efforts intensify, and public health awareness rises, tobacco consumption faces, over the long run, pressure toward saturation and even contraction of demand. Although the tobacco industry remains solid and its taxes and profits remain ample in the near term, over the long horizon the backdrop of tobacco control is a long-term variable hanging over the entire tobacco industry—and over Yuxi, this "tobacco city." As the industry leader, Hongta Group must plan its future prudently against this backdrop; and Yuxi, as a city so dependent on tobacco, must prepare all the more for the long-term trend of tobacco peaking.

Hongta Group's present is a picture of "solid yet shadowed by concern." Solid, in that it is backed by the monopoly system, holds strong brands, occupies a leading position, and delivers reliable taxes and profits, providing Yuxi a firm pillar; shadowed by concern, in that it is subject to tobacco policy, faces the tobacco-control trend, and has limited room for growth, leaving its long-term prospects uncertain. This picture is precisely a portrait of the situation of the whole city of Yuxi—guarding a pillar that is solid and ample, yet faces a long-term ceiling. It is exactly this clear-eyed recognition of being "solid yet shadowed by concern" that drives Yuxi onto the path of a "second venture." But before turning to that transformation, one must see the rest of Yuxi's industrial assets beyond tobacco—first among them its equally long tradition of mining and metallurgy.

11. A Tradition of Mining and Metallurgy: Dahongshan and Yuxi's Steel Foundation

Beyond the dazzling pillar of tobacco, Yuxi holds another industrial asset—less known to the outside world, yet equally substantial: mining and metallurgy. Located in central Yunnan, Yuxi is rich in mineral resources and has a long tradition of mining and smelting. The mining-and-metallurgy sector, epitomized by the Dahongshan Iron Mine, is another important pillar of Yuxi's industry beyond tobacco, and an essential part of the city's dual "tobacco-plus-mining-and-metallurgy" foundation.

One of the core resources of Yuxi's mining and metallurgy is the Dahongshan Iron Mine. It is one of the largest iron mines in Yunnan, rich in iron-ore resources, and an important raw-material base for the steel industry of Yuxi and Yunnan alike. Around the Dahongshan Iron Mine, Yuxi has formed a value chain running from iron-ore mining and beneficiation to smelting. With abundant local iron-ore resources as raw-material support, Yuxi enjoys uniquely favorable conditions for developing a steel industry. The Dahongshan Iron Mine is the resource cornerstone of Yuxi's mining-and-metallurgy sector, and the reason Yuxi has been able to become an important steel base in Yunnan.

Drawing on local iron-ore resources, Yuxi's steel industry is of considerable scale. In 2024, Yuxi's pig-iron output reached about 5.106 million tonnes—a substantial figure, indicating that Yuxi is one of Yunnan's important steel-production bases. As a basic raw material, steel provides material support for construction, infrastructure, and machinery manufacturing in Yunnan and beyond. Yuxi's steel industry, though not as renowned as tobacco, is a genuinely heavyweight component of the city's industrial system and an important foundation for the diversification of Yuxi's industry.

Yuxi's tradition of mining and metallurgy is also reflected in its diverse mineral resources. Besides iron ore, Yuxi and its surrounding areas hold a variety of mineral resources including copper and phosphorus. These minerals provide a basis for Yuxi to develop resource-based industries such as nonferrous metals and chemicals. One might say that Yuxi is not only a "tobacco city" but also a "mineral city"—beneath its ground lies an equally rich store of industrial wealth. This mineral endowment gives Yuxi's industry, alongside the "soft" consumer-goods pillar of tobacco, a "hard" resource-based pillar of mining and metallurgy—forming a dual foundation of one soft and one hard.

Historically, mining and metallurgy is an ancient industrial tradition of Yuxi. Central Yunnan has a long history of mining and smelting, and Yuxi, as part of this region, carries deep mining-and-metallurgy accumulation. This tradition has left Yuxi with valuable industrial foundations—mineral resources, smelting technology, and an industrial workforce. In modern times, Yuxi has developed this ancient tradition into a modern metallurgical industry epitomized by steel, making it an important pillar of the city's industry. The continuation and modernization of the mining-and-metallurgy tradition is one expression of the depth of Yuxi's industrial heritage.

However, like all resource-based industries, Yuxi's mining and metallurgy carries the typical characteristics and challenges of resource-based industry. On one hand, it is large in scale and strong in its pull, an important support for the city's industry; on the other, it faces the problems common to resource-based industries—products skewed toward the primary, low added value, heavy exposure to market-price volatility, significant environmental pressure, and the long-term concern that resources will eventually be exhausted. The steel industry also faces chronic overcapacity and profit volatility. These are all challenges Yuxi's mining-and-metallurgy sector must address in its development. How to push the sector to upgrade toward the high end, toward green production, and toward deep and refined processing is key to Yuxi strengthening this pillar.

The significance of the mining-and-metallurgy sector for Yuxi lies in providing this tobacco-dominant city with an important non-tobacco pillar. Beyond tobacco, resource-based industries such as steel and nonferrous metals are an important foundation for the diversification of Yuxi's industry and a realistic lever for reducing its dependence on tobacco. Although the profitability and weight of the mining-and-metallurgy sector are still far from matching tobacco's, its existence keeps Yuxi's industrial structure from resting entirely on a single cigarette. Moreover, the sector can provide upstream support for Yuxi's emerging industries (such as some of the metal materials needed for new-energy batteries), forming synergies with them. Yuxi's mining-and-metallurgy tradition is a weighty ballast among its industrial assets. And within these assets, the most dynamic piece is its steel industry—especially the bold private investment of recent years.

12. Yukun Iron & Steel: A Bold Move by Private Steel

Within Yuxi's steel industry, private steel is a force not to be overlooked. Private steel enterprises epitomized by Yukun Iron & Steel and Xianfu Steel, with their flexible mechanisms and bold investment, have become the most dynamic piece of Yuxi's mining-and-metallurgy sector. Their development has injected into this "tobacco city" a private-sector vitality distinct from the state-owned tobacco economy.

Yukun Iron & Steel is one of the representatives of Yuxi's private steel. In recent years, Yukun Iron & Steel has advanced large-scale capacity-upgrading and relocation-and-renovation projects, with investment on the order of tens of billions of yuan (related projects are reported to involve investment of about 21.2 billion yuan). Such bold investment is quite rare among Yuxi's non-tobacco industries; it reflects the daring of private enterprise to venture and invest, and shows Yuxi's determination to upgrade its steel industry. Through such major projects, Yuxi's steel industry can retire outdated capacity, raise its equipment standards, optimize its product mix, and upgrade toward modernization and green production. Yukun Iron & Steel's investment is a landmark move in the transformation and upgrading of Yuxi's mining-and-metallurgy sector.

The value of private steel lies first in the tangible capacity, output, and employment it contributes to Yuxi. As noted earlier, Yuxi's pig-iron output in 2024 was about 5.106 million tonnes, of which private steel enterprises contributed an important share. As a basic raw material, steel supports construction, infrastructure, and manufacturing across the region and is an important component of the city's industry. With their large-scale production, private steel enterprises have become an important source of output and employment for Yuxi's industry beyond tobacco, and an important force in the diversification of Yuxi's industry.

Another dimension of private steel's value lies in the vitality of the private economy it injects into Yuxi. Yuxi is a city dominated by a state-owned tobacco economy, where large state enterprises like Hongta Group are the undisputed protagonists. The existence and growth of private steel enterprises such as Yukun and Xianfu add a private-sector component and vitality to Yuxi's economy. Private enterprises—with flexible mechanisms, market sensitivity, and the daring to venture—are an important force for stimulating economic vitality and strengthening economic resilience. In a city dominated by a state-owned tobacco economy, cultivating and growing the private economy carries significant meaning for optimizing the economic structure and strengthening the impetus for development. The growth of Yuxi's private steel is a bright spot of the city's private economy.

Of course, as steel enterprises, Yukun, Xianfu, and others also face the challenges common to the steel industry. Steel is a typical resource-based, cyclical industry, long beset by overcapacity, profit volatility, and environmental pressure. Under the dual-carbon goals in particular, steel—as a high-energy-consuming, high-emission industry—faces enormous emissions-reduction pressure. For Yuxi's private steel enterprises to achieve sustainable development, they must work hard on green production and premiumization—using Yunnan's green electricity to cut carbon emissions, raising the technological content and added value of their products, and advancing the circular economy. This is both a challenge and an opportunity for transformation and upgrading. Whoever completes the green and premium transformation first will be able to hold firm through the shakeout of the steel industry.

The green transformation of Yuxi's steel industry can draw precisely on Yunnan's green-electricity advantage. Yunnan is a major green-electricity province, with a high share of clean-energy generation. If Yuxi's steel enterprises can use more green electricity, raise the proportion of electric-arc-furnace steel, and explore green, low-carbon metallurgy, they can significantly cut carbon emissions, transforming "high-carbon steel" into "relatively low-carbon steel" and gaining a competitive advantage in the dual-carbon era. This is in the same vein as the logic of Yunnan's green aluminum and green silicon—"using green electricity to decarbonize and green high-energy-consuming industries." Green steel may well be an important future direction for Yuxi's steel industry. By combining its green-electricity advantage with its steel industry, Yuxi has the prospect of forging a new path for the green transformation of resource-based heavy industry.

The bold investment of Yuxi's private steel also sends a positive signal—that Yuxi is striving to strengthen its non-tobacco industries and advance industrial diversification. Beyond the solid pillar of tobacco, Yuxi has not stood still but is actively cultivating other industries such as steel, working to change its tobacco-dominant structure. The tens of billions of yuan invested in private steel are a concrete action in Yuxi's "second venture" and its development of diverse industries. Although steel's profitability cannot yet match tobacco's, it represents the direction of Yuxi's efforts to diversify its industry. And beyond steel, Yuxi's nonferrous-metals industry is likewise a piece of its mining-and-metallurgy assets worth noting.

13. Nonferrous Metals and the Predicament of Resource-Based Industry

Beyond iron ore and steel, Yuxi's mining-and-metallurgy assets also include nonferrous metals. Yuxi and its surrounding areas hold nonferrous-metal deposits such as copper, and around these resources corresponding mining, beneficiation, and smelting industries have formed. Nonferrous metals are yet another component of Yuxi's mining-and-metallurgy sector, adding further diversity to the city's resource-based industry. But like all resource-based industries, Yuxi's nonferrous metals and its mining-and-metallurgy sector face the typical predicament of resource-based industry.

Yuxi's nonferrous-metals industry centers on the mining and smelting of copper and similar metals. Copper is one of the most fundamental metals of modern industry, widely used in electric power, electronics, home appliances, new energy, and other fields. Amid the wave of electrification, demand for copper is favorable over the long run, providing stable downstream support for Yuxi's copper industry. Around local copper-ore resources, Yuxi has formed a value chain from mining and beneficiation to smelting—an important component of its mining-and-metallurgy sector. In addition, Yuxi's mineral resources include phosphorus and others, providing raw materials for chemicals and other industries. Together, these mineral resources constitute the assets of Yuxi as a "mineral city."

Yet Yuxi's nonferrous metals, and its entire mining-and-metallurgy sector, bear the typical mark and predicament of resource-based industry. The first predicament is products skewed toward the primary, with low added value. Yuxi's mining-and-metallurgy sector remains, to a large extent, at the stage of mining and primary smelting, while the highest-value-added deep processing, high-end materials, and end-product manufacturing account for too small a share. Much of the ore that is dug up and the primary metal that is smelted is sold in the form of primary products, with the bulk of the added value remaining downstream. This is a typical manifestation of resource-based industry being "large but not strong," and Yuxi's mining-and-metallurgy sector is no exception.

The second predicament is heavy exposure to market-cycle volatility. The prices of mineral products and primary metals, driven by supply-and-demand relationships in domestic and international markets, fluctuate sharply. When metal prices surge, mining-and-metallurgy enterprises enjoy ample profits; when prices fall, they may slide into losses. This "living at the mercy of the market" trait leaves the profitability of Yuxi's mining-and-metallurgy sector unstable and its risk resistance weak. The steel industry, moreover, is chronically plagued by overcapacity, further amplifying the impact of cyclical volatility. This cyclicality of resource-based industry is a reality Yuxi's mining-and-metallurgy sector must confront.

The third predicament is environmental pressure and resource constraints. Mining and smelting are both high-energy-consuming, high-emission industries with considerable environmental impact. Against a backdrop of increasingly stringent ecological and environmental requirements and the comprehensive advance of the dual-carbon goals, Yuxi's mining-and-metallurgy sector faces enormous environmental and emissions-reduction pressure. At the same time, mineral resources are, after all, non-renewable; as extraction continues, resources will eventually face exhaustion. These are long-term constraints that resource-based industries cannot avoid. For Yuxi's mining-and-metallurgy sector to develop sustainably, it must work hard on green production, recycling, and the efficient use of resources.

In the face of these predicaments, the way out for Yuxi's mining-and-metallurgy sector lies in "moving toward the high end and turning green." Moving toward the high end means extending the value chain—from selling ore and primary metals toward deep processing, high-end materials, and end-product manufacturing, thereby raising added value. For example, processing copper into high-end copper products and electronic copper foil (usable in lithium batteries and electronics), and making steel into special steels and high-end steel products. Turning green means using Yunnan's green electricity to advance green metallurgy and green steel, cutting carbon emissions and transforming resource-based heavy industry into a green, low-carbon industry. These two paths are the keys for Yuxi's mining-and-metallurgy sector to break the resource-based predicament and achieve transformation and upgrading.

Especially worth noting is the space for synergy between Yuxi's mining-and-metallurgy sector and the emerging industries it is cultivating. For instance, new-energy batteries require copper foil and various metal materials, and Yuxi's nonferrous-metals industry can provide part of the upstream support; green steel and green nonferrous metals are themselves important components of green manufacturing. If Yuxi can connect its traditional mining-and-metallurgy sector with the emerging new-energy industry, putting "old resources" to work for the "new track," it can achieve a virtuous interaction between traditional and emerging industries. This, too, is an important approach in Yuxi's "second venture"—not abandoning traditional industries, but upgrading them and forging synergies with emerging ones.

Yuxi's mining-and-metallurgy sector is an important part of its industrial assets "beyond tobacco," and also a concentrated embodiment of the predicament of resource-based industry. It is considerable in scale and solid in foundation, yet also faces the challenges common to resource-based industries—low added value, cyclical volatility, and environmental constraints. Breaking these predicaments and pushing the mining-and-metallurgy sector to upgrade toward the high end and toward green production is an important task for Yuxi in strengthening its non-tobacco industries and advancing industrial diversification. And the most fundamental driving force behind Yuxi's industrial transformation comes from a profound clarity—an alertness to the risk of tobacco dominance, and a recognition of the urgency of a "second venture." It is precisely this clarity that has set Yuxi on the path of transformation—cultivating emerging industries and seeking a second growth curve.

14. The Second Venture: Awakening from Tobacco Dependence

Sitting atop tobacco — a stable and lucrative pillar — Yuxi could have comfortably coasted on easy wins. What is remarkable, however, is that Yuxi did not linger in the comfort zone that tobacco provided. Instead, it recognised with clear eyes the long-term risk of being "dominated by a single crop" and voluntarily set out on the road of transformation known as the "second venture." This awareness — vigilance in times of security — is the most valuable starting point of Yuxi's industrial transformation, and it is the key to understanding Yuxi's future.

The very phrasing "second venture" is telling. It acknowledges the success of Yuxi's "first venture" — it was precisely the rise of tobacco that made Yuxi prosperous and brilliant. But it also soberly points out that the fruits of that "first venture" in tobacco alone are not enough to sustain Yuxi's long-term future; Yuxi needs a new "second venture" aimed at diversification, cultivating new pillars beyond tobacco to win the city new engines of growth and a more sustainable future. The shift from "first venture" to "second venture" reflects Yuxi's deep understanding of its own stage of development and its structural risks.

Several profound sources of urgency drive the "second venture." The first comes from the long-term trend of tobacco control. The tobacco industry has long faced pressure from a peaking of demand and tightening policy, and Yuxi — overly dependent on tobacco — must prepare early for the arrival of the "tobacco ceiling." The second comes from the risk of structural imbalance. A structure "dominated by a single crop" leaves Yuxi's economy fragile in its capacity to withstand shocks: any fluctuation in tobacco reverberates across the whole, and this risk must be defused through diversification. The third comes from the demands of high-quality development. A development model that relies solely on tobacco, while delivering a leading position in per-capita terms, is neither structurally healthy nor sufficiently sustainable; for Yuxi to achieve high-quality development, it must optimise its industrial structure and cultivate new drivers. These three sources of urgency together gave rise to Yuxi's resolve to pursue a "second venture."

The core of the "second venture" is industrial diversification and the transition between old and new drivers. Its goal is not to abandon tobacco (which would be neither realistic nor necessary), but rather to hold on to the tobacco base while cultivating new, diversified pillars capable of standing shoulder to shoulder with tobacco, thereby changing the imbalanced structure "dominated by a single crop." Concretely, this means vigorously developing emerging industries beyond tobacco — especially strategic emerging industries such as new-energy batteries — while simultaneously promoting the transformation and upgrading of traditional industries such as mining and metallurgy, and developing plateau-characteristic agriculture, the digital economy, and more, so as to build a modern industrial system with diversified support and a healthy structure. Moving from "a single cigarette" to "multiple pillars" is the most fundamental direction of Yuxi's "second venture."

