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THE song Xinjiang Is a GoodPlace is well known in China.Despite its geographic advan-tage of being a part of the NewEurasian Continental Bridge that runsthrough Asia and Europe and home tothe most important section of the Old SilkRoad, Xinjiang is still widely regarded asbeautiful and culturally rich but economi-cally backward.
The region was important in China'seconomic past. About 5,000 of the OldSilk Road's %000 kilometers lie in Xin-jiang. It is home to several ethnic groupswith a number of religious traditions,such as Buddhism, Islam, the EasternOrthodox Church, and Taoism. With somany historical sites and a spectaculararray of natural scenery including desertsand oases, snow mountains, and grass-lands, Xinjiang is an appealing touristdestination.
However, the region has much moreto offer. Today's Xinjiang Uygur Autono-mous Region has become a paradise forinvestors and is a new driving force inChina's economic growth. In early JulyChina Today journalists visited some pre-fectures and cities of Xinjiang, includingIli Kazalth Autonomous Prefecture, BoleCity, and Urumqi, where we sensed a pas-sion for investment as intense as the localