Beijing sets out 10-year strategy to end poverty in Xinjiang

PUBLISHED : Friday, 21 May, 2010, 12:00am
UPDATED : Friday, 21 May, 2010, 12:00am

Beijing set out a plan yesterday to revive the far western region of Xinjiang in the hope that an economic boom will end incessant ethnic strife and begin a new round of development in the remote backwater.

At a conference chaired by President Hu Jintao and attended by top Communist Party officials that ended on Wednesday, the central government pledged to raise the per capita gross domestic product in Xinjiang to the national average by 2015, and eliminate poverty throughout the region by 2020.

Xinjiang's per capita GDP last year was US$2,898, compared with the national average of US$3,600, and ranked higher only than Inner Mongolia in China.

To achieve the goals, Premier Wen Jiabao announced that the much-anticipated fuel tax reform would be carried out in Xinjiang first. Beijing will double the amount of fixed-asset investment in the region in the next five years and offer tax breaks to a number of enterprises.

Under the new policies, the levy on oil and natural gas in the resource-rich region will be calculated according to their market prices instead of the production quantity, as was the policy in the past, Xinhua quoted Wen as saying.

That means the Xinjiang government's revenue from oil and natural gas production would increase substantially in the future. The revenue from the fuel tax is divided between the central and local governments.

Many Uygur activists had criticised the fuel taxation policy, which set the levy on every barrel of oil or cubic metre of natural gas that companies extracted from Xinjiang. The activists argued it amounted to robbing the region of its natural riches.

However, the old tax was set according to the market price in the 1980s, and with the prices for oil and gas soaring around the world, Xinjiang will benefit from the new policy.

'By reforming the fuel tax, we can increase [the Xinjiang government's] fiscal strength so that it will have resources to improve people's livelihoods. Resources exploration will directly benefit Xinjiang people,' Hu was quoted by Xinhua as saying.

Beijing is also prepared to flood the region with fresh capital.

'The central government will continue increasing our investment in Xinjiang,' Wen said.

'We encourage banks to set up branch offices in remote areas [of Xinjiang] and welcome foreign banks to open there. We will further free up land and market restrictions for businesses.

'China will focus the whole nation's resources to revive Xinjiang.'

More than 10 billion yuan (HK$11.4 billion) will be poured into the region from next year by the 19 provinces and cities in what is being described as the biggest investment drive in history.

Beijing alone will invest 7.2 billion yuan in the next five years and support the development of the Hotan area and a Xinjiang Production and Construction Corps farming unit.

The central government will also invest a sum several times the provincial contribution and offer other preferential policies.

Behind all of this is Beijing's determination to end ethnic strife in the restive region. Xinjiang was rocked by a spate of ethnic violence in the past two years that pitted the Uygur minority against the Han, who have become the majority there.

The central leadership is worried that lack of development in Xinjiang would turn the region into a hotbed for radicals - which could seriously threaten security and stability.

Critics overseas disagree with Beijing's premise, blaming the central government's religious and ethnic policies for the strife between Uygur and Han. Those policies, they argue, cannot be fixed simply by focusing attention on economic growth regardless of how much money is infused there.

'We must clearly realise this: Just as in other parts of China, the chief source of social conflicts in Xinjiang is rooted in the imbalance between people's [growing] desire for a better livelihood and the lack of development there,' Hu was quoted by Xinhua as saying.

'At the same time, there are still separatist movements in Xinjiang. This means we have to focus our Xinjiang strategy on raising people's livelihood and maintaining high stability and security,' he said.

Dilxadi Rexiti, a spokesman for the German-based East Turkestan Information Centre, said that while they welcomed economic development in Xinjiang, the new policy would mainly benefit the Han, who have a monopoly on access to resources and business.

He feared the new policies would set off a new wave of migration of Han into the region.

'The government said the meeting was convened after a wide-ranging consultation with the public, but actually a lot of Uygurs never knew such a meeting was held,' he said.