Among the many directions of the "second venture," Yuxi has made new-energy batteries its main thrust and its "No. 1 project." This is a strategically astute choice. New-energy batteries are one of the most growth-oriented strategic emerging industries amid the global energy revolution and the wave of electrification, with vast market space and bright prospects. And Yuxi's development of new-energy batteries rests on unique advantages: it is home to Yunnan Energy New Material (Semcorp), the world's largest lithium-battery separator leader, headquartered right in Yuxi; it enjoys Yunnan's green-electricity advantage; and it has upstream phosphorus-chemical support from firms such as Yuntianhua (the phosphorus source for lithium iron phosphate). With a world-class separator champion on its doorstep, plus supporting green electricity and phosphate rock, Yuxi's development of new-energy batteries can truly be described as being "well placed by the water's edge." Building new-energy batteries into a new pillar to succeed tobacco is where the greatest hope of Yuxi's "second venture" lies.

For Yuxi, the "second venture" is a profound and arduous transformation. It is arduous because cultivating a new pillar industry from a relatively weak base, within a city dominated by tobacco, requires overcoming numerous difficulties in capital, talent, technology and markets, and demands long-term investment and persistence. It is profound because it is not merely an adjustment of industries, but a systemic transformation of development philosophy, ways of thinking and factor allocation — Yuxi must break free from the path dependence of a "tobacco city" and reimagine and reshape its future as a diversified, modern industrial city. There are no shortcuts in this transformation; it demands great clarity, resolve and steadfastness.

But the direction is clear and the action is firm. Yuxi has soberly recognised the risk of being "dominated by a single crop," has firmly made emerging industries such as new-energy batteries its main thrust, and has begun concrete, substantive planning and investment. This awareness of danger amid security, and this proactive drive for change, are precisely Yuxi's most valuable qualities — it has not rested on the laurels of tobacco to sit and eat away its fortune, but rather, while the tobacco dividend still holds and fiscal resources remain ample, has proactively laid out new pillars for the city's future. This strategic clarity of "planning ahead and transforming proactively" is the key to whether Yuxi can successfully carry out its "second venture." And the most central and most promising battle of this "second venture" is the building of a "new-energy battery capital." This ambition is worth examining in depth.

15. The New-Energy Battery Capital: A City's Ambition

Among the many directions of Yuxi's "second venture," the most dazzling and most strategically ambitious is the drive to build a "new-energy battery capital." This phrasing itself carries a striving spirit unwilling to settle for being merely a "tobacco city" — Yuxi seeks to build, beyond tobacco, a new pillar in a strategic emerging industry. This ambition is the most central battle of Yuxi's industrial transformation, and it is where the city's greatest hope for the future lies.

Why did Yuxi choose new-energy batteries as its main thrust? There is a clear strategic logic behind this. New-energy batteries are one of the most growth-oriented strategic emerging industries amid the global energy revolution and the wave of electrification. As electric vehicles become widespread, the energy-storage market explodes, and the global energy transition advances, demand for power batteries and energy-storage batteries continues to grow at high speed, and the market space is extremely broad. To bet on new-energy batteries is to bet on the future — to bet on a golden track in an explosive growth phase with bright prospects. For a Yuxi eager to cultivate new pillars, new-energy batteries are a highly attractive choice.

And Yuxi's development of new-energy batteries is by no means blind bandwagon-jumping; it rests on unique advantages that few other cities can match. The first and most crucial advantage is that it is home to a world-class local leader — Yunnan Energy New Material (Semcorp). Semcorp is the world's largest supplier of lithium-battery separators, and its headquarters is in Yuxi. With such a global champion on its doorstep, Yuxi's development of new-energy batteries can truly be described as "the pavilion nearest the water catches the moonlight first." The second advantage is Yunnan's green electricity — the production of new-energy materials is highly energy-intensive, and Yunnan's abundant green electricity gives Yuxi cost and low-carbon advantages in developing lithium-battery materials. The third advantage is the upstream support of phosphorus chemicals — the core raw material of lithium iron phosphate batteries is phosphorus, and Yunnan is a major phosphate-rock province, home to phosphorus-chemical leaders such as Yuntianhua, which can supply the phosphorus source for Yuxi's lithium-battery industry. The overlay of these three advantages — leader, green electricity and phosphorus source — gives Yuxi a solid foundation for developing new-energy batteries.

The core lever of Yuxi's drive to build a "new-energy battery capital" is an ambitious hundred-billion-yuan industrial cluster. Anchored by Semcorp and joined with industry leaders such as Yuntianhua, EVE Energy and Huayou, Yuxi is planning to build a new-energy battery industrial cluster covering key links such as separators, cathode materials, cells and copper foil. According to the plan, this cluster targets an industrial scale on the order of a hundred billion yuan. Semcorp supplies separators (a global champion), Yuntianhua supplies the phosphorus source and materials needed for lithium iron phosphate cathodes, EVE Energy supplies cell manufacturing, and firms such as Huayou supply copper foil, cathodes and other supporting components — a four-way alliance covering multiple key links of the new-energy battery value chain. Such a hundred-billion-yuan cluster jointly built by multiple leaders is the core vehicle of Yuxi's "new-energy battery capital" ambition.

It must be stated objectively that this hundred-billion-yuan cluster is for now more "planning and commitment" than "accomplished reality." According to available data, the cluster's phase-one and phase-two projects involve investment of around 51.7 billion yuan, while the phase-three target is to "break through 100 billion yuan" — these figures are planned and pledged investment intentions, and their ultimate degree of realisation and their production ramp-up still need time to be verified. Cultivating an industrial cluster is a long-term process; from signing and groundbreaking through construction to commissioning and reaching full production, there is a long road ahead, and many uncertainties remain. We must therefore recognise both Yuxi's ambition to build a "new-energy battery capital" and the layout already in place, while also acknowledging objectively that the true completion of this hundred-billion-yuan cluster will still take time and require arduous effort.

Even so, Yuxi's strategic choice of a "new-energy battery capital" and the layout already in place remain highly significant. They reflect the clarity and enterprise of Yuxi's "second venture" — refusing to settle for the comfort zone of tobacco and proactively betting on the industries of the future. They also demonstrate Yuxi's unique industrial advantages — with Semcorp, a world champion, on its doorstep, and relying on Yunnan's green electricity and phosphate rock, Yuxi genuinely enjoys exceptional conditions for developing new-energy batteries. If this hundred-billion-yuan cluster can be completed and reach production on schedule, Yuxi has the prospect of building, after tobacco, a new pillar in a strategic emerging industry, achieving a historic leap from being "dominated by a single crop" toward "dual-engine drive" and even "diversified support." This ambition is worth looking forward to, and worth striving for.

Behind the ambition of a "new-energy battery capital" stands a genuine world champion — Semcorp. It could be said that without Semcorp, Yuxi would lack the confidence to build a "new-energy battery capital." This enterprise — headquartered in Yuxi yet occupying a key position in the global lithium-battery value chain — is Yuxi's most precious industrial asset and the strongest card of its "second venture." To understand Yuxi's new-energy battery ambition, one must understand Semcorp in depth — a legendary enterprise that turned "a thin film" into a world champion.

16. Semcorp: A World Champion in a Single Separator (Part I)

Among all of Yuxi's enterprises, apart from the Hongta Group, the one carrying the most weight is Semcorp. If Hongta represents the past and present of Yuxi's industry, then Semcorp represents its future. This enterprise — headquartered in Yuxi and making products as thin as a cicada's wing — is the world's top supplier of lithium-battery separators, and the strongest card of Yuxi's "second venture." To understand Semcorp is to understand the source of confidence behind Yuxi's new-energy battery ambition.

First, an explanation of what Semcorp does. The core product of Yunnan Energy New Material (Semcorp) (stock code 002812) is the lithium-battery separator. A lithium battery consists of four main parts — cathode, anode, electrolyte and separator — and the separator is a porous polymer film sandwiched between the cathode and anode. It must both keep the cathode and anode apart to prevent short circuits and allow lithium ions to pass through freely; it is a key component ensuring the battery's safety and performance. Thin as a cicada's wing though it may be, the separator carries an extremely high technical threshold, especially the manufacture of the wet-process separator, whose complex process and exacting precision requirements have long been mastered by only a handful of enterprises. And Semcorp is precisely the world's largest supplier of wet-process lithium-battery separators — its separator products are supplied to top global battery makers such as CATL, BYD, LG and Panasonic.

Just how lofty is Semcorp's standing? In the niche field of lithium-battery separators, Semcorp is the undisputed top player globally, with market share ranking first in the world. Of the vast quantity of lithium batteries produced worldwide, a considerable portion uses Semcorp's separators. A tiny thin film has placed this Yuxi-headquartered enterprise at a key position in the global lithium-battery value chain. In an era of explosive growth in electric vehicles and energy storage, demand for separators — a key battery material — continues to grow at high speed, and Semcorp, as the global leader, occupies an extremely advantageous position. It could be said that Semcorp is one of the few high-end materials enterprises in Yuxi's, and indeed Yunnan's, manufacturing sector that genuinely commands global influence.

Behind Semcorp is the Li Xiaoming family. This enterprise started in packaging and printing; drawing on its technical accumulation in the field of polymer films, it keenly entered the high-barrier, high-growth track of lithium-battery separators, seized the historic wave of global electrification, and grew step by step into a world champion. From packaging films to lithium-battery separators, Semcorp's transformation and rise is a classic business story about technical accumulation, strategic vision and seizing a moment of opportunity. It proves that even an enterprise that started in a traditional industry and is located in the inland southwest can, so long as it has the technology, the vision and the ability to catch the trend, occupy the top of the value chain in global high-end manufacturing.

Semcorp's success carries special and significant meaning for Yuxi and for Yunnan's manufacturing sector. Yuxi is a city dominated by a state-owned tobacco economy and supplemented by resource-based industry, whereas Semcorp is a private high-end manufacturing enterprise that has established itself through technology and the market — it relies neither on Yuxi's minerals nor on tobacco's profits and taxes, but rather on decades of deep technical cultivation in the niche field of lithium-battery separators to become the world's No. 1. This is entirely different from traditional industries that rely on resources or on monopoly franchises. Semcorp proves that Yuxi can do more than traditional industries such as tobacco and mining and metallurgy; it can also nurture high-end materials enterprises that master core technology and occupy the global summit. This is a precious example of Yuxi's industry "breaking through upward," and it is the most persuasive source of confidence for its "second venture."

What is especially remarkable is that Semcorp is a world champion that is "home-grown," rooted in Yuxi. In China, many outstanding enterprises that have grown up often relocate their headquarters to first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen, out of considerations of financing, markets and talent. Yet Semcorp, as a global leader, still keeps its headquarters rooted in the small southwestern city of Yuxi. For Yuxi, this is a precious industrial asset — it means that Yuxi has not only Semcorp's manufacturing capacity but also its headquarters, R&D and decision-making nerve centre, and can fully enjoy the output, tax revenue, employment, brand and industrial spillovers this world champion brings. With a world champion's headquarters on its doorstep, Yuxi's drive to build a "new-energy battery capital" has a solid core and a leader to guide it.

Semcorp is to Yuxi like a pearl set into the city's industrial map. It is the core support for Yuxi's transformation from "a single cigarette" to "a single battery," the strongest trump card of Yuxi's "second venture," and the city's most precious industrial asset for the future. With the guidance of Semcorp, the global separator champion, Yuxi's drive to build a "new-energy battery capital" is no castle in the air but rests on a tangible leader and foundation. And Semcorp has not been content with its existing advantages; it continues to add capacity and lay out frontier technologies within Yuxi, injecting stronger momentum into Yuxi's new-energy battery industry. These new arrangements are the concrete realisation of Yuxi's new-energy battery ambition, and a vivid illustration of the deep binding and joint growth of Semcorp and Yuxi.

17. The Yuxi Base and Solid-State Batteries: Semcorp (Part II)

A world-champion enterprise, if it merely placed its headquarters in Yuxi while locating its capacity and R&D elsewhere, would have a much diminished pull on Yuxi. What is remarkable is that Semcorp not only roots its headquarters in Yuxi but also continues to add capacity and lay out frontier technologies locally. These concrete investments embody the deep binding and joint growth of Semcorp and Yuxi, and are the most solid realisation of Yuxi's "new-energy battery capital" ambition.

Consider first Semcorp's separator-capacity layout in Yuxi. Semcorp is investing in and building a large-scale separator production base in Yuxi; according to available data, the Yuxi separator project involves total investment of around 4.5 billion yuan (built in two phases — phase one at around 2.4 billion yuan and phase two at around 2.1 billion yuan), with a plan to build 16 separator production lines and a planned total capacity on the order of 1.6 billion square metres. Of these, the phase-one project was completed and commissioned by the end of 2024, and subsequent lines are being rolled out in succession — according to the plan, by around March 2026, eight production lines will achieve full line-through. Such a large-scale separator production base locating in Yuxi means that Yuxi is not only where Semcorp is headquartered but also one of its important production bases, able to fully enjoy the output, tax revenue and employment that Semcorp's manufacturing capacity brings.

Beyond separator capacity, Semcorp has also laid out, in Yuxi, a frontier technology oriented toward the future — solid-state battery materials. The solid-state battery is regarded as an important direction for the next generation of battery technology, offering higher safety and energy density, and is a frontier that the global battery industry is racing to master. Semcorp has moved early to lay out a key material for solid-state batteries — the sulfide solid-state electrolyte; according to available data, it has planned kilotonne-scale capacity (around 1,000 tonnes per year) of solid-state electrolyte in Yuxi, with investment on the order of several billion yuan (around 2.5 billion yuan). This layout is highly significant — it means Semcorp is not content with its existing global lead in separators, but is setting its sights on the next generation of battery technology, striving to maintain its lead into the solid-state battery era. And with these frontier arrangements landing in Yuxi, Yuxi is placed at the very cutting edge of new-energy battery technology.

Semcorp's arrangements in Yuxi carry decisive significance for Yuxi's drive to build a "new-energy battery capital." First, they convert Semcorp's status as the global separator leader into Yuxi's local capacity and industrial strength — Yuxi is not only "Semcorp's home" but also "where Semcorp makes separators." Second, they bring Yuxi to the frontier of new-energy battery technology — by laying out solid-state battery materials, Yuxi is not merely making existing lithium-battery materials but is positioning itself in the next generation of battery technology, seizing the commanding heights of the future. Third, they provide a strong leader-core for Yuxi's new-energy battery industrial cluster — around Semcorp's separator and solid-state battery layout, more battery and materials enterprises can be attracted and drawn to cluster in Yuxi. Semcorp's deep cultivation is the most solid support for Yuxi's new-energy battery ambition.

From an industrial-logic standpoint, Semcorp's layout in Yuxi also creates synergy with Yuxi's and Yunnan's other advantages. Making separators requires large amounts of electricity, and Yunnan's green electricity provides Semcorp with cost and low-carbon advantages; Semcorp's solid-state battery layout, along with the lithium iron phosphate cathodes that Yuxi is planning, can in turn form value-chain synergy with Yuntianhua's phosphorus chemicals (the phosphorus source) and EVE Energy's cell manufacturing. In other words, Semcorp is not developing in isolation in Yuxi but has formed, together with Yuxi's and Yunnan's green electricity, phosphate rock and other battery enterprises, a mutually supporting industrial ecosystem. This industrial synergy is the key to whether Yuxi's "new-energy battery capital" can take shape — it depends not on a single enterprise fighting alone but on the coordinated force of an industrial ecosystem.

Of course, Semcorp's layout in Yuxi must also be viewed with an objective and prudent attitude. On one hand, Semcorp's capacity and technology arrangements are tangible — the phase-one separator project is already in production, which is confirmed progress. On the other hand, the line-through of subsequent production lines and the industrialisation of solid-state battery materials are still being advanced, and their ultimate production ramp-up and market performance still need time to be verified. In addition, the lithium-battery industry has undergone dramatic cyclical fluctuations in recent years — overcapacity, price wars and pressure on profitability — and Semcorp, as the separator leader, has likewise been affected by the industry cycle. Yuxi's new-energy battery industry must likewise weather the test of the industry cycle. We must therefore recognise both the certain opportunities that Semcorp's deep cultivation of Yuxi brings and, soberly, the uncertainties and challenges within.

On the whole, Semcorp's deep cultivation of Yuxi — from rooting its headquarters, to laying out separator capacity, to staking out a frontier position in solid-state batteries — is the most solid cornerstone of Yuxi's "new-energy battery capital" ambition. It gives Yuxi a world-class industrial leader-core, places Yuxi at the technological frontier of new-energy batteries, and gives Yuxi's new-energy battery industry a solid foundation for moving from "planning" to "reality." With Semcorp at its core, Yuxi is planning a larger vision — a hundred-billion-yuan industrial cluster that unites multiple leaders and covers many key links of the battery value chain. The conception and progress of this cluster is the complete expression of Yuxi's "new-energy battery capital" ambition.

18. The Hundred-Billion-Yuan Cluster: A Four-Way Alliance's Industrial Ambition

Building a pillar in a strategic emerging industry cannot be achieved by a single enterprise fighting alone; it requires a complete industrial ecosystem and an industrial cluster acting in concert. Yuxi understands this well. With Semcorp at its core, and joined with multiple industry leaders such as Yuntianhua, EVE Energy and Huayou, it is planning to build a hundred-billion-yuan cluster covering many key links of the new-energy battery value chain. This "four-way alliance" industrial ambition is the most complete expression of Yuxi's "new-energy battery capital."

Consider first the value-chain layout of this cluster. A power battery is composed mainly of four key materials — cathode, anode, separator and electrolyte — plus the packaging and manufacture of the cell. Yuxi's hundred-billion-yuan cluster is laid out precisely around these key links: Semcorp supplies separators (a global champion); Yuntianhua, drawing on Yunnan's phosphate-rock resources, supplies the phosphorus source and materials needed for lithium iron phosphate cathodes; EVE Energy supplies cell manufacturing; and firms such as Huayou supply copper foil, cathode materials and other supporting components. The four parties each play to their strengths, covering multiple links from key materials to cell manufacturing and forming a relatively complete new-energy battery value chain. This layout of "leaders in alliance, chain in synergy" is the core thinking behind Yuxi's drive to build an industrial cluster.

In terms of capacity planning, the cluster's targets are quite grand. According to available data, the cluster plans capacity such as around 120,000 tonnes of lithium iron phosphate cathode material and around 40,000 tonnes of anode material, which, together with Semcorp's separator capacity, forms a large-scale, multi-link industrial layout. On investment, the cluster's phase-one and phase-two projects involve investment of around 51.7 billion yuan, while the phase-three target is to "break through 100 billion yuan." These figures sketch out the grand blueprint of a hundred-billion-yuan industrial cluster — if all of it is built and reaches full production, Yuxi's new-energy battery industry would reach a scale of a hundred billion yuan, enough to become another strategic pillar after tobacco.

The greatest advantage of this hundred-billion-yuan cluster lies in how closely it binds Yuxi's and Yunnan's unique endowments to the industrial strength of industry leaders. Yuxi has Semcorp (the global separator champion), Yunnan has phosphate rock (the phosphorus source for lithium iron phosphate) and green electricity (low-cost, low-carbon energy), while EVE Energy, Huayou and others bring the industrial strength of cell manufacturing and materials supply. Local endowments plus the strength of leaders give Yuxi's development of new-energy batteries a threefold support of "resources + energy + leaders." This unique combination of advantages is difficult for many other regions to replicate, and it is the source of confidence behind Yuxi's willingness to set a "hundred-billion-yuan cluster" target.

But it must again be stressed that this hundred-billion-yuan cluster is for now still mainly "planning and commitment," and its true completion and production ramp-up still need time and effort to be verified. Cultivating an industrial cluster is a long and complex process — from signing, groundbreaking and construction to commissioning, full production and the formation of competitiveness, there is a long road ahead, and it faces many uncertainties in capital, technology, markets and cycles. Especially against the backdrop of the lithium-battery industry undergoing dramatic cyclical fluctuations (overcapacity, price wars and pressure on profitability), whether Yuxi's hundred-billion-yuan cluster can be smoothly built, reach full production and turn a profit remains highly uncertain. We must therefore recognise both the grand ambition of this hundred-billion-yuan cluster and the layout already in place, while keeping a sober and objective view and not equating "the planned blueprint" with "accomplished reality."

Despite a path full of challenges, Yuxi's strategic choice to build a hundred-billion-yuan new-energy battery cluster and the layout already in place remain worthy of affirmation and anticipation. They reflect the clarity, enterprise and boldness of Yuxi's "second venture" — refusing to settle for the comfort zone of tobacco, proactively betting on the industries of the future, and planning a new pillar on the scale of a hundred billion yuan. They also demonstrate Yuxi's unique industrial advantages and integration capability — with Semcorp at its core, uniting multiple leaders and binding local endowments to industrial strength. If this cluster can be completed and reach production on schedule, Yuxi has the prospect of achieving a historic leap from being "dominated by a single crop" to "dual-engine drive," finding a powerful new engine for this "tobacco city." This ambition and effort are, in themselves, the most positive signal of Yuxi's industrial transformation.

Yuxi's hundred-billion-yuan new-energy battery cluster is a gamble bearing on the city's future, and an exploration full of hope. Its success or failure bears not only on whether Yuxi can successfully carry out its "second venture" but also provides, for China's many cities dependent on a single industry, an observation case of "how to cultivate a new pillar and achieve industrial transformation." And supporting this new-energy industrial cluster, beyond the leading enterprises and the value-chain layout, is an indispensable foundation — Yunnan's green electricity, and Yuxi's overall effort to advance green manufacturing. Green is becoming an important thread of Yuxi's industrial transformation.

19. Green Manufacturing: Yuxi's Green-Electricity Opportunity

Within the main thread of Yuxi's "second venture," beyond new-energy batteries, there runs another thread throughout — green. As a member of Yunnan, a major green-electricity province, Yuxi can likewise enjoy the dividend of green electricity, making "green" an important direction for industrial transformation and upgrading. Green manufacturing is both the base tone of Yuxi's emerging industries and a lever for the transformation of its traditional industries; it is an important dimension for understanding Yuxi's industrial future.

Yuxi's green confidence comes from Yunnan's green electricity. Yunnan is a major hydropower province, with clean energy accounting for around 86.3% of power generation, making it one of the regions with the most abundant and cleanest green electricity in the country. As a member of Yunnan, Yuxi can conveniently obtain Yunnan's green electricity. This green-electricity endowment carries great significance for Yuxi's industrial transformation — it can provide low-cost, low-carbon energy support for emerging industries such as new-energy batteries, and it can provide the conditions for the green transformation of traditional high-energy-consuming industries such as steel and non-ferrous metals. Green electricity is the most central resource advantage in Yuxi's push for green manufacturing.

Green electricity's support for Yuxi's new-energy battery industry is direct and crucial. The production of new-energy battery materials — whether separators, cathodes or anodes — is a high-energy-consuming process in which electricity costs account for a large share. Using Yunnan's green electricity to produce lithium-battery materials, Yuxi can both lower costs and sharply reduce carbon emissions, giving its products an inherent "green and low-carbon" quality. In today's world, which increasingly values low-carbon supply chains and product carbon footprints, "using green electricity to make battery materials" is an increasingly valuable card. Part of the reason enterprises such as Semcorp are willing to lay out large-scale capacity in Yuxi is Yunnan's green-electricity advantage. Green electricity is an important source of the competitiveness of Yuxi's new-energy battery industry.

Green electricity's significance for the transformation of Yuxi's traditional industries likewise cannot be ignored. Yuxi has traditional heavy industries such as steel and non-ferrous metals that are high in energy consumption and emissions, and they face enormous pressure to reduce emissions under the "dual-carbon" goals. Yunnan's green electricity provides the conditions for the green transformation of these traditional industries — by using more green electricity, raising the share of electric-furnace steel and advancing green metallurgy, Yuxi's steel and non-ferrous metals industries can significantly reduce carbon emissions, transforming "high-carbon heavy industry" into "relatively low-carbon green manufacturing." Green steel and green non-ferrous metals are important future directions for Yuxi's traditional mining and metallurgy industries. Using green electricity to "cut carbon and add green" for traditional industries is the core logic of Yuxi's green industrial transformation, and it is of a piece with Yunnan's thinking on green aluminium and green silicon.

Green manufacturing also complements Yuxi's ecological advantages. Yuxi is home to a clear plateau lake such as Fuxian Lake, an important ecological barrier and water-source conservation area in Yunnan. A fine ecological environment is Yuxi's precious asset, and it also sets higher green requirements for industrial development. Developing green manufacturing — a modern industry that is low in pollution, low in carbon emissions and based on recycling — is both a necessity for Yuxi to protect its ecology and safeguard the lucid waters and lush mountains of Fuxian Lake and others, and a path for Yuxi to convert its ecological advantages into development advantages. "Lucid waters and lush mountains are invaluable assets": Yuxi's development of green manufacturing is precisely about taking a high-quality, sustainable path of industrial development on the premise of protecting the ecology. The coordination of ecology and industry is an important connotation of Yuxi's green manufacturing.

Viewed on a larger scale, green manufacturing is the key to Yuxi's alignment with global industrial trends and to winning future competition. In an era where "dual-carbon" is becoming a global consensus and green and low-carbon has become a new track of industrial competition, "green" is shifting from an environmental concept into a tangible industrial competitiveness. Green products made with green electricity can meet international markets' demands for low-carbon supply chains and gain green premiums and market-access advantages. By leveraging Yunnan's green-electricity advantage and vigorously developing green manufacturing, Yuxi is winning its industries a competitiveness oriented toward the future and toward the world. This is a direction of great strategic significance for Yuxi's industrial transformation.

Green is becoming a distinct thread of Yuxi's industrial transformation — it is the base tone of the new-energy battery industry, a lever for the transformation of the traditional mining and metallurgy industries, a path for the coordinated development of Yuxi's ecology and industry, and the key to Yuxi's alignment with global trends and winning of the future. By making good use of the endowment of green electricity and getting the path of green manufacturing to work, Yuxi can gain a unique and lasting competitive advantage in its "second venture." And beyond green manufacturing, there is another new frontier being opened up within the map of Yuxi's "second venture" — the digital economy. This is yet another new track that Yuxi is laying out for the future.

20. The Digital Economy: Yet Another New Track for Yuxi

Beyond new-energy batteries and green manufacturing, the map of Yuxi's "second venture" also lays out another future-oriented new track — the digital economy. Although for Yuxi the digital economy remains a relatively emerging and small-scale field for now, it represents Yuxi's efforts toward industrial diversification and embracing the new economy, and is yet another exploration by this "tobacco city" in search of new drivers.

Yuxi's development of the digital economy accords with the great trend of the digital age. In today's world, the digital economy has become an important engine of economic growth and a new commanding height of industrial competition. Data has become a new factor of production, and digital technology is profoundly transforming all industries. For a city such as Yuxi that hopes to break free from dependence on a single industry and cultivate new drivers, the digital economy is a new direction not to be missed. Laying out the digital economy is both an accord with the trend of the times and an inevitable choice for Yuxi's industrial diversification and the building of a modern industrial system.

Yuxi's more realistic and more promising point of focus in the digital economy lies in the integration of "digital + real economy." Compared with building a vast digital industry from scratch, using digital technology to empower Yuxi's existing real-economy industries may be a more grounded and more effective path. For example: using the industrial internet and smart manufacturing to empower Yuxi's manufacturing sectors such as tobacco, steel and new-energy batteries, raising production efficiency and levels of intelligence; using digital technology to empower Yuxi's plateau-characteristic agriculture (such as Tonghai vegetables, Huaning citrus and Chu oranges), developing smart agriculture, agricultural-product e-commerce and livestream sales to expand the sales channels for agricultural products; and using digital technology to empower Yuxi's tourism (Fuxian Lake and others), developing digital culture and tourism. The value of the digital economy lies not only in how large it is as an industry in its own right, but even more in its ability to "empower" Yuxi's traditional industries, raising the efficiency and competitiveness of the entire economy.

The combination of the digital economy and Yuxi's new-energy battery industry holds especially rich room for imagination. The manufacture of new-energy batteries is a typical case of high-precision, highly automated modern manufacturing, which naturally requires the support of digital and intelligent technologies. While developing new-energy batteries, Yuxi can simultaneously advance the digitalisation and intelligence of battery manufacturing, using digital technology to raise the competitiveness of the battery industry. At the same time, around new-energy batteries, it can develop digital applications such as battery management systems, energy-storage digitalisation and the energy internet. The integration of the digital economy and new-energy batteries can allow Yuxi's two emerging industrial directions to reinforce and develop in concert with each other.

Of course, it must be objectively recognised that the digital economy remains for Yuxi a "track of potential" rather than a "mature pillar." As a southwestern prefecture-level city, Yuxi still lags noticeably behind developed regions in digital infrastructure, digital talent and the digital-industry ecosystem. Developing the digital economy requires sustained investment and catch-up in network infrastructure, data centres, the cultivation of digital talent and the nurturing of digital industries. How far Yuxi's digital economy can go remains to be seen, and its scale and influence will be hard to place on a par with tobacco and new-energy batteries in the short term. For Yuxi, the digital economy is more a long-term layout and exploration than a pillar that can bear fruit in the short term.

Even so, Yuxi's direction of laying out the digital economy remains worthy of affirmation. It reflects Yuxi's open posture and long-term vision in pursuing industrial diversification and embracing the new economy. In the course of its "second venture," Yuxi is not content with new-energy batteries alone but is laying out multiple directions and exerting force at multiple points, striving to build a modern industrial system with diversified support. This thinking of "diversified layout, oriented toward the future" is the correct direction for Yuxi to solve the problem of being "dominated by a single crop" and achieve sustainable development. The digital economy, though for now only a small part of Yuxi's industrial map, represents this city's exploration and enterprise in facing the digital age.

From new-energy batteries to green manufacturing to the digital economy, the layout of Yuxi's "second venture" emerging industries is beginning to take shape. These emerging industries are where Yuxi's hope lies as it faces the future and searches for a second growth curve. But Yuxi's industrial map holds more than industry and the new economy — it also has a field with exceptional endowments and distinctive character: characteristic agriculture built on plateau ecology and climate advantages. From Tonghai's vegetables to Huaning's citrus to the nationally renowned Chu oranges, Yuxi's plateau-characteristic agriculture is likewise a brilliant industrial calling card for this city.

21. Tonghai Vegetables: A Single County's Market Garden

Within Yuxi's plateau-characteristic agriculture, Tonghai vegetables are a well-known signature. Tonghai County, a small county under Yuxi's jurisdiction, has drawn on exceptional natural conditions and a mature industrial organization to turn vegetable cultivation into a major industry that reaches across the country and even exports overseas. Tonghai vegetables are a model of how Yuxi's plateau-characteristic agriculture "industrializes a climatic advantage," and a bright spot in the region's agricultural processing and export-oriented farming.

Tonghai's advantage in vegetable growing begins with its natural endowment. Situated in central Yunnan, Tonghai enjoys a mild climate, abundant sunshine and fertile soil; combined with the irrigation provided by water systems such as Qilu Lake, these conditions are highly suited to vegetable cultivation. Here, vegetables can be grown and harvested all year round, with good quality and a wide variety. These favorable natural conditions are the foundation of Tonghai's vegetable industry. Sitting on such land well suited to growing vegetables, Tonghai has developed vegetable cultivation into a local pillar industry, becoming a market garden in the truest sense.

The scale and outward orientation of Tonghai's vegetable industry are striking. According to available data, Tonghai's vegetable output reaches roughly 915,000 tonnes; moreover, its vegetables are not only supplied to local and domestic markets but are also exported overseas in large quantities—Tonghai's vegetable exports account for more than a third of all of Yunnan Province's agricultural exports. That a single small county's vegetable exports should make up over thirty percent of the entire province's agricultural exports is a remarkable figure. It shows that Tonghai vegetables are not merely "grown in quantity" but also "sold far afield"—they have become deeply integrated into international markets and constitute an export-oriented agricultural industry. This "buy nationwide, sell worldwide" export-oriented vegetable industry is the most distinctive feature of Tonghai's agriculture.

The success of Tonghai's vegetables rests above all on industrial organization and market development. Vegetable growing itself has a low barrier to entry, but building it into a major industry that reaches nationwide and exports overseas requires a full set of mature industrial arrangements—standardized cultivation, specialized grading and packaging, efficient cold-chain logistics, and unobstructed domestic and international sales channels. Over many years of development, Tonghai has formed a complete vegetable industrial chain running from cultivation, processing and cold chain through to sales and export, and has built up a mature market organization and logistics system. It is precisely this industrial-organization capability that enables Tonghai's vegetables to "travel far and sell well," upgrading ordinary vegetable growing into an efficiently functioning modern agricultural industry. This follows exactly the same logic by which Kunming's Dounan flower market turned cut flowers into a major industry.

The value of Tonghai's vegetables also lies in the fact that it is an industry that "enriches the people." Vegetable cultivation is labor-intensive; it can absorb large numbers of rural workers and provide broad ranks of farming households with a stable source of income. The development of Tonghai's vegetable industry has driven local farmers to increase their incomes and prosper, making it a genuine "people-enriching industry." Compared with an industry like tobacco, which is dominated by large enterprises, vegetable cultivation benefits the broad mass of ordinary farming households more directly, and carries significant meaning for promoting rural development, narrowing the urban-rural gap, and achieving common prosperity. Tonghai vegetables are a vivid embodiment of the "people-enriching" value of Yuxi's plateau-characteristic agriculture.

From the standpoint of industrial upgrading, Tonghai vegetables are also climbing toward a higher value chain. Beyond growing and selling fresh vegetables, Tonghai is also developing intensive vegetable processing—dehydrated vegetables, pre-cut clean vegetables, vegetable products and the like—to raise added value and shelf life and to expand the reach and radius of sales. At the same time, Tonghai is advancing the branding, greening and digitalization of its vegetable industry—building the "Tonghai Vegetables" regional brand, developing green and organic produce, and using e-commerce and livestreaming to broaden sales channels. All of these efforts serve to upgrade Tonghai vegetables from "selling primary produce" toward "selling processed goods and selling brands," raising the industry's added value and competitiveness. This is entirely consistent with the logic of Yuxi's industrial upgrading as a whole.

Tonghai vegetables are a microcosm and a model of Yuxi's plateau-characteristic agriculture. They demonstrate how Yuxi, through industrial organization and market-based operation, converts its distinctive plateau climate and ecological advantages into a modern agricultural industry that reaches across the country and exports overseas. This capacity to "industrialize a climatic advantage" is the core competitiveness of Yuxi's plateau-characteristic agriculture. From Tonghai's vegetables to Huaning's citrus, the characteristic agricultural produce of the Fuxian Lake basin, and the nationally renowned Chu Orange, Yuxi's plateau-characteristic agriculture forms a second realm of abundance beyond the city's industry. And within this realm there is another distinctive production area closely bound to Fuxian Lake, that jewel of the plateau—namely Huaning's citrus and the agriculture of the Fuxian Lake basin.

22. Huaning Citrus and the Fuxian Lake Basin

Within the map of Yuxi's plateau-characteristic agriculture, Huaning's citrus and the characteristic agriculture of the Fuxian Lake basin form another realm of abundance. If Tonghai vegetables represent the strength of Yuxi's export-oriented agriculture, then Huaning citrus and the agriculture of the Fuxian Lake basin show how Yuxi draws on its excellent ecology and climate to develop distinctive fresh fruit and green agriculture. This realm is yet another signature of Yuxi's plateau-characteristic agriculture.

