Xinjiang and its potential for the Belt and Road Initiative

By: News Desk      Published: 04:34 PM, 1 Sep, 2020
Xinjiang and its potential for the Belt and Road Initiative

Shafei Moiz Hali

The Belt and Road Initiative (BRI) is an epic programme of the People’s Republic of China (PRC) which aims at connecting three continents (Asia, Africa & Europe) via land and sea routes. The land and sea routes form six corridors and forecasts predict a surge in economic activities along these routes leading to increased trade and economic prosperity among the connected regions. Connecting three continents via six corridors is a massive undertaking which demands substantial investments. Historically the Chinese people are no stranger to massive undertakings and the construction of the Great Wall of China provides testimony of the Chinese resolve. So far investments to the tune of $1 trillion are being invested across the BRI, principally for infrastructure development which includes development of modern mega sea-ports, road ways, railways, airports, and power plants along with telecommunications networks systems.

With the global economy taking massive hits in the recent past, firstly due to the 2008 global financial crisis and now by the COVID-19 pandemic, the BRI’s promise is gaining a lot of traction among countries. The ever-increasing interest of countries in the BRI keeps changing the scope of the BRI and so far 70 countries have partnered with the BRI. Statistics from China’s ministry of commerce highlight that partner countries of the BRI have started receiving massive investments for BRI projects which account for roughly 12% of the total foreign direct investments received by BRI partner countries. The statistics from the Chinese ministry of commerce also reveal that a total of 12,500 new BRI infrastructure developments contracts worth $279 billion have been signed.

Within China, the Xinjiang province is being developed as one of the foundations for the BRI and will be an economic hub for the BRI, as it did in ancient times for the Silk Road. In ancient times, the Silk Road came out of Gansu Corridor into Xinjiang, it broke into three main routes: southern, central, and northern routes. The southern route ran west along the northern foot of Kunlun Mountains and went through Ruoqiang County, Minfeng County, and Hotan area, reaching Kashgar. Then, it went over the Pamir Plateau and reached India or passed through Afghanistan and Central Asia to reach the coast of the Mediterranean Sea or Arabian Sea. The central route ran along the southern foot of the Tianshan Mountain range through Loulan of Ruoqiang County, Korla City, and so on and then across the Pamir Plateau reach to Russia. The northern route ran along the northern foot of the Tianshan Mountain range. It started at Hami County and went through Turpan, Urumqi, and the Ili River Valley, reaching the area along the Black Sea. It is because of this reason the people of Xinjiang province have cultural ties to various regions outside China and quickly adapt to change.  

The New Eurasian Land Bridge (NELBEC) connecting Xinjiang province to Western Russia and then Europe. The China-Central Asia-West Asia Corridor (CCAWEC), which connects China’s Xinjiang province to Turkey via Central and West Asia. The China Pakistan Economic Corridor (CPEC) connects China’s Xinjiang province to the Arabian Sea while passing through Pakistan

Post China’s economic reforms in 1979 the economic growth in China started to rise exponentially and this trend of high economic growth figures kept steadily rising for more than two decades which resulted in obvious wealth disparity between the eastern parts of China and the western landlocked parts of China. Experts also pointed that, this growth cannot be sustained which is why after careful planning in 2013 President Xi Jinping announced his policy for the initiation of the BRI, the main aim of the BRI was to create trade bridges and corridors for the western landlocked underdeveloped parts of China and bring economic prosperity not only for China’s under developed regions but also for the BRI partner countries.

Under the umbrella of the BRI domestic and foreign financial institutions have been pouring into Northwest China's Xinjiang Uyghur Autonomous Region, looking for opportunities under China's BRI. Experts say that there are abundant opportunities in the infrastructure sector, as major investment is planned, and that will attract even more companies into Xinjiang.  Xinjiang is the starting point of the CPEC, which links the region with the Gwadar port in Pakistan. The CPEC is estimated to draw infrastructure investment of $45 billion. The foreign trade volume between Northwest China's Xinjiang Uygur Autonomous Region and countries along the BRI totalled about $43 billion in 2018, up 13.5 percent year-on-year. The figure accounted for 98.2 percent of the total foreign trade through the region's ports last year. The export to the countries along the BRI totalled US $ 22 billion, up 0.7 percent, while the import from these countries reached US $20 billion, marking a significant increase of 31.7 percent from the previous year. Statistics from the customs showed that Russia and Central Asian countries were the major trade partners of Xinjiang. Among these countries, Kazakhstan recorded the most foreign trade volume of US $15 billion with the region, followed by Russia at US $8.9 billion. In addition, Xinjiang has also seen the foreign trade growth rates more than doubled with some European countries, including Armenia, Spain, the Czech Republic, Slovakia, Hungary and Bulgaria.

