Middle Eastern Investors Eye Xinjiang Regional Development

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By Chris Devonshire-Ellismao-and-xinjiang3.jpg

Oct. 6 – The extensive plans to develop trade links between Xinjiang and Central Asia have led Middle Eastern investors to become interested in assisting China in opening up the region to global trade.

The stakes seem to be more than just about money. Moderate Islam has been under threat from insurgents in the region, preying largely on poverty and creating divisions within the Muslim Diaspora. To correct this, and at the same time lift millions of Muslims within the Central Asian regions out of poverty, are becoming a priority for governments from Ankara to the Middle East.

This suits China’s plans too since a stable Xinjiang Province will no longer be an issue for mainstream Muslim thinkers. Instead, there is the prospect of increased trade with China as road and rail links running into the region become convenient and increasingly attractive for all.

China’s main routes into Central Asia and Islam run through Kazakhstan, and the border crossing at Alashankou, some 400 kilometers west of the Xinjiang Provincial capital of Urumqi. From there, there are extensive highway and rail networks leading not just to Almaty, the commercial heart of Kazakhstan, but also to the Kazak oilfields at Aktobe. The pipeline is around 3000 kilometers long and processing taking place close to Urumqi while oil and gas are fed nationally to as far east as Shanghai.

Beijing’s view towards its Muslim neighbors has shifted. As it is faced with a Central Asia that could be a major source of energy for the foreseeable future, China needs a stable region. This includes stability for Afghanistan and northern Pakistan which have become breeding ground for much of the region’s terrorists.

While it is true that many of these are long running disputes, a new theory dictates that trade is the answer to problems born out of poverty and a lack of education. China is being more pragmatic over religion as Islam is no longer seen as the threat of instability in Xinjiang. It is poverty that is the target. The shift sits well with the general feeling of Islamic development, especially in the Middle East, a region whose oil and trade China both have set its sights on.

The possibility of Central Asia opening up to global trade is a dream because of the region’s wealth in natural resources and exquisite culture. China, fresh its success of engineering a rail route through to Lhasa, is now ready to use those technical skills to develop a railway far beyond its current western most terminus at Kashgar.

Feasibility studies are being carried out to extend that line from Kashgar to Gilgit, Pakistan and to Bishkek, Krygyzstan. Such moves would connect China rail to networks as far away as Tehran and Moscow. Plans are also being made to develop a commercially viable highway between Taxkorgan, south of Kashgar, over the Pamirs, through the Hindu Kush and direct to Kabul. With trade and the real prospect of development, regional disputes may well calm down. This poses an attractive prospect both for China’s interests and for Islamic scholars, when at last they will be able to reach out and properly educate more moderate type of Islamic creed.

The interest in assisting China with this long term strategy is gaining momentum. Hong Kong is already considering changes in its tax base to assist Islamic finance. The Bank Muscat, the largest lender in Oman, has publicly expressed a desire to invest in mainland banks.

With the Xinjiang region ethically closer to Central Asia and the Middle East, an upsurge in Arabic and Central Asian investment in China, more so in the Xinjiang Province is to be expected.

This article was aggregated from the forthcoming China Briefing Regional Guide to the West China, which will be available after the National October Holidays, priced at US$25 plus p&p. The book details the provinces of Gansu, Ningxia, Shaanxi, Sichuan, Qinghai, Tibet, Xinjiang and Yunnan, and the West China cities of Chengdu, Chongqing, Kashgar, Kunming, Lanzhou, Lhasa, Guiyang, Urumqi, Xining and Yinchuan.

Pre-publication orders can be made through sales@china-briefing.com.Inquiries or assistance with investment in Xinjiang can be directed to Dezan Shira & Associates at info@dezshira.com.

Photo of the Kurban Tulum and Chairman Mao Zedong Monument, Unity Square, Hotan, Xinjiang courtesy of the centralasiatraveler.