Huaning is a well-known home of citrus in Yuxi. With its warm climate and abundant sunshine, it is highly suited to citrus cultivation; the citrus it produces is of excellent quality, comes to market early, and tastes good, enjoying a solid market reputation. As a regional characteristic fresh-fruit industry, Huaning citrus brings considerable income to local farmers and has become a representative of Yuxi's plateau-characteristic agriculture. Around citrus, Huaning has formed an industrial chain running from cultivation, grading and packaging through to sales, and is actively pursuing branding and greening in an effort to make "Huaning Citrus" an influential regional fresh-fruit brand. A small piece of citrus fruit sustains a whole strand of Huaning's characteristic agriculture.

Fuxian Lake is Yuxi's most precious ecological asset, and it profoundly shapes the agriculture around it. Fuxian Lake is one of China's largest deep-water freshwater lakes; its waters are crystal clear and of excellent quality, making it an important source of high-grade freshwater and an ecological barrier for Yunnan and indeed for the whole country. The Fuxian Lake basin (encompassing Chengjiang and other areas) has a mild climate and excellent ecology, well suited to developing green, high-quality characteristic agriculture. At the same time, however, protecting the lake's clear waters places strict ecological demands on agricultural development in the basin—agriculture must not be developed at the cost of polluting the lake. This requires the Fuxian Lake basin to follow a path of characteristic agriculture that puts "ecology first and green development."

The development of agriculture in the Fuxian Lake basin embodies the dialectic of "protection and development." On the one hand, the fine ecology and climate are valuable conditions for developing green, high-quality, high-end characteristic agriculture—the Fuxian Lake basin can develop green vegetables, quality fruit, ecological agriculture, and leisure agriculture that integrates farming with tourism. On the other hand, protecting the lake's water quality and ecology requires that agriculture in the basin be green and ecological, reducing the use of chemical fertilizers and pesticides and controlling non-point-source pollution. In recent years, Yuxi has vigorously advanced ecological protection and green transformation in the Fuxian Lake basin, adjusting its agricultural structure and developing eco-friendly characteristic agriculture, striving to achieve a win-win between "protecting the lake's clear waters" and "developing characteristic agriculture." This is a vivid practice of Yuxi's commitment to the idea that "lucid waters and lush mountains are invaluable assets."

Huaning citrus and the agriculture of the Fuxian Lake basin together demonstrate an important feature of Yuxi's plateau-characteristic agriculture—drawing on excellent ecology and climate to develop green, high-quality, distinctive agricultural produce. Located in central Yunnan, Yuxi has a diverse climate and fine ecology: it has flatland areas suited to growing vegetables (Tonghai), warm river valleys suited to growing citrus and other fresh fruit (Huaning), and lake basins with fine ecology suited to developing green, high-end agriculture (Fuxian Lake). This diversity of climatic and ecological conditions enables Yuxi to develop a rich variety of plateau-characteristic produce, forming a pattern of plateau-characteristic agriculture in which "each county has its own product, each with its own character." This is Yuxi's distinctive agricultural endowment.

From an industrial perspective, the value of Yuxi's plateau-characteristic agriculture lies not only in the agricultural produce itself but, more importantly, in the potential it holds for "agricultural processing" and "agriculture-tourism integration." Citrus can be processed into juice, preserved fruit and other products; the Fuxian Lake basin can develop leisure agriculture and eco-tourism that integrate farming with tourism. Combining characteristic agriculture with processing, tourism and culture can substantially raise the added value and overall returns of agriculture. In developing plateau-characteristic agriculture, Yuxi's aim is precisely, on the foundation of growing and selling produce well, to extend toward higher-value directions such as intensive processing, brand operation and agriculture-tourism integration, converting its agricultural endowment into greater industrial value. This is consistent with the logic of Yuxi's industrial upgrading as a whole.

Huaning citrus and the agriculture of the Fuxian Lake basin, together with the Tonghai vegetables discussed earlier, jointly compose the abundant tableau of Yuxi's plateau-characteristic agriculture. Drawing on Yuxi's distinctive climate and ecology, they have developed a rich variety of distinctive produce that both enriches farmers and beautifies the countryside, forming a realm full of vitality beyond the city's industry. And within Yuxi's plateau-characteristic agriculture, there is one brand that is the most legendary and the most widely known of all—it came from the hands of an old man whose fortunes rose and fell dramatically, who used a single sweet orange to write a story of resilience and rebirth. That brand is the Chu Orange.

23. Chu Orange: Resilience Within a Single Sweet Orange

Among the many brands of Yuxi's plateau-characteristic agriculture, the Chu Orange is the most legendary and the most widely known. It came from the hands of Chu Shijian, the "Tobacco King"—the man who lifted the Yuxi Cigarette Factory to its peak and then fell to the depths after being convicted of an economic crime. In his later years, following his release on medical parole, Chu Shijian embarked on a second venture in old age, growing rock-sugar oranges in the Ailao Mountains and creating the legendary "Chu Orange" brand. The story of this sweet orange is a distinctive signature of Yuxi's characteristic agriculture, and it carries the complex flavors of resilience, rebirth, and entrepreneurship.

First, the sequence of events should be set out clearly. As noted earlier, Chu Shijian was lawfully sentenced to life imprisonment in 1999 for embezzlement and for holding a large amount of property from unidentified sources; his sentence was commuted in 2001, and in 2002 he was granted release on medical parole for reasons including his health. After his release on medical parole, Chu Shijian, then in his seventies, chose not to spend his later years in ease but instead contracted barren hills in Xinping County, Yunnan, and began growing rock-sugar oranges. Starting around 2002, this man of about seventy-four, together with his family, learned orange cultivation from scratch—studying the soil, improving varieties, mastering growing techniques, and rigorously managing quality. After nearly a decade of arduous cultivation, the rock-sugar oranges he grew rose to fame for their excellent quality, moderate sweetness and outstanding taste, and were affectionately known in the market as "Chu Oranges."

The rise of the Chu Orange owed as much to the fruit's own solid quality as to the inspirational story it carried. An old man who had once commanded the heights and then fallen to the depths of his life set out anew in his seventies and, by his own hands and wits, grew premium sweet oranges from barren hills and created a successful agricultural brand—this story of "getting back up after falling" moved countless people. The Chu Orange was thus given the label of an "inspirational orange" and became a phenomenon-level agricultural brand. Its success let people see a valuable quality—that no matter what setbacks and low points one encounters, with an indomitable will and down-to-earth effort one can create value anew. This spirit of resilience and rebirth is the core of what makes the Chu Orange story so moving.

Of course, viewing the Chu Orange and this chapter of Chu Shijian's later life calls for objectivity and balance. On the one hand, Chu Shijian was severely punished by law for an economic crime—this is a legal responsibility he had to bear, one that must not be evaded or whitewashed; the inspirational quality of the Chu Orange must never become a reason to play down or launder his violations of the law. On the other hand, that a person, after serving his sentence (on medical parole), should in old age start over, support himself and create value—this effort at reform and a fresh start is itself worthy of affirmation; legal punishment and an individual's repentance and self-renewal are not contradictory. The Chu Orange story should be regarded with a mature, objective and balanced attitude: appreciating the value of the resilient striving it contains, while not forgetting the legal lessons behind it.

From an industrial standpoint, the success of the Chu Orange offers a highly valuable case study for the branding of characteristic agriculture in Yuxi and in Yunnan as a whole. The Chu Orange proves that an agricultural product, if it can be brought to the pinnacle of quality and endowed with a moving brand story and cultural meaning, can substantially raise its added value and market influence to become a high-value brand. This holds important implications for the branding of Yuxi's many plateau-characteristic products (Tonghai vegetables, Huaning citrus and others)—competition among agricultural products is not merely a competition of quality but, still more, a competition of brand and story. Endowing premium produce with distinctive brand meaning is a key path to raising agricultural added value.

The Chu Orange also demonstrates the importance of "refined, standardized" cultivation to agricultural brands. In growing oranges, Chu Shijian applied to agriculture the scientific management concepts he had accumulated in running enterprises—refined cultivation management, strict quality control, and standardized grading and packaging. It was precisely this approach of "farming with an industrial mindset" that ensured the Chu Orange's stable and excellent quality, laying the foundation for the brand's success. This suggests a lesson for Yuxi's characteristic agriculture: to build high-value agricultural brands, it must move beyond extensive traditional farming models and take the road of refined, standardized, science-based modern agriculture. Using modern management and technology to upgrade agriculture is the direction for upgrading Yuxi's characteristic agriculture.

A single small Chu Orange carries a great deal—the sweetness of the fruit itself, the warmth of an inspirational story, the caution of a legal lesson, and, still more, the way of agricultural branding. It is the most distinctive signature of Yuxi's plateau-characteristic agriculture, and a vivid teaching case about resilience, rebirth, and how to turn an agricultural product into a brand. The story of the Chu Orange tells us that, whether a person or a city, after a fall one can rise again and create new value—and this, perhaps, resonates at some deep level with Yuxi's spirit of a "second venture," its striving to transcend the "single cigarette." Ultimately, the value of Yuxi's plateau-characteristic agriculture must be converted into greater industrial returns through processing and branding. This is the road that Yuxi's green food industry must take.

24. Green Food Processing: From Field to Brand

The value of Yuxi's plateau-characteristic agriculture can only be fully realized through processing and branding. Well-grown produce, if sold only in primary form, has limited added value; only by upgrading "agricultural produce" into "food" and "primary goods" into "branded goods" through intensive processing and brand operation can its value be substantially raised. Green food processing is the key link in Yuxi's plateau-characteristic agriculture climbing in value "from field to brand," and an important direction for the diversification of Yuxi's industry.

Yuxi has a solid agricultural foundation for developing green food processing. Tonghai's vegetables, Huaning's citrus, the green produce of the Fuxian Lake basin, Xinping's Chu Oranges, and grain, oil, livestock, poultry and aquatic products from across the region provide Yuxi's food processing with a rich and varied supply of raw materials. Sitting on such abundant agricultural resources, Yuxi is ideally placed to develop food processing. Around these products, Yuxi can develop a series of food industries—vegetable processing (dehydrated vegetables, pre-cut clean vegetables, vegetable products), fruit processing (juice, preserved fruit, canned goods), grain and oil processing, and livestock, poultry and aquatic processing—extending the value of agricultural produce downstream.

The core value of green food processing lies in "raising added value" and "extending the industrial chain." A fresh vegetable or piece of fruit has a short shelf life, low added value and a limited sales radius; but once processed into dehydrated vegetables, juice, preserved fruit and the like, its shelf life can be greatly extended, its sales radius widened, and its added value raised. At the same time, food processing can drive a series of supporting industries such as packaging, logistics and sales, extending the industrial chain and creating more jobs. Green food processing is the key path for converting Yuxi's resource advantage as a "major agricultural city" into an industrial advantage in the "food industry." It allows Yuxi's produce to move beyond "selling raw materials" to "selling food and selling brands," multiplying its value.

Brand is the soul of Yuxi's green food industry. The Chu Orange discussed earlier is a classic case of agricultural branding—it proves that endowing premium produce with moving brand meaning can substantially raise its value. Yuxi's green food industry must take exactly this road of branding: building a batch of regional public brands and enterprise brands such as "Tonghai Vegetables," "Huaning Citrus" and "Fuxian Lake," using brands to raise the recognition, reputation and premium capacity of Yuxi's green food. In an age when consumers pay ever more attention to food quality, safety and health, branded agricultural products that are "green, high-quality and story-rich" enjoy broad market space. Drawing on its fine ecology and abundant produce, Yuxi is fully capable of building a batch of well-known green food brands.

Green food processing also aligns closely with Yuxi's ecological advantage and its "green" main thread. Yuxi possesses excellent ecological environments such as Fuxian Lake, and the produce it yields naturally carries the attributes of "green, ecological and healthy." By developing green food processing and conveying these "green and ecological" attributes to consumers through processing and branding, Yuxi can form a distinctive market competitiveness. "Made in Yuxi, green and healthy" can become a golden signboard for the region's green food. At the same time, green food processing is a low-pollution, high-value-added industry, consistent with Yuxi's requirement to protect ecosystems such as Fuxian Lake and to pursue a path of green development. Green food processing is an ideal field in which Yuxi's "ecological advantage" and "industrial development" come together.

From the standpoint of industrial diversification, green food processing also holds important significance for Yuxi's "second venture." It is yet another direction for the diversification of Yuxi's industry beyond tobacco and new-energy batteries. Based on Yuxi's abundant agricultural resources, green food processing has stable market demand, strong employment effects and broad benefits for farming households—an industry that is "grounded, sustainable and people-enriching." Developing green food processing can both optimize Yuxi's industrial structure and lessen its dependence on tobacco, while driving greater agricultural returns, higher farmer incomes and rural revitalization—achieving multiple goals at once. This is highly consistent with Yuxi's aim of building a diversified industrial system and achieving high-quality development.

Green food processing is the key to converting the resource advantage of "plateau-characteristic agriculture" into the industrial advantage of the "food industry" in Yuxi. It moves Yuxi's produce from field to brand, from primary to intensive, and from low value to high value—the path Yuxi's plateau-characteristic agriculture must take to realize its value, and an important direction for the diversification of Yuxi's industry. From Tonghai vegetables and Huaning citrus to the Chu Orange and green food processing, Yuxi's plateau-characteristic agriculture forms a realm of abundance and potential beyond the city's industry. And this realm, together with Yuxi's tobacco, mining-and-metallurgy, new-energy battery and other industries, all require a spatial carrier—namely Yuxi's industrial parks. The industrial-park map is the spatial skeleton of Yuxi's industrial layout.

25. The Industrial-Park Map: The Spatial Skeleton of Yuxi's Industry

The grounding of an industry cannot do without a spatial carrier. Yuxi's tobacco, mining-and-metallurgy, new-energy battery, green food and other industries all require industrial parks as platforms for clustering and development. Yuxi's industrial-park map is the spatial skeleton of its industrial layout, and an important window for observing the clustering and transformation of Yuxi's industries. To understand Yuxi's industrial parks is to understand the spatial logic of the city's industrial development.

The core of Yuxi's industrial parks is the Yuxi High-tech Development Zone. As the principal platform for Yuxi's industrial development, the High-tech Development Zone gathers the city's most important industrial projects and enterprises. In particular, Yuxi's flagship project for its "second venture"—the new-energy battery industry—is to a large extent laid out within the High-tech Development Zone and related industrial parks. Enjie's separator and solid-state battery projects, as well as the hundred-billion-yuan new-energy battery cluster now being planned, all require a high-caliber platform such as the High-tech Development Zone to carry them. The Yuxi High-tech Development Zone is the core carrier for Yuxi to cultivate emerging industries and advance industrial upgrading, and the main battlefield of the city's "second venture."

Beyond the High-tech Development Zone, Yuxi has also laid out a batch of industrial parks and industrial bases each with its own character. Some of these parks carry tobacco and supporting industries, some carry mining-and-metallurgy industries such as steel and non-ferrous metals, some carry emerging industries such as new-energy batteries, and some carry characteristic industries such as green food processing. According to differences in location, resources and positioning, different parks carry different industries, forming a park pattern of "distinct emphases and coordinated development." This specialized division of labor among parks is conducive to industrial clustering and cluster-based development, and to raising the carrying capacity and output efficiency of the parks. Yuxi's industrial-park map is the spatial skeleton of its industrial layout.

The park economy holds important significance for Yuxi's industrial transformation. First, parks are platforms for industrial clustering. By concentrating related industries and enterprises within a park, agglomeration effects can be formed, supporting costs lowered, coordination efficiency raised, and the formation of industrial clusters promoted. In building a hundred-billion-yuan new-energy battery cluster, Yuxi's very aim is to draw on park platforms to gather enterprises such as Enjie, Yuntianhua, EVE Energy and Huayou and to form coordination along the industrial chain. Second, parks are carriers for undertaking industries and attracting investment. Only with high-caliber park platforms can Yuxi better undertake industrial transfers and attract leading enterprises to settle. Parks are the key lever for Yuxi to advance industrial clustering and cluster-based development.

The development of Yuxi's parks also faces the challenge of "raising quality and efficiency." Compared with the advanced parks of developed regions, Yuxi's parks still have room for improvement in industrial caliber, innovation density, output per mu, and supporting services. In particular, in cultivating emerging industrial clusters such as new-energy batteries, parks must provide more complete industrial support, more specialized services and a stronger atmosphere of innovation in order to truly retain and strengthen leading enterprises and industrial chains. How to upgrade a park from a "physical aggregation of enterprises" into an "industrial ecosystem of innovation and coordination," and from "competing on land and concessions" to "competing on services and ecosystem," is the key next step for Yuxi's park economy. High-quality parks are an important guarantee of whether Yuxi's industrial clusters can take shape and grow strong.

The greening of parks is also an important direction for the development of Yuxi's parks. Yuxi possesses excellent ecological environments such as Fuxian Lake, which set high green requirements for industrial development. Yuxi's industrial parks, especially those carrying high-energy-consumption industries such as steel and non-ferrous metals, must strictly attend to ecological and environmental protection and take the road of greening and circular development—using green power to reduce carbon emissions, developing a circular economy, and strictly controlling pollutant discharge. At the same time, parks for emerging industries such as new-energy batteries are themselves carriers of green manufacturing, and can be built into green factories and zero-carbon parks. Combining park development with green and ecological aims is the path Yuxi's park economy must take toward sustainable development, and is consistent with Yuxi's overall orientation of protecting the environment and pursuing green development.

Yuxi's industrial-park map is the spatial skeleton of the city's industrial layout, and an important platform for its industrial clustering, transformation and upgrading. With the High-tech Development Zone at its core, plus a batch of industrial parks each with its own character, Yuxi has built a spatial system carrying diverse industries such as tobacco, mining-and-metallurgy, new-energy batteries and green food. Strengthening, upgrading and greening its parks is key to Yuxi's efforts to advance industrial clustering, cluster-based development and greening. And above the skeleton of industries and parks, Yuxi has another distinctive layer of civic character—its history, culture and ecology, which lend this industrial city a character and depth all its own. This underlying character is likewise a wealth of Yuxi that cannot be overlooked.

26. Nie Er's Hometown and the City's Underlying Character

A city's competitiveness lies not only in its industry and GDP, but also in the distinctive "civic character" formed by its history, culture and ecology. Yuxi, an industrial city shaped by tobacco and mining-and-metallurgy, in fact also possesses a deep and distinctive civic character—it is the hometown of the people's musician Nie Er, home to the Chengjiang Fossil Site, a World Natural Heritage property, and home to Fuxian Lake, that jewel of the plateau. This underlying character lends Yuxi a distinctive quality and depth, and is a precious source of soft power.

Yuxi's most resounding cultural signature is Nie Er. Nie Er, composer of the "March of the Volunteers," the national anthem of the People's Republic of China, was an outstanding people's musician of modern China. Nie Er's ancestral home is Yuxi; although he was born in Kunming, Yuxi, as his ancestral home and spiritual hometown, takes deep pride in claiming such a great musician. "Nie Er's hometown" is a weighty cultural signature for Yuxi, and an important spiritual symbol and source of cultural identity for the city. Around Nie Er, Yuxi has built the Nie Er cultural brand and constructed related memorial and cultural facilities, carrying forward this precious cultural heritage. A musician and a national anthem add profound cultural depth and spiritual elevation to the industrial city of Yuxi.

Yuxi's other world-class signature is the Chengjiang Fossil Site. Located in Chengjiang, Yuxi, this fossil site records precious evidence of the Cambrian explosion of life about 520 million years ago; it is a "natural museum" for studying the evolution of early life on Earth and holds extremely high scientific value. In 2012, the Chengjiang Fossil Site was inscribed on the World Heritage List, becoming China's first, and Asia's only, fossil-type World Natural Heritage property. This World Heritage property gives Yuxi a unique scientific and natural coordinate on the world map. The Chengjiang Fossil Site is not only Yuxi's pride but a natural heritage shared by all humanity, adding to the industrial city of Yuxi a weighty natural depth reaching back to antiquity.

Fuxian Lake, in turn, is Yuxi's most precious ecological jewel. As one of China's largest deep-water freshwater lakes, Fuxian Lake has clear waters of excellent quality, making it a valuable source of high-grade freshwater and an important ecological barrier for Yunnan and indeed the whole country. This lake of clear water is Yuxi's most precious ecological asset, and the brightest stroke in the city's ecological character. Protecting Fuxian Lake and safeguarding its clear waters is Yuxi's bounden duty and the foundation of its sustainable development. In recent years, Yuxi has placed the protection of Fuxian Lake in a prominent position, advancing ecological governance and green transformation across the basin and striving to achieve a win-win between "protecting the lake's clear waters" and "regional development." Fuxian Lake is a symbol of Yuxi's "lucid waters and lush mountains," and a concentrated expression of its philosophy of green development.

Nie Er's music, Chengjiang's fossils, Fuxian Lake's clear waters—history, culture, nature and ecology together compose Yuxi's distinctive and rich civic character. This underlying character means that Yuxi is not merely a cold "tobacco city" or "industrial city," but a city with history, culture, ecology and warmth. It tells us that Yuxi's value and appeal extend far beyond its tobacco and GDP, residing also in its profound humanistic heritage and fine ecological environment. This civic character is a precious source of soft power and an intangible asset for Yuxi.

Civic character also provides deep support for Yuxi's industrial development. A fine ecological environment (Fuxian Lake and others) is a valuable condition for Yuxi to develop green manufacturing, plateau-characteristic agriculture and eco-tourism; a weighty cultural heritage (Nie Er culture and others) and a distinctive natural heritage (the Chengjiang Fossil Site) are important resources for Yuxi to develop cultural tourism, raise its urban standing and attract talent. In an age when being "livable and workable" grows ever more important, a city's fine ecology and deep culture are themselves an important competitiveness for attracting talent, enterprises and visitors. By making good use of this civic character, Yuxi can inject a distinctive and enduring soft power into its industrial development and urban competitiveness.

A city's modernization should not come at the cost of sacrificing its history, culture and ecology. While advancing industrialization and developing its industries, Yuxi safeguards the transmission of Nie Er culture, the heritage of the Chengjiang Fossil Site and the clear waters of Fuxian Lake, letting the "hard power" of industry and the "soft power" of culture and ecology enhance one another—a higher-order and more sustainable form of development. Yuxi's distinctive civic character is the quality that sets it apart from other industrial cities, and a precious asset for facing the future and achieving high-quality development. And beyond this civic character, Yuxi's development holds still more dimensions worth exploring in depth—from the historical echoes of ancient Dian bronze to the entrepreneurship running from Chu Shijian to Li Xiaoming, from the significance of industry to the livelihoods of ordinary citizens, to the county-level pattern of "one county, one industry," the balance between ecology and industry, and Yuxi's new-energy competition and cooperation as a twin city with Qujing. Together, these dimensions compose a more three-dimensional picture of Yuxi's industry.

27. Lijiashan in Jiangchuan: Echoes of Ancient Dian Bronze

Woven into Yuxi's civic character is another exceptionally weighty layer of history—the culture of the ancient Dian Kingdom. At Jiangchuan in Yuxi lies a celebrated ancient burial complex, the Lijiashan tombs, which have yielded a wealth of exquisite bronzeware from the ancient Dian Kingdom. The most renowned of these, the "Bull-and-Tiger Bronze Table" (牛虎铜案), stands as the pinnacle of ancient Dian bronze civilization. This bronze legacy, dating back more than two thousand years, infuses Yuxi—an industrial city—with a profound and distinctive historical depth.

The Lijiashan tomb complex, located in Jiangchuan, Yuxi, is a major relic of the ancient Dian culture. The ancient Dian Kingdom was a venerable state that flourished around Dianchi Lake and its surroundings from the pre-Qin period through the Han dynasty, and it created a splendid bronze civilization. The bronzes unearthed at Lijiashan—numerous, superbly crafted, and vividly modeled—offer a vivid portrait of the society, religion, and artistic achievement of the ancient Dian Kingdom, and constitute precious physical evidence for the study of Dian culture and of Chinese bronze civilization. The reemergence of these bronzes, dormant for over two millennia, has made Yuxi an important coordinate on the map of ancient Dian culture, and has extended the historical reach of this land back into remote antiquity.

The most famous of the Lijiashan bronzes is the "Bull-and-Tiger Bronze Table." This Warring States–period ritual bronze is extraordinarily original and lively in form: a large bull stands upright, bearing a table surface on its back, with a calf lying crosswise beneath its belly, while a fierce tiger clings to and bites at the bull's tail. Ingeniously conceived, blending stillness and motion, and full of vitality, the piece unites the bull's steadiness, the tiger's ferocity, and the maternal tenderness of a cow protecting her calf—a supreme masterpiece of ancient Dian bronze art. The "Bull-and-Tiger Bronze Table" is more than a relic; it is the crystallization of the wisdom and artistry of the ancient Dian people, and a vivid testament to the pluralistic yet unified character of Chinese bronze civilization. As a national-treasure-grade artifact unearthed in Yuxi, it is a cultural gem in which the city takes great pride.

The significance of ancient Dian bronze civilization lies further in what it reveals about this land's long-standing tradition of metalworking. Bronze is an alloy of copper and tin, and its casting represented the highest level of metalworking craftsmanship in antiquity. That the ancient Dian people could cast such exquisite bronzeware shows that, more than two thousand years ago, this land had already mastered advanced techniques of mining, smelting, and casting. In a sense, Yuxi's mining and metallurgy industries today (iron and steel, non-ferrous metals) share a continuous historical resonance with the bronze casting of the ancient Dian Kingdom two millennia ago, precisely on the theme of "metalworking." This land has an exceedingly long tradition of extracting and processing metals. That historical resonance adds a layer of cultural depth to Yuxi's mining and metallurgy industry.

The value of ancient Dian culture to Yuxi is multifaceted. It is a precious historical and cultural heritage and an important source of the city's cultural identity and pride; it is also an important resource for developing cultural tourism and elevating the city's standing—by drawing on the Lijiashan tombs and ancient Dian culture, Yuxi can develop cultural tourism and build cultural facilities, so that the allure of ancient Dian civilization attracts visitors, nourishes residents, and raises the city's profile. In an age when cultural soft power matters ever more, this unique historical heritage of ancient Dian culture is a distinctive quality and a precious asset that sets Yuxi apart from other industrial cities.

At a deeper level, ancient Dian bronze civilization also offers a spiritual lesson for Yuxi's modern industrial development. That the ancient Dian people could, more than two thousand years ago, draw on their wisdom and skill to create a bronze masterpiece like the "Bull-and-Tiger Bronze Table"—reaching the pinnacle of the metalworking craftsmanship of their time—embodies a spirit of striving for excellence and relentless refinement, precisely the quality modern manufacturing needs most. As Yuxi today develops new-energy batteries, green manufacturing, and other modern industries, it likewise needs this uncompromising pursuit of quality and craftsmanship. From the craftsmanship of ancient Dian bronze to the quality pursuit of modern manufacturing, what runs unbroken through both is a dedication to "making things well, making them fine, making them the very best." This spiritual inheritance, spanning two thousand years, is a deep cultural foundation for Yuxi's industry.

The ancient Dian bronzes of Lijiashan are a brilliant jewel in Yuxi's historical depth. They make Yuxi not merely a "tobacco city" or "industrial city" that rose in modern times, but also a historic city with a metalworking tradition stretching back more than two thousand years and bearing the splendor of ancient Dian civilization. This weighty historical depth—together with Nie Er culture, the Chengjiang fossil site, and the ecology of Fuxian Lake—jointly forms Yuxi's distinctive and rich civic character. And atop this foundation, Yuxi's most vital asset is, in fact, a precious quality embodied by generation after generation of Yuxi people—namely, the entrepreneurship that dares to venture, dares to act, and pursues excellence. From Chu Shijian to Li Xiaoming, Yuxi's entrepreneurship is the deepest code of the city's industrial legend.

28. Entrepreneurship: From Chu Shijian to Li Xiaoming

A city's industrial legend is, in the end, written by people. Behind the brilliance of Yuxi's industry lies the spirit of generation after generation of Yuxi entrepreneurs who dared to venture, dared to act, and pursued excellence. From Chu Shijian, who lifted the Yuxi Cigarette Factory to its peak, to the Li Xiaoming family, who built Semcorp into the world's leading battery-separator maker, Yuxi's entrepreneurship is the deepest code of the city's industrial legend—and the most precious soft power for its "second venture."

Consider first the entrepreneurship that Chu Shijian represents. Setting aside his later legal troubles, and judging purely by managerial talent, Chu Shijian embodied a precious entrepreneurial spirit—the courage to reform, the willingness to innovate, the drive for refinement, and the pursuit of excellence. Taking over a small factory on the brink of collapse, he had the courage to override opposition and introduce advanced equipment, to rigorously improve raw-material and product quality, and to build a powerful brand, ultimately making the Yuxi Cigarette Factory "number one in Asia." This pioneering spirit of "going from zero to one, turning the impossible into the possible," and this striving spirit of "refusing to be content with resources at hand, and insisting on taking them to the extreme," are the very essence of entrepreneurship. Of course, Chu Shijian's downfall also serves as a warning: entrepreneurship must be exercised on the track of the rule of law and under effective oversight if it is to endure and go far.

Consider next the entrepreneurship represented by the Li Xiaoming family. The rise of Yunnan Energy New Material (Semcorp) is likewise an epic of entrepreneurship. Starting from traditional packaging and printing, the Li Xiaoming family—drawing on its technical accumulation and strategic vision in polymer films—shrewdly entered the high-barrier, high-growth field of lithium-battery separators, seized the historic wave of global electrification, and step by step built Semcorp into the world's leading separator maker. This spirit of "keenly perceiving the trend, decisively entering a new field, and winning the competition through technology and focus" is a hallmark of entrepreneurship in the new era. Unlike Chu Shijian, who relied on resources and management, the Li Xiaoming family relied on technology and vision—representing an upgrade in Yuxi's entrepreneurship from the "resource-based" to the "innovation-based."

Chu Shijian and Li Xiaoming—two generations of Yuxi entrepreneurs—though of different eras, different industries, and different paths to success, share the same lineage on the point of "entrepreneurship." Both possessed the boldness to venture and act, the persistence to pursue excellence, and the wisdom to seize opportunity. Chu Shijian built a small cigarette factory into a tobacco empire; Li Xiaoming turned a thin film into a world champion—both proved that even in Yuxi, in the interior of the southwest, extraordinary entrepreneurship can create astonishing commercial success and even globally leading industries. This entrepreneurship is Yuxi's most precious intangible asset, and a distinctive fortune that sets it apart from other resource-based cities.

The significance of entrepreneurship to Yuxi's "second venture" is especially great. The "second venture" is, in essence, a new venture in itself—cultivating new pillar industries beyond tobacco, from a relatively weak base. What this process needs most is the entrepreneurship to venture and act, to innovate boldly, and to persevere. For Yuxi to succeed in its "second venture," it needs not only leading enterprises like Semcorp but, even more, the emergence of a large cohort of innovative entrepreneurs like Li Xiaoming, and the unleashing of society-wide vitality for entrepreneurship and innovation. Yuxi's tradition of entrepreneurship provides precious spiritual resources and a talent base for its "second venture."

Cultivating and unleashing entrepreneurship is a major task of Yuxi's "second venture." This requires Yuxi to foster a social atmosphere that respects entrepreneurs, encourages entrepreneurship and innovation, and tolerates failure; to optimize its business environment, providing fair, convenient, and reliable conditions for entrepreneurs to start and innovate; and to develop the private economy, offering a broad stage for entrepreneurship to flourish. The success of private enterprises such as Yukun Iron and Steel and Semcorp proves that Yuxi has the soil to nurture outstanding entrepreneurs and private enterprises. What Yuxi must do is cultivate this soil to be even more fertile, so that more "Li Xiaomings" emerge and entrepreneurship fully blossoms in this city. This is the key soft power that will determine whether Yuxi's "second venture" succeeds.

From Chu Shijian to Li Xiaoming, from tobacco empire to separator champion, Yuxi's entrepreneurship is the deepest code of the city's industrial legend. It tells us that a city's industrial competitiveness lies not only in what resources or industries it has, but even more in what kind of entrepreneurs it has, and what kind of spirit of entrepreneurship and innovation. Yuxi rose on its high-quality tobacco-leaf resources, and now plans its future on Semcorp, a world champion—and running through it all is precisely that entrepreneurship of daring to venture, daring to act, and pursuing excellence. To carry forward and unleash this spirit well is Yuxi's most precious asset for the future. And entrepreneurship must ultimately be embodied in real, tangible industries—for the purpose of giving the city's people a better life. This brings us to the significance of industry for the livelihood of Yuxi's people.

29. Employment and Livelihood: Enriching the People Beyond a Single Cigarette

In discussing Yuxi's industry, we must ultimately return to a fundamental question—what it means for the people of Yuxi. A city develops industry, in the final analysis, so that the people living there may enjoy a better life. Yuxi became the "per-capita champion" on the strength of a single cigarette, and this has indeed allowed its people to enjoy relatively comfortable lives; but from the fuller perspective of employment and livelihood, Yuxi's industrial transformation and diversification likewise carry a profound mission of enriching the people.

Consider first tobacco's contribution to the livelihood of Yuxi. As Yuxi's pillar industry, tobacco has made an enormous contribution to the city's prosperity. It has generated Yuxi's fiscal revenue, underwriting the city's public services, education, healthcare, and infrastructure, and giving Yuxi's residents relatively high-quality public services; it has driven employment—from farmers growing tobacco leaf, to workers in the cigarette factory, to those employed in supporting industries, the tobacco value chain has provided stable jobs and income for a great many Yuxi people; and it has raised Yuxi's per-capita income level, making Yuxi one of the strongest cities in Yunnan by per-capita economic strength. Tobacco's contribution to Yuxi's livelihood is real and undeniable.

But from the fuller perspective of livelihood, the "one dominant tobacco" structure has its limitations. Tobacco is a capital- and technology-intensive industry dominated by a large enterprise (Hongta Group); the number of jobs it creates is relatively limited, and they are concentrated mainly along the tobacco value chain. For the broad population of ordinary workers—especially the rural population—apart from tobacco cultivation, the direct employment opportunities tobacco can offer are not many. Therefore, if Yuxi is to spread prosperity to a broader population and create more jobs, it cannot rely on tobacco alone, but must develop more diversified industries with greater capacity to absorb employment. This is precisely an important livelihood-related motive for Yuxi's industrial diversification—to give more Yuxi people work to do and money to earn.

Emerging industries and specialty agriculture hold distinctive value in creating employment and enriching the people through higher incomes. The development of emerging industries such as new-energy batteries can create a large number of industrial jobs—especially as the hundred-billion-yuan cluster takes shape, driving substantial employment. Plateau specialty agriculture and green food processing, meanwhile, are quintessential "people-enriching industries"—Tonghai's vegetables, Huaning's citrus, and specialty farm produce across the region directly benefit vast numbers of ordinary farming households, providing them a stable source of income. Compared with tobacco, which is dominated by large enterprises, specialty agriculture benefits ordinary workers more directly and more broadly, and holds important significance for promoting rural development, narrowing the urban-rural gap, and achieving common prosperity. Yuxi's development of emerging industries and specialty agriculture is precisely aimed at creating employment and income opportunities for more Yuxi people, beyond tobacco.

The significance of industrial diversification for Yuxi's livelihood lies further in the resilience and sustainability it brings to livelihood security. The "one dominant tobacco" structure ties Yuxi's welfare closely to this single industry—once tobacco fluctuates, Yuxi's finances and livelihood are shaken. By developing diversified industries, Yuxi can build a more solid and sustainable fiscal and employment base, so that its prosperity is not destabilized by the fluctuations of a single industry. Only a diversely supported economy can provide more secure and more sustainable livelihood welfare. Yuxi's "second venture" and its push for industrial diversification are, in essence, also aimed at making the good life of Yuxi's people more enduring and more secure.

Yuxi's excellent ecological environment and deep cultural heritage are also important components of its people's welfare. The clear waters of Fuxian Lake, the pleasant climate, and the beautiful surroundings make Yuxi a livable city; Nie Er culture, ancient Dian civilization, and the Chengjiang fossil site enrich the spiritual and cultural life of Yuxi's people. Beyond material life, a fine ecology and a rich culture are equally important elements of the happiness of Yuxi's people. As Yuxi advances industrialization and develops industry, it also safeguards its lucid waters and lush mountains and carries forward its history and culture, so that its people can enjoy both the prosperity brought by industrial development and the beauty brought by a fine ecology and rich culture—this is a more comprehensive and higher-quality form of livelihood welfare.

Placing "people" at the center in viewing Yuxi's industry allows us to understand its transformation more deeply. The ultimate purpose of Yuxi's "second venture" and its push for industrial diversification is to enable Yuxi's people to live better and more sustainable lives—with more employment, steadier income, more comprehensive security, and a more beautiful environment. From "prosperity sustained by a single cigarette" to "high-quality living supported by diversified industries," Yuxi's industrial transformation is, in essence, a livelihood upgrade concerning the welfare of millions of residents. This people-first original intention should be the fundamental starting point and end goal of Yuxi's industrial development. And to realize this livelihood welfare, industry must also be laid out rationally in space and form a division of labor among the counties—Yuxi's county-level industrial landscape is an important foundation for translating industrial development into reality and spreading its benefits to all.

30. One County, One Industry: Yuxi's County-Level Industrial Landscape

A city's industrial development must ultimately be grounded in specific space—in the individual counties and districts under its jurisdiction. Yuxi's industries are not evenly distributed across the city; rather, drawing on the differing resource endowments and locational conditions of each county and district, they have formed a county-level industrial landscape of "one county, one industry, each with its own character." To understand this landscape is to understand the spatial logic of Yuxi's industrial layout, and to see the county-level foundation of Yuxi's industrial diversification.

Yuxi's county-level industrial landscape has taken shape naturally around each locality's resource endowment. The main urban district, Hongta District, is Yuxi's political, economic, and cultural center, and the seat of core industries such as tobacco (Hongta Group)—the heart of Yuxi's industry. Tonghai County, drawing on its suitable climate and mature industrial organization, has built vegetable cultivation into a major industry that reaches across the country and exports abroad, making it a representative of Yuxi's outward-oriented agriculture. Huaning County is known for specialty fresh fruit such as citrus, and also has distinctive industries such as ceramics. Xinping County has both a specialty agricultural brand like Chu oranges and resource-based industries such as mining and metallurgy. Chengjiang (a county-level city), home to Fuxian Lake and the Chengjiang fossil site, excels in eco-tourism and green agriculture. Jiangchuan District possesses the deep heritage of ancient Dian culture and a corresponding industrial layout. Each county and district, drawing on its own endowments, develops distinctive leading industries, together constituting Yuxi's rich and diversified county-level industrial map.

The "one county, one industry" pattern is the county-level foundation of Yuxi's industrial diversification. Overall, Yuxi is characterized by "one dominant tobacco," but at the county level—apart from the main urban district where tobacco is concentrated—each county and district in fact develops quite diversified industries: vegetables (Tonghai), citrus (Huaning), Chu oranges (Xinping), eco-tourism (Chengjiang), and mining and metallurgy (Xinping and others). This diversity of county-level industry provides the foundation for Yuxi's overall industrial diversification. Yuxi's push for a "second venture" and the development of diversified industries is, to a large extent, about making the specialty industries of each county and district bigger and stronger, while cultivating emerging industries such as new-energy batteries, thereby building a diversified city-wide industrial system on the foundation of county-level diversity. The county is an important vehicle for Yuxi's industrial diversification.

Developing the county economy holds multiple significances for Yuxi. First, it enlarges the total scale of industry. The county is a broad space for industrial development; making each locality's specialty industries bigger and stronger can contribute more output, tax revenue, and employment to Yuxi, enlarging the city-wide industrial base. Second, it promotes balanced development. By developing the county economy and spreading the dividends of industrial development to each county and district and to the broad rural areas, Yuxi can promote balanced urban-rural and regional development and narrow the gaps. Third, it enriches the people through higher incomes. County-level industries, especially specialty agriculture, directly benefit vast numbers of ordinary farming households and are an important lever for enriching the people and revitalizing the countryside. Developing the county economy is an important path for Yuxi to enlarge its industries, promote balance, and enrich its people.

For Yuxi, the key to developing the county economy lies in "adapting to local conditions and pursuing differentiated development." The counties and districts differ in resource endowment, locational conditions, and development base, and their industrial paths should therefore be tailored to local conditions, each with its own emphasis—those suited to growing vegetables (Tonghai) should make vegetables strong, those suited to growing fruit (Huaning, Xinping) should make specialty fresh fruit excellent, those with fine ecology (Chengjiang) should develop eco-tourism and green agriculture, and those with mineral resources should develop mining and metallurgy (while attending to green practices and ecological protection). Guiding each county and district to focus on the leading industries in which it holds advantages, and to develop them deeply and thoroughly while avoiding homogeneous competition, is the key to the healthy development of Yuxi's county economy. Only through "one county, one industry, each playing to its strengths" can Yuxi's county-level industrial landscape be both rich and diverse and individually competitive.

The upgrading of county-level industry is also an important component of Yuxi's overall industrial upgrading. Many of the specialty industries in Yuxi's counties and districts still remain at a relatively primary stage—agriculture is dominated by selling primary farm produce, mining and metallurgy by selling primary metals, and added value remains to be raised. Pushing county-level specialty industries to upgrade toward higher-value directions such as intensive processing, brand operation, and industrial integration is the key to raising the quality and efficiency of Yuxi's county economy. For example, raising the added value of Tonghai's vegetables, Huaning's citrus, and Xinping's Chu oranges through processing and branding; and converting Chengjiang's ecological advantages into comprehensive returns through the integration of agriculture and tourism. The upgrading of county-level specialty industries shares the same logic as Yuxi's overall industrial upgrading—both aim to convert "resource advantages" into "industrial advantages."

Yuxi's "one county, one industry" county-level industrial landscape is the county-level foundation of its industrial diversification, and an important vehicle for enlarging its industries, promoting balance, and enriching its people. Drawing on the distinctive endowments of each county and district—strengthening specialty industries, driving county-level upgrading, and promoting differentiated development—is an important path for Yuxi to translate industrial development into reality and spread its benefits to all. And within Yuxi's county-level industries there is an unavoidable hard constraint and a major theme: ecological protection—especially the protection of Fuxian Lake, that jewel of the plateau, which profoundly shapes Yuxi's industrial layout and mode of development. How to balance ecology and industry is a special examination that Yuxi must answer.

31. Ecology and Industry: The Balancing Act on the Shores of Fuxian Lake

Yuxi's industrial development faces a special and severe examination—ecological protection, and above all the protection of Fuxian Lake, that jewel of the plateau. As one of China's largest deep-water freshwater lakes, an important ecological barrier for Yunnan, and a source of high-quality water, Fuxian Lake, and its protection, profoundly constrain and shape Yuxi's industrial layout and mode of development. How to develop industry while protecting "a lake of clear water" is a balancing act of "ecology and industry" that Yuxi must answer, and an unavoidable theme in its pursuit of high-quality development.

To Yuxi and to Yunnan, Fuxian Lake is an exceedingly precious ecological asset. Its waters are clear and of fine quality, its storage capacity vast; it is a precious source of high-quality fresh water and an important ecological barrier. Such a lake of clear water is a priceless gift bestowed on Yuxi by nature; protecting it is Yuxi's bounden duty and a long-term undertaking bearing on future generations. Yet industrial development—especially heavy chemical and highly polluting industries—poses an enormous potential threat to the water body and the ecology. If Fuxian Lake were polluted for the sake of short-term economic gain, it would be an irreversible loss. Therefore, in developing industry, Yuxi must place the protection of Fuxian Lake and other ecological assets in a position of priority and resolutely hold the ecological bottom line.

This balancing act of "ecology and industry" imposes a hard constraint on Yuxi's industrial development. In the Fuxian Lake basin and the surrounding ecologically sensitive areas, high-pollution, high-energy-consumption, and high-emission industries are strictly restricted or even prohibited; some industries that threaten the ecology must withdraw from sensitive areas, concentrate in industrial parks, and stay away from the lakes. This means that Yuxi cannot, as some places do, disregard the ecology and lay out industry haphazardly in order to enlarge industry; it must instead, under strict ecological constraints, prudently select and site its industries. The ecological red line is a boundary that Yuxi's industrial development must not cross. This both increases the difficulty and cost of Yuxi's industrial development and compels Yuxi onto a greener, higher-quality path of development.

But from another angle, strict ecological constraints are also becoming a "forcing" power driving Yuxi's industrial transformation and upgrading. Because it cannot develop high-pollution industries, Yuxi must develop green, low-pollution, high-value-added industries—which aligns closely with the direction of Yuxi's "second venture." New-energy batteries, green manufacturing, plateau specialty agriculture, green food, and eco-tourism—these industries that Yuxi prioritizes are mostly green, low-pollution, and sustainable, meeting both the requirements of ecological protection and the direction of high-quality development. Ecological constraints compel Yuxi to bid farewell to the extensive development model dependent on high-pollution industries and to embark on a green, high-quality path of development. In this sense, ecological constraints are not merely a burden but, even more, a driving force for transformation.

Going further, a fine ecology is itself a precious development resource and competitive advantage for Yuxi. "Lucid waters and lush mountains are invaluable assets"—the clear waters of Fuxian Lake and the excellent ecological environment are precious conditions for Yuxi to develop eco-tourism, green agriculture, and health and wellness industries; a fine ecology and livable environment are also an important competitive strength for Yuxi in attracting talent and enterprises. Converting ecological advantages into development advantages is the key to Yuxi's practice of the "Two Mountains" concept. Yuxi's development of green manufacturing, plateau specialty agriculture, and eco-tourism is precisely aimed at converting a fine ecology into real, tangible industrial value and development advantage. Ecology and industry need not be opposed—they can accomplish each other: developing while protecting, and protecting while developing.

Yuxi has already made active explorations and efforts in balancing ecology and industry. It has placed the protection of Fuxian Lake in a prominent position, advancing basin-wide ecological governance, the withdrawal of industries, and green transformation; it has guided industry to concentrate in parks and away from ecologically sensitive areas, promoting the greening and circular transformation of industry; and it has vigorously developed eco-friendly industries such as green manufacturing, green agriculture, and eco-tourism. These efforts all aim to pursue a green, high-quality path of industrial development while protecting "a lake of clear water." Although this path is harder to walk and higher in cost, it is the only way for Yuxi to achieve sustainable development, and the right choice to be responsible to future generations.

The balancing act of "ecology and industry" is an unavoidable examination in Yuxi's pursuit of high-quality development, and a distinctive feature that sets it apart from other industrial cities. Guarding Fuxian Lake, that jewel of the plateau, Yuxi cannot follow the old road of "pollute first, treat later"; it must, under strict ecological constraints, pursue a green, low-carbon, and sustainable path of development. Severe as this examination is, it is also compelling and leading Yuxi toward higher-quality development. Protecting the ecology well and developing green industries well, so that "lucid waters and lush mountains" and "invaluable assets" reinforce each other, is the wise choice for Yuxi's future. And Yuxi's green manufacturing—especially its new-energy battery industry—does not dance alone in Yunnan: with Qujing in eastern Yunnan, it is staging a "twin-city co-opetition" over "new-energy batteries." This co-opetition is an important lens for understanding the positioning of Yuxi's new-energy industry.

32. Twin-City Co-opetition: The New-Energy Contest Between Yuxi and Qujing

On the map of Yunnan's new-energy battery development, Yuxi does not dance alone. Qujing, in eastern Yunnan, is likewise vigorously developing new-energy battery and photovoltaic industries—and it started earlier and on a larger scale. Yuxi and Qujing, these two industrial cities of Yunnan, are staging a "twin-city co-opetition" on the new-energy track. To understand this co-opetition is to understand the place and positioning of Yuxi's new-energy industry within Yunnan and even nationally.

Consider first Qujing's strength. Qujing is the main battlefield of Yunnan's green manufacturing; known as the "Green Crystalline-Silicon PV Capital," it has gathered photovoltaic leaders such as LONGi, and its silicon-rod and wafer capacity accounts for a considerable share of the national total. In new-energy batteries, Qujing has gathered lithium iron phosphate (LFP) cathode-material leaders such as Dynanonic, whose LFP cathode capacity once accounted for a considerable share of the national total, and has also clustered a group of battery and material enterprises such as EVE Energy and Yuneng, building two hundred-billion-yuan-class industrial clusters of "photovoltaics + batteries." It can be said that on Yunnan's new-energy map, Qujing is the undisputed "vanguard," with the scale and concentration of its photovoltaic and lithium-battery industries at the forefront of the province.

Consider next Yuxi's distinctive character. Compared with Qujing, the greatest distinction and advantage of Yuxi's new-energy battery industry is that it is home to Semcorp, the world's leading separator maker. The separator is a key material of the lithium battery, with extremely high technical barriers, and Semcorp is the world's largest supplier of wet-process separators, headquartered in Yuxi. To be home to such a world-class separator leader is a unique advantage of Yuxi over Qujing—and indeed over many places nationwide. In addition, Yuxi plans to take Semcorp as its core and, together with Yuntianhua, EVE Energy, Huayou, and others, build a hundred-billion-yuan cluster spanning separators, cathodes, cells, and copper foil. Yuxi's new-energy battery industry, distinguished and led by its "world separator champion," is pursuing a differentiated path.

The relationship between Yuxi and Qujing is a twin-city co-opetition of "both competing and cooperating." On the competitive side: both cities are vigorously developing new-energy batteries, both are vying for projects, attracting investment, and building out capacity, so homogeneous competition is inevitable—especially against a backdrop of a downturn in the lithium-battery cycle and overcapacity, the competition between the two may become even fiercer. On the cooperative side: the two cities can, in fact, form a division of labor along the new-energy battery value chain—Qujing's strengths lie in cathode materials (Dynanonic and others) and photovoltaics, Yuxi's strength lies in separators (Semcorp); if the two can form a division of labor based on their respective comparative advantages, with Qujing making cathodes and photovoltaics and Yuxi making separators, plus Yuntianhua's phosphorus source and EVE Energy's cells, they could form a relatively complete new-energy battery value chain within Yunnan Province. This intra-provincial value-chain synergy is the ideal configuration for Yunnan's new-energy battery development.

For Yuxi, the key in this twin-city co-opetition is to identify its own differentiated positioning and to leverage its own unique advantages. Yuxi need not, and cannot, compete with Qujing across every link; it should focus on the field in which it holds the greatest advantage—taking Semcorp's separators as its core and lead, developing the separator link to the extreme and to global leadership, while joining with other enterprises to complete the value chain. "Standing on separators, led by its leading enterprise, and winning through differentiation" should be Yuxi's proper positioning in Yunnan's new-energy battery co-opetition. Only by leveraging the unique advantage of Semcorp, a world champion, and pursuing a differentiated, distinctive path can Yuxi gain a firm footing in the fierce co-opetition and win the future.

Viewed from a larger perspective, the twin-city co-opetition between Yuxi and Qujing is also a microcosm and an opportunity for Yunnan's development of the new-energy battery industry. The two cities, each playing to its strengths, both competing and cooperating, jointly propel the development of Yunnan's new-energy battery industry, and may well enable Yunnan to secure a place on the national new-energy battery map. Yunnan's development of new-energy batteries enjoys unique advantages—green electricity (low-cost, low-carbon energy), phosphate ore (the phosphorus source for LFP), and enterprises such as Semcorp (world separator champion) and Dynanonic (cathode leader). If Yuxi and Qujing, as the two pillars of Yunnan's new-energy batteries, can form a benign co-opetition and a rational division of labor, they can jointly make Yunnan's new-energy battery industry bigger and stronger. This is a win-win choice for Yuxi, for Qujing, and for Yunnan.

The new-energy contest between Yuxi and Qujing is a twin-city co-opetition full of intrigue. It holds both the tension of competition and the space for cooperation. For Yuxi, the key is to leverage the unique advantage of Semcorp, a world champion, to identify its differentiated positioning, standing on separators and winning through distinction. This co-opetition is the real competitive environment facing Yuxi's new-energy battery industry, and a challenge it must meet. And whether in its co-opetition with Qujing or in its own transformation and breakthrough, Yuxi does not act in isolation—it is deeply embedded in the regional landscape of Yunnan and of the Central Yunnan city cluster. Yuxi's regional relationships with the provincial capital Kunming and with neighboring cities are yet another important dimension of its development landscape. This is precisely the question that "Kunming-Yuxi integration" seeks to answer.

33. Kunming–Yuxi Integration: Yuxi's Regional Relationship with Kunming

The development of a city does not take place in isolation; it is profoundly shaped by that city's relationships with its neighbors, and above all with the central city of its region. For Yuxi, its relationship with the provincial capital, Kunming, is a key variable that shapes its overall development. Yuxi sits in central Yunnan, immediately adjacent to Kunming, and the "Kunming–Yuxi integration" now under way is reshaping Yuxi's development landscape while opening new opportunities and space for its industrial transformation.