The project covers two parts. The first is called the “Silk Road Economic Belt,” which is primarily land-based and is expected to connect China with Central Asia, Eastern Europe, and Western Europe. The second is called the “21st Century Maritime Silk Road,” which is sea-based and is expected to link China’s southern coast to the Mediterranean, Africa, South-East Asia, and Central Asia. The Bangladesh-China-India-Myanmar Corridor, which connects Southern China to India via Bangladesh and Myanmar.

Xinjiang province is rich in natural resources and has mineral wealth, great potential for energy production and livestock farming. Geological surveys of the region point out that roughly 122 types of minerals are found in Xinjiang province. Several of these minerals have significantly large deposits. These include beryllium which is used in various industries like; Radiation Windows, Mechanical parts, mirrors, defence industry, telecom infrastructure, nuclear plants, magnetic parts, electronics, and for making alloys for the healthcare sector. Xinjiang Xinxin Mining Industry Co., Ltd. Is listed globally among the top 15 companies producing Beryllium.  Muscovite is also abundant in the Xinjiang province and China is the world’s largest exporter of Mica which is derived from Muscovite and China roughly earned US$ 64 million in 2018 from mica exports. Natron saltpeter is also abundant in Xinjiang province and in ancient times it is through this region that the techniques of using saltpeter for meat curing spread. Potassium Nitrate comes from Natron saltpeter and it has a wide variety of uses ranging from making fertilizers, to rocket propellants to gunpowder. China exports Potassium Nitrate based fertilizers and in April 2020 the exports figures reached their highest level at $US 7.88 million and China is the overall 2nd largest exporter of Potassium nitrate and its exports in 2018 stood at $87.2M. Other large deposit minerals include serpentine and pottery clay. Iron is also abundant in Xinjiang with Known reserves of iron ore put at 730 million tons which is why Xinjiang BaYi Iron and Steel Co., Ltd is among China’s leading iron and steel producing units which earns roughly US$ 1 billion in revenues annually. Xinjiang also has scores of potential for solar power production as it receives an annual sunshine in the range of 2,600 to 3,400 hours. There are nine high wind power areas in Xinjiang located in the north and eastern parts of the province. Wind power reserves in Xinjiang are 960,000 MW theoretically, and 134,300 MW can be technically exploited.

Despite all the propaganda against China’s central government’s policies in Xinjiang province. The literacy rate in Xinjiang province is upwards of 95% which is higher than that of many developed regions of China in the east. There are roughly 12 universities in Xinjiang which is less than the average number of universities in other provinces and this number needs to be increased and more investment is required in higher education to equip the local population for the influx of economic opportunities to come following the launch of  BRI.

Since the launch of the BRI in 2013, Xinjiang has received a great deal of attention. Both the central government and the regional government have made Xinjiang a focal point of their BRI planning, which boosts the region's economy. From 1978 to 2018, Xinjiang has made great improvements in people's living standards. The GDP of Xinjiang increased from $0.5 billion to $168.6 billion and the per capita GDP increased from $45 to $7000. Tourism has become an important engine for high-quality development. In 2018 the number of domestic and international tourists in Xinjiang exceeded 150 million, an increase of more than 40%. Consequently, Xinjiang's companies are brimming with optimism about the initiative, but challenges also remain. The Xinjiang regional government's plan includes creating five centres, such as a regional transportation centre, a trade logistics centre, a financial centre and a regional medical centre. Although there have been improvements in recent years, particularly in northern Xinjiang, where the economy is generally better than in the region's southern areas, infrastructure such as roads and railways still need to be better connected. Though the literacy rate of Xinjiang is at power with the national average, higher education lags behind other areas of the country, which could drag on development of the local economy.

Dr Shafei Moiz Hali is a professor at the prestigious National Defence University and contributes to international journals regularly.