Beijing opens its chequebook for rich and restive Xinjiang

Heavy government spending helped the Xinjiang economy grow 8per cent last year, offsetting the impact of the worst ethnic violence for 12 years but still the slowest expansion in a decade.

The regional government announced GDP of 427 billion yuan (HK$485.66 billion) for 2009. Exports of farm goods rose 46 per cent to US$939 million, while average farm income increased 14 per cent to 4,000 yuan.

That marks the lowest increase in GDP since 1999, when it rose by 7.6per cent. Since then, the annual rate averaged 10 per cent, peaking at 13 per cent in 2007, mainly because of the Go-West campaign launched by the government in 1999 which raised investment in central and western China. It compares with a national GDP growth in 2009 of 8.7 per cent.

Last July witnessed the worst inter-ethnic violence in Xinjiang since a confrontation in Yining in 1997. According to official figures, the Urumqi clashes left 197 people dead and 1,721 injured. A Uygur group put the figures significantly higher.

The violence devastated the region's tourist industry. It also influenced inward investment by foreign and domestic firms.

Beijing's response to the violence has been to accelerate its basic policies in the region - state spending and heavy security: the open chequebook and the iron fist.