The geographic ties between Yuxi and Kunming are exceptionally close. Yuxi lies to the south of Kunming, a short distance away, and is an important component of the central Yunnan urban cluster. As a city bordering the provincial capital, Yuxi can both conveniently receive the radiating pull of Kunming and form industrial collaboration with it. This "advantage of proximity" is one of Yuxi's major strengths relative to other Yunnan cities that are farther from Kunming. Yuxi is able to make full use of its close links with Kunming to achieve interconnection and coordinated development with the provincial capital in talent, technology, capital, markets, information, and more.

What "Kunming–Yuxi integration" brings to Yuxi is, first of all, the opportunity to receive the provincial capital's radiating influence. As the capital, Kunming concentrates Yunnan's finest resources in science, education, talent, finance, corporate headquarters, and other high-end functions. Being adjacent to Kunming, Yuxi can conveniently share in and absorb these resources—for example, drawing on Kunming's science-and-education resources and talent to support R&D and innovation in Yuxi's emerging industries such as new-energy batteries, and drawing on Kunming's financial and headquarters resources to provide capital and services for Yuxi's industrial development. At the same time, Yuxi can take on industries that Kunming is offloading—some industries unsuited to the Kunming urban core (such as energy-intensive, land-intensive manufacturing) can be relocated to Yuxi. Receiving the capital's radiating influence is an important opportunity for Yuxi to leverage Kunming and accelerate its own growth.

"Kunming–Yuxi integration" also means industrial coordination between Yuxi and Kunming. As an important member of the central Yunnan urban cluster, Yuxi can form a division of labor and collaboration with Kunming. Kunming focuses on high-end services, the headquarters economy, R&D and innovation, and hub functions, while Yuxi can focus on manufacturing (tobacco, new-energy batteries, steel) and distinctive agriculture. The two cities complement each other along the industrial chain—for instance, Yuxi's new-energy battery industry can draw on Kunming's high-end services in R&D, headquarters, finance, and logistics, while related industries in Kunming can form supporting linkages with Yuxi. This division of labor—"the capital doing high-end services, Yuxi doing distinctive manufacturing"—allows the two cities to pool their strengths and jointly build up central Yunnan's industry.

That said, the relationship between Yuxi and Kunming also has an aspect that must be handled carefully. As a city bordering the capital, Yuxi can both enjoy the dividends of the capital's radiating influence and face the pressure of the capital's "siphon effect"—high-quality talent, capital, and enterprises may be drawn to Kunming, a higher-tier central city. How to strike a balance between "receiving the radiating influence" and "avoiding being siphoned off" is a question Yuxi must handle with wisdom in managing its relationship with Kunming. Yuxi's answer lies in leveraging its own distinctive strengths (tobacco, Semcorp, distinctive agriculture, the ecology of Fuxian Lake, and so on) to establish a differentiated position vis-à-vis Kunming—doing what Kunming cannot do, or is not suited to do—so as to play to its strengths and pursue differentiated, complementary development within its relationship with the capital.

Viewed on a larger scale, "Kunming–Yuxi integration" is an important part of "the integration of the central Yunnan urban cluster." Centered on Kunming and linking Yuxi, Qujing, Chuxiong, and other cities, the central Yunnan urban cluster is Yunnan's core economic engine. As an important member of this cluster, Yuxi can better integrate into the broader regional development picture and share in the dividends of regional integration through coordinated integration with Kunming and neighboring cities. Strengthening the central Yunnan urban cluster is, for Yuxi, both an opportunity (sharing in regional development dividends) and a responsibility (contributing its part as an important member). Yuxi's active integration into "Kunming–Yuxi integration" and "central Yunnan urban cluster integration" is the correct choice for leveraging the region to accelerate its development.

"Kunming–Yuxi integration" is reshaping Yuxi's development landscape. It enables Yuxi to better receive the capital's radiating influence, coordinate industrially with Kunming, and integrate into the broader regional picture, providing new opportunities and space for its industrial transformation and high-quality development. Yuxi must, of course, also manage its relationship with Kunming well—playing to its strengths, pursuing differentiated development, and avoiding being excessively siphoned off. On the whole, bordering the capital and integrating into the central Yunnan urban cluster is a major locational advantage Yuxi enjoys relative to other Yunnan cities. But to truly put this locational advantage to good use, transportation support is also required—convenient transportation is the foundation of "Kunming–Yuxi integration" and regional coordination. Yuxi's transportation and location constitute yet another important dimension of its development landscape.

34. Transportation and Location: Yuxi's Integration into the Major Corridors

Transportation is the lifeblood of industrial development and the foundation of regional coordination. For Yuxi, convenient transportation and a favorable location are important supports for receiving the capital's radiating influence, integrating into regional development, and connecting with the major corridors of opening-up. Yuxi's transportation and location profoundly shape its industrial development, and they also provide important conditions for its "second venture."

Yuxi's greatest locational advantage is "bordering the capital and sitting in central Yunnan." Located south of Kunming, it is an important member of the central Yunnan urban cluster and closely linked to the provincial capital. This location adjacent to the capital enables Yuxi to conveniently receive Kunming's radiating pull, share in the capital's high-end resources, and form industrial coordination with Kunming. At the same time, Yuxi lies in the heartland of central Yunnan and is an important node on the route southward from central Yunnan (toward Honghe and, farther still, toward Southeast Asia). Its central-Yunnan location allows Yuxi to lean on the capital behind it while facing southern Yunnan and even Southeast Asia ahead, giving it the potential to serve as a hub linking east and west, north and south.

Convenient transportation is the foundation for realizing Yuxi's locational advantages. Between Yuxi and Kunming there are convenient links such as expressways and railways, giving "Kunming–Yuxi integration" a solid basis—flows of people, goods, and information can move efficiently between the two cities. As transportation infrastructure continues to improve, Yuxi's ties with Kunming, with other central Yunnan cities, and with southern Yunnan grow ever closer, and its conditions for integrating into regional development and receiving industrial radiation become ever more favorable. Convenient transportation enables Yuxi to better leverage Kunming, integrate into central Yunnan, connect with southern Yunnan, and convert its locational advantage into a development advantage.

Yuxi's transportation and location also connect to Yunnan's major corridors for opening-up toward South Asia and Southeast Asia. Yunnan is China's gateway to South Asia and Southeast Asia, and the China–Laos Railway, along with transportation corridors toward Southeast Asia now being planned and built, are linking Yunnan ever more closely with Southeast Asia. As an important node on central Yunnan's southward route, Yuxi can integrate into this open corridor toward Southeast Asia and share in the dividends of border opening-up. This provides corridor support for Yuxi's products—whether new-energy batteries and green-manufacturing goods, or distinctive agricultural products such as Tonghai vegetables—to reach Southeast Asian markets. Integrating into the open corridor toward Southeast Asia is an important opportunity for Yuxi to expand its market space and connect with international markets.

The significance of transportation and location for Yuxi's new-energy battery industry deserves particular attention. The production of new-energy batteries and materials requires convenient logistics to transport raw materials and finished products. Yuxi's convenient transportation can provide efficient logistics support for new-energy battery enterprises such as Semcorp—raw materials can be brought in conveniently, and products can be shipped out conveniently to downstream battery makers and markets. At the same time, Yuxi's location adjacent to Kunming allows new-energy battery enterprises to conveniently share in Kunming's R&D, headquarters, and financial resources, as well as hub functions such as Changshui Airport and the Wangjiaying inland port. A sound transportation and locational position is an important foundational condition for Yuxi's development of new-energy batteries and other industries.

To be sure, compared with developed regions, Yuxi's transportation and location also have their limitations. As an inland prefecture-level city in the southwest, Yuxi's transportation network, logistics efficiency, and ease of external connectivity still lag behind coastal developed regions. Moreover, Yuxi itself has no seaport; the outbound shipment of products and inbound import of raw materials still depend largely on the overall transportation network of Kunming and Yunnan. These limitations are real constraints Yuxi must face as it develops export-oriented industries. To fully realize its locational advantages, Yuxi must continue to improve its transportation infrastructure, raise logistics efficiency, and strengthen its connectivity with Kunming and the regional transportation network.

On the whole—bordering the capital, sitting in central Yunnan, connecting to southern Yunnan, and integrating into the open corridor toward Southeast Asia—Yuxi's transportation and location provide favorable conditions for receiving the capital's radiating influence, integrating into regional development, and connecting with domestic and international markets. Making good use of this locational advantage, improving transportation infrastructure, and strengthening regional coordination are the keys to converting Yuxi's locational advantage into a development advantage. Having reviewed Yuxi's industrial foundations, emerging layout, distinctive agriculture, urban character, and locational conditions, we must now return to the most central proposition of Yuxi's industrial transformation—faced with tobacco, a pillar that is at once stable and capped by a ceiling, where exactly does the urgency of Yuxi's "second venture" lie? This is the key to understanding the future of Yuxi's industry.

35. The Tobacco Ceiling: The Urgency of the Second Venture

Why is Yuxi so resolute in advancing its "second venture"? Why go to such lengths to cultivate new industries beyond the stable and lucrative pillar of tobacco? The answer lies in four words: "the tobacco ceiling." Although tobacco remains solid for now, it faces a long-term, structural ceiling, and this is precisely the deepest and most pressing driver of Yuxi's "second venture." Only by understanding this ceiling can one understand the necessity and urgency of Yuxi's transformation.

The first layer of the tobacco ceiling comes from the global trend of tobacco control. That smoking harms health is a scientific conclusion recognized worldwide. As health awareness rises, tobacco-control efforts intensify, and the "Healthy China" strategy advances, tobacco consumption faces, over the long term, pressure toward saturation and even contraction of demand. The WHO Framework Convention on Tobacco Control, national tobacco-control policies, smoking bans in public places, restrictions on tobacco advertising, health warnings, and higher tobacco taxes are all curbing tobacco consumption over the long run. Although China's tobacco consumption remains vast in the short term, over the long-term trend tobacco control is an irreversible tide, and the tobacco industry's room for growth is set to narrow over time. This backdrop is a long-standing "ceiling" hanging over the entire tobacco industry—and over Yuxi, this "city of tobacco," as well.

The second layer of the tobacco ceiling comes from the growth constraints under the monopoly system. Under the state tobacco monopoly system, cigarette output and sales are subject to strict planned control. This means that the scale of Yuxi's tobacco industry and the growth of its tax revenue depend largely on national tobacco policy and the trajectory of the industry as a whole, rather than on anything Yuxi itself can decide. Enterprises cannot expand indefinitely through free competition, and the industry's overall size is tightly controlled. This institutional constraint means Yuxi's tobacco industry has relatively limited room to grow—it can optimize its product mix within the existing scale, move upmarket, and increase tax revenue, but it can hardly achieve a large-scale expansion. The stability of the monopoly system is a safeguard for Yuxi's tobacco industry, but its growth constraints are also a reality Yuxi must face.

The third layer of the tobacco ceiling comes from the very fragility of the "tobacco-dominant" structure. As noted repeatedly above, about seventy percent of Yuxi's industrial profits come from tobacco, and this highly concentrated structure binds Yuxi's economic fate deeply to this single industry. Should the tobacco industry experience any fluctuation—whether tighter tobacco-control policy, adjustments to the consumption tax, or shifts in market demand—Yuxi's economy and public finances would suffer an enormous shock, with no other industries to hedge against it. This structural fragility of "staking seventy percent of profits on a single industry" is in itself an enormous risk. Yuxi must cultivate new pillar industries to diversify this risk and strengthen the resilience of its economy.

It is precisely these three layers of the ceiling that lend Yuxi's "second venture" its profound urgency. This urgency can be summed up in one sentence: while the tobacco dividend still lasts, prepare early for the day when tobacco "hits its ceiling." If Yuxi waits until the tobacco pillar is clearly in decline before passively transforming, it will face enormous difficulties—by then, with strained finances and limited resources, the costs and risks of transformation will rise sharply. But by proactively laying out emerging industries and cultivating new pillars now, while the tobacco dividend still holds and finances remain ample, the city can win the initiative and the time to secure its future. "Preparing before the storm" is far better than "mending the fold after the sheep are lost"—this is the deeper logic behind why Yuxi's "second venture" cannot wait.

What is especially commendable is that Yuxi has a clear-eyed awareness of this urgency and is acting on it proactively. It has not indulged in the comfort zone of tobacco and lived off past gains; instead, it has stayed alert in times of ease, actively sought change, and made new-energy batteries and other emerging industries its main line of attack, laying them out and investing in them in concrete terms. This strategic clarity—"thinking about the worst possibility in the best of times, laying out the future while the dividend still holds"—is what makes Yuxi most admirable. It reflects a city's foresight and sense of responsibility: not beguiled by present ease, but preparing for long-term, sustainable development before the storm. This clarity and action are the key to whether Yuxi can succeed in its "second venture."

It must be emphasized once again that squarely facing the "tobacco ceiling" is by no means a denial of tobacco's contribution, still less an abandonment of tobacco. On the contrary, tobacco is the foundation of Yuxi's standing and the base of its public finances, the most solid backing for its "second venture"—it is precisely because tobacco provides ample fiscal resources that Yuxi has the confidence and the means to cultivate emerging industries. The correct logic of Yuxi's transformation is "hold on to tobacco, cultivate new pillars"—firmly holding on to the fundamental base that tobacco provides, using its dividends and resources, while vigorously cultivating new pillars such as new-energy batteries, so as ultimately to optimize the structure from "tobacco-dominant" to "diversified support." This is the full meaning of Yuxi's "second venture." And how exactly is this transformation path—from "single" to "diversified"—to be carried through? This is the most central question for the future of Yuxi's industry.

36. The Transformation Path: From One Cigarette to Multiple Pillars

Faced with the "tobacco-dominant" structure and the urgency of the "tobacco ceiling," the transformation path of Yuxi's "second venture" can be summed up in a single phrase—from "one cigarette" to "multiple pillars." This path is not about abandoning tobacco, but about cultivating new, diversified pillars while holding on to the fundamental base of tobacco, so as to build a modern industrial system that is structurally sound and diversely supported. Clarifying the logic of Yuxi's transformation reveals the direction in which this city is heading toward the future.

The first strand of the transformation path, and the most central, is "hold on to tobacco, use tobacco to nurture the new." Tobacco is the foundation of Yuxi's standing and the base of its public finances, and it must be safeguarded—by advancing the premiumization, modernization, and greening of tobacco to steady this fundamental base, so it continues to provide Yuxi with ample fiscal revenue and reliable tax income. Even more important is "using tobacco to nurture the new"—using the dividends and fiscal resources that tobacco provides to cultivate emerging industries. The reason Yuxi has the confidence to advance its "second venture" is precisely that it has tobacco as a solid backing. Holding on to tobacco and using the tobacco dividend well to cultivate new pillars is the most fundamental logic of Yuxi's transformation. It is a pragmatic strategy of "using the old to nurture the new, transitioning steadily."

The second strand of the transformation path is "building new-energy batteries into a new pillar." This is the number-one project and the main line of attack of Yuxi's "second venture." Relying on Semcorp, the global leader in battery separators, and joining forces with enterprises such as Yuntianhua, EVE Energy, and Huayou, and drawing on Yunnan's advantages in green electricity and phosphate ore, Yuxi is planning to build a 100-billion-yuan (10-billion-plus dollar) new-energy battery industrial cluster. If this cluster can be built and reach full production, Yuxi will be able to create, after tobacco, a new pillar in a strategic emerging industry, achieving "dual-engine drive." New-energy batteries are Yuxi's greatest hope and heaviest bet in its transformation. Cultivating this new pillar is the key step in Yuxi's journey "from one cigarette to multiple pillars."

The third strand of the transformation path is "upgrading traditional industries and developing distinctive industries." Beyond the new pillar of new-energy batteries, Yuxi must also push the transformation and upgrading of traditional industries such as mining and metallurgy (steel and nonferrous metals)—developing them toward the high end and toward green production, using green electricity to cut carbon and enhance value added. At the same time, Yuxi must vigorously develop plateau-characteristic agriculture and green food processing—relying on distinctive agricultural products such as Tonghai vegetables, Huaning citrus, and Chu Orange to develop a green food industry that turns agricultural endowments into industrial value. In addition, it must lay out the digital economy and other new sectors. Exerting effort in multiple directions and cultivating multiple pillars—building a diversified industrial system of "tobacco + new-energy batteries + green manufacturing + distinctive agriculture + digital economy"—is the complete picture of Yuxi's transformation.

The fourth strand of the transformation path is "green and open as the two main threads." Green is the defining hue of Yuxi's transformation—relying on Yunnan's green electricity to develop green manufacturing, green steel, and green food, making "green" the key to industrial upgrading and differentiated competition, while protecting ecosystems such as Fuxian Lake and pursuing a path of coordinated development between ecology and industry. Openness is an important engine for Yuxi to expand its space—using "Kunming–Yuxi integration" to receive the capital's radiating influence and integrate into the central Yunnan urban cluster, and using the open corridor toward Southeast Asia to expand its market hinterland. Green and open are the two threads running through Yuxi's transformation, injecting differentiated competitiveness and growth potential into its industrial upgrading.

To carry this transformation path through, Yuxi must also make up several "soft-power" shortfalls. The first is talent—the development of emerging industries is inseparable from talent, and Yuxi must make good use of advantages such as its proximity to Kunming and its excellent ecological environment to attract and retain industrial talent. The second is innovation—Yuxi must make good use of the technological strengths of enterprises such as Semcorp, strengthen industry-university-research collaboration, and raise local innovation capacity. The third is the business environment and the private economy—Yuxi is a city dominated by a state-owned tobacco economy, and it must energize the private economy, optimize the business environment, and create favorable conditions for the development of emerging industries and market entities. The success of private enterprises such as Yukun Iron & Steel and Semcorp proves that Yuxi has the soil to nurture outstanding private enterprises. Making up these soft-power shortfalls is an important guarantee for Yuxi's transformation to proceed steadily and go the distance.

"From one cigarette to multiple pillars" is the complete path and fundamental direction of Yuxi's industrial transformation. It rests on "hold on to tobacco, use tobacco to nurture the new" as its foundation, centers on "building new-energy batteries into a new pillar," is supported by "upgrading traditional industries and developing distinctive industries," runs on the threads of "green and open," and is safeguarded by "making up soft-power shortfalls"—striving to build a modern industrial system that is diversely supported, structurally sound, green and low-carbon, and open and coordinated. This path is pragmatic and clear-eyed, grounded in Yuxi's own strengths and endowments, and pointing toward a more sustainable, higher-quality future. Yet however fine the blueprint for transformation, it must be delivered through step-by-step implementation, and along the way there remain many risks and uncertainties that must be faced with clear eyes.

37. Risks and Uncertainties: The Hidden Reefs of the Second Venture

The direction of Yuxi's "second venture" is clear, its endowments are distinctive, and its efforts are resolute. But no transformation is a smooth road, and Yuxi's "second venture" also harbors risks and uncertainties that cannot be ignored. As an analysis that strives for objectivity, we must mark out these hidden reefs one by one, so as to arrive at a clear-eyed judgment of the prospects of Yuxi's industry.

The first risk comes from the violent cyclical swings of the new-energy battery industry. The new-energy batteries on which Yuxi is betting heavily happen to be the industry that has seen the most aggressive capacity expansion and the fiercest competition over the past two years. From separators to cathodes and anodes, from materials to cells, the lithium-battery supply chain already shows clear overcapacity, prices have fallen sharply, and enterprises are broadly under pressure. Even a global separator leader like Semcorp has been hit by the industry cycle. As a participant in this round of layout, Yuxi faces great uncertainty over whether its new-energy battery projects can gain a firm footing and turn a profit in this brutal industry shakeout. Betting on a hot trend also means bearing the violent swings of that trend. This is one of the greatest risks of Yuxi's "second venture."

The second risk comes from the gap between the "plan" and the "reality" of the 100-billion-yuan cluster. As emphasized repeatedly above, Yuxi's 100-billion-yuan new-energy battery cluster remains, for now, primarily a matter of "plans and commitments"; the roughly 51.7 billion yuan of phase-one and phase-two investment and the phase-three target of "exceeding 100 billion yuan" all still await time to be delivered. Cultivating an industrial cluster is a long and complex process, and between signing, construction, commissioning, and reaching full production there are many variables—whether investment arrives on schedule, whether projects are built successfully, whether capacity can be absorbed, and whether enterprises can turn a profit are all uncertain. Especially against the backdrop of a downturn in the industry cycle, some planned projects may be delayed, scaled back, or even canceled. Whether the "planned 100 billion" can become a "real 100 billion" is a major uncertainty facing Yuxi's "second venture." On this point one must keep a clear head and not be blindly optimistic.

The third risk is that "tobacco dependence" is hard to fundamentally change in the short term. Although Yuxi is vigorously advancing its "second venture," it must be said objectively that for emerging industries such as new-energy batteries to truly grow into pillars on a par with tobacco will still take a considerable time. Through this process, Yuxi's dependence on tobacco is hard to fundamentally change in the short term—tobacco still contributes about seventy percent of Yuxi's industrial profits. This means that before the new pillars have matured, Yuxi's economy and public finances remain highly tied to tobacco. Should tobacco experience a significant fluctuation during this "gap between old and new" transitional period, Yuxi could face difficulties in the handover between old and new pillars. How to navigate this transitional period smoothly is a risk that Yuxi's transformation must manage prudently.

The fourth risk comes from the transformation pressures on resource-based traditional industries. Yuxi's traditional mining-and-metallurgy industries, such as steel and nonferrous metals, face multiple pressures: overcapacity, cyclical swings, environmental emissions reduction, and resource constraints. Under the "dual-carbon" goals, these energy-intensive, high-emission industries face enormous transformation pressure. If the green and high-end transformation of traditional industries cannot keep pace, they may become a burden on Yuxi's industry rather than a support. At the same time, the hard constraints of ecological protection for Fuxian Lake and other sites also raise the bar for Yuxi's industrial development. How to advance the transformation and upgrading of traditional industries while protecting the ecology is yet another challenge Yuxi faces.

In addition, several other uncertainties warrant attention: the development of emerging industries depends heavily on talent, technology, and capital, and as a prefecture-level city Yuxi has clear shortfalls in these areas relative to developed regions, with uncertainty over whether it can make them up; emerging industries also depend heavily on leading enterprises (such as Semcorp), and should a leader contract due to its own cycle or a strategic adjustment, the stability of Yuxi's related industries would be affected; and the dividends of opening-up toward Southeast Asia also depend on the stability of the surrounding environment and the deepening of regional cooperation, which involve external variables. All of these are uncertainties that must be addressed on the road of Yuxi's "second venture."

Laying these risks on the table is not to talk down Yuxi's "second venture," but to add the necessary clarity to this effort. The direction of Yuxi's transformation is right, its endowments are distinctive (holding a world champion in Semcorp, with the supporting advantages of green electricity and phosphate ore), and its opportunities are real—but the road is winding, and the hidden reefs are there. In particular, the cyclical swings of the new-energy battery industry and the uncertainty of whether the 100-billion-yuan cluster will materialize are major risks that Yuxi must handle with prudence. Yuxi must embrace emerging industries while maintaining rationality and steadiness—not expanding blindly, not building redundantly, respecting the laws of industry, and advancing its transformation in a solid, step-by-step manner. At the same time, it must hold on to the fundamental base of tobacco, keep its finances and economy stable, and provide a solid backing for the transformation. The "second venture" is a long-distance run that demands steadiness and patience, not a sprint to be finished at a single stroke. Having reached this point, it is time to draw an overall conclusion for this city that "was built up by one cigarette, and now strives to move beyond that one cigarette."

38. Conclusion: After the Cigarette

Looking back over the full picture of Yuxi's industry, what we see is a city profoundly shaped by a single cigarette, striving to transcend that cigarette. Tobacco is Yuxi's glory and also its defining proposition. It built up the city's prosperity—making Yuxi one of Yunnan's economically strongest cities in per-capita terms; and it also fixed the city's structure—leaving about seventy percent of Yuxi's industrial profits tied to a single industry. Yuxi's story is, in essence, a story about "one cigarette": how it rose by that cigarette, and how it strives to move beyond it toward a more sustainable future.

The history of Yuxi's rise on a single cigarette is a legend. From a small factory on the brink of collapse to "Asia's premier" modern cigarette enterprise, the turnaround of the Yuxi Cigarette Factory (Hongta Group) achieved Yuxi's glory. In this history there is Chu Shijian's business acumen and reformist drive, and also the lesson of his later fall to rock bottom for economic crimes—achievements and faults intertwined, glory and cautionary lesson side by side. We view this history objectively: affirming the enormous contribution tobacco made to Yuxi and to the nation, while remembering the profound lesson it holds about oversight, checks and balances, and governance under the law. This history is the weightiest page in Yuxi's industry and a key to understanding this city.

Yuxi's effort to move beyond a single cigarette is a "second venture" now under way. What is commendable is that Yuxi has not indulged in the comfort zone of tobacco, but has clear-eyedly recognized the risks of being "tobacco-dominant" and the urgency of the "tobacco ceiling," and has proactively set out on a path of industrial diversification and transformation. It has made new-energy batteries its main line of attack—relying on Semcorp, the global champion in battery separators, and drawing on Yunnan's green electricity and phosphate ore, it is planning to build a 100-billion-yuan industrial cluster; it is pushing the green upgrading of traditional mining-and-metallurgy industries, developing plateau-characteristic agriculture and green food, and laying out the digital economy. From "one cigarette" to "multiple pillars," Yuxi is striving to write a different future for itself.

The greatest source of confidence for Yuxi's "second venture" is that it is home to a world champion—Yunnan Energy New Material (Semcorp). This company, headquartered in Yuxi and the world's largest producer of lithium-battery separators, is the core support for Yuxi's transformation from "one cigarette" to "one battery." Semcorp proves that Yuxi can not only produce traditional industries such as tobacco and mining-and-metallurgy, but can also nurture and hold high-end manufacturing enterprises that command a global voice. With Semcorp at the core, plus the supporting linkages of green electricity and phosphate ore and the alliance of several leading enterprises, Yuxi has a distinctive and solid foundation for building a "capital of new-energy batteries." This is Yuxi's most precious industrial asset for the future and the strongest card in its "second venture."

Of course, we must also keep a clear head: Yuxi's "second venture" is far from complete. The violent cyclical swings of the new-energy battery industry, the uncertainty of moving the 100-billion-yuan cluster from "plan" to "reality," the reality that tobacco dependence is hard to fundamentally change in the short term, and the transformation pressures on traditional industries—these hidden reefs could all make the voyage of transformation turbulent or even set it back. Yuxi's journey from "one cigarette" to "multiple pillars" is bound to be a long-distance run that demands steadiness, patience, and wisdom. It will not be achieved at a single stroke, and there is no shortcut. Yuxi must embrace emerging industries while maintaining rationality, and advance its transformation while holding on to the fundamental base of tobacco—proceeding steadily and achieving results through sustained effort.

But the direction is clear, the endowments are distinctive, and the opportunities are real. Yuxi has ample tobacco finances as a backing, has Semcorp—a world champion—at its core, has Yunnan's green electricity and phosphate ore as supporting linkages, and has its proximity to Kunming and its excellent ecology as support. More important still, it possesses a strategic clarity of staying alert in times of ease and actively seeking change—not beguiled by present ease, but preparing for long-term, sustainable development before the storm. This clarity and sense of responsibility are the most crucial qualities determining whether Yuxi can succeed in its "second venture." A city that can think about the worst possibility in the best of times, and lay out its future while the dividend still holds, is in itself worthy of admiration.

Yuxi's story holds profound lessons for the many resource-based and pillar-industry cities across China that depend on a single industry. Most of these cities face a similar proposition: holding on to a single pillar that is stable and lucrative yet capped by a ceiling, how to prepare before the storm, cultivate new pillars, and achieve industrial diversification and sustainable development. Yuxi's exploration along the path of "hold on to tobacco, launch a second venture, build a capital of new-energy batteries"—if it can be carried through—would provide a valuable reference for these cities. And for Yuxi itself, this industrial breakthrough "after the cigarette" concerns whether it can grow from a "city of tobacco" into a modern industrial city that is diversely supported, green and low-carbon, and sustainable. One cigarette built up Yuxi's past; and after the cigarette, Yuxi is striving to write its own broader, more sustainable future. How far this transformation can go is worth our long-term attention and anticipation.

Data Sources and Key References

The data and facts on which this article draws come from the public sources listed below. To aid readers in verification, we set out the main sources by category and note certain data that involve multiple statistical bases or require secondary verification. This article's statements concerning historically sensitive events (such as the Chu Shijian case) are all based on the official findings of investigation and adjudication and on judicial rulings—objective and neutral, treating achievements and faults separately, addressing the matter on its own terms, neither glossing over unlawful conduct nor sensationalizing it, and not using an individual case to negate the development of enterprises or localities.

The foremost data source for this article is the Tianxia Gongchang Industrial Platform (www.tianxiagongchang.com)—a database of Chinese factories and an industrial-chain data platform that provides the underlying support for this report's analysis of industrial belts and enterprises. The remaining sources are as follows:

Macroeconomy and Industrial Aggregates

• Yuxi Municipal Bureau of Statistics and Yuxi Municipal People's Government, 2024 Yuxi Municipal Statistical Communiqué on National Economic and Social Development—official data including Yuxi's 2024 GDP of about 258.21 billion yuan, per-capita GDP of about 113,973 yuan (first in the province), above-designated-size industrial operating revenue of about 207.52 billion yuan, profit of about 11.477 billion yuan, and pig-iron output of about 5.106 million tonnes.
• Yunnan Provincial Bureau of Statistics—the basis for Yuxi's GDP ranking among the leaders within Yunnan (about fourth) and its per-capita GDP ranking first in the province.
• Note: Yuxi's resident population of about 2.26 million is an estimate derived by working back from GDP and per-capita GDP; "historically ranked second in the province for a long period" is a general statement whose specific yearly basis awaits further verification.

Tobacco

• Yuxi statistical communiqués and news reports—in 2024, the operating revenue of Yuxi's tobacco-products industry was about 67.413 billion yuan (about 32.5% of above-designated-size industrial revenue), and its profit was about 8.364 billion yuan (about 73% of above-designated-size industrial profit, calculated from the communiqué data).
• Public materials of Hongta Group and China Tobacco Yunnan Industrial Co., Ltd.—Hongta Group (Yuxi Cigarette Factory); the Hongtashan/Yuxi/Hongmei and other brands; and their industry standing under the monopoly system.
• Note: Hongta Group's exact revenue and tax figures are subject to the enterprise's own reporting; this article makes directional statements.

Chu Shijian

• Public reports and judicial rulings from Xinhua News Agency, the Supreme People's Court, and authoritative media—Chu Shijian served as director of the Yuxi Cigarette Factory from 1979; over his more than ten years in the post, the factory remitted a cumulative total of about 99.1 billion yuan in taxes (approaching 20 billion yuan in peak years, both figures being media retrospective bases); for the crime of embezzlement and the crime of holding a huge amount of property from unidentified sources, he was lawfully sentenced to life imprisonment in January 1999, had his sentence lawfully commuted to seventeen years' fixed-term imprisonment in 2001, and was granted medical parole in 2002.
• Note: The specific amounts involved in the Chu Shijian case are stated variously; this article consistently follows the official characterization (the crime of embezzlement plus the crime of holding a huge amount of property from unidentified sources) and does not enumerate specific figures. Chu Shijian was about 74 years old when, after his medical parole, he began growing rock-sugar oranges ("Chu Orange") (born in 1928; some sources give 75, and this article takes about 74 while noting the discrepancy in basis). This article emphasizes: the Chu Shijian case was an unlawful matter concerning a particular individual in a particular historical period—an individual case that does not represent Yuxi's tobacco industry, still less the city of Yuxi or its people.

Mining, Metallurgy, and Steel

• Yuxi statistical communiqués and news reports—Dahongshan Iron Mine, Yuxi Mining, pig-iron output of about 5.106 million tonnes; private steel enterprises such as Yukun Iron & Steel and Xianfu Steel; the investment of about 21.2 billion yuan in Yukun Iron & Steel's related capacity-upgrade/relocation project (per news reports, with specifics subject to enterprise disclosure).

New-Energy Batteries

• Company announcements and news reports of Yunnan Energy New Material / Semcorp (002812)—headquartered in Yuxi, Yunnan; the Li Xiaoming family; the world's largest supplier of wet-process lithium-battery separators; the Yuxi separator project with a total investment of about 4.5 billion yuan (about 2.4 billion yuan for phase one and about 2.1 billion yuan for phase two), a planned 16 production lines, total capacity on the order of about 1.6 billion square meters, phase one commissioned by the end of 2024, and all eight production lines fully connected around March 2026; and a layout in sulfide solid-state electrolytes (on the order of about 1,000 tonnes/year, with investment on the order of about 2.5 billion yuan).
• Company announcements and news reports of Yuntianhua (600096), EVE Energy, Huayou, and others—the "four parties" behind Yuxi's 100-billion-yuan new-energy battery cluster (Semcorp + Yuntianhua + EVE Energy + Huayou); capacities such as about 120,000 tonnes of cathode materials and about 40,000 tonnes of anode materials; phase-one and phase-two project investment of about 51.7 billion yuan, with a phase-three target of "exceeding 100 billion yuan."
• Note: Much of the data related to the 100-billion-yuan new-energy battery cluster is on a "planning/commitment" basis rather than accomplished results, a distinction this article has repeatedly stressed between "plan" and "reality"; the actual investment, capacity, and commissioning years for each enterprise in Yuxi are subject to the latest disclosures. Special note: Upon verification, Huasun New Energy's (heterojunction photovoltaics) bases are in Xuancheng/Hefei/Dali and elsewhere, and Shanshan's integrated anode base is in Anning, Kunming—neither is in Yuxi—so this article does not list them as Yuxi enterprises.

Plateau-Characteristic Agriculture

• Yuxi municipal agriculture and rural affairs authorities and news reports—Tonghai vegetable output on the order of about 915,000 tonnes, accounting for more than one-third of Yunnan's total agricultural-product exports; Huaning citrus; green agriculture in the Fuxian Lake basin.
• Authoritative media reports—the brand legend of "Chu Orange" (the rock-sugar oranges Chu Shijian grew in his later years in the Ailao Mountains of Xinping County).

Urban Character

• Public materials—Nie Er (composer of the national anthem, March of the Volunteers) had ancestral roots in Yuxi and was born in Kunming; the Chengjiang Fossil Site was inscribed on the World Heritage List in 2012 (China's first fossil-type World Natural Heritage site); Fuxian Lake (one of China's largest deep-water freshwater lakes).

Note: The data in this article are current as of July 2026. Yuxi's industry involves multiple sources—official statistical communiqués, government portals, industry media, and listed-company announcements—and some data (such as the planned investment and capacity of the new-energy battery cluster, enterprises' progress on the ground, and historical details related to Chu Shijian) involve differences in statistical basis, are of a planning nature, or require secondary verification; this article has noted these at the relevant points and has, as far as possible, adopted official statistical bases and presented figures side by side. All expressions such as "planned," "target," "exceed," and "strive for" denote planned or expected values rather than accomplished results. Statements concerning historically sensitive events are, without exception, based on official conclusions and judicial rulings—objective and neutral, treating achievements and faults separately, and not generalizing from a single case. This article aims to provide an overall analytical framework for Yuxi's "second venture after the cigarette," rather than precise assertions of each individual figure.

—— Tianxia Gongchang Industrial Research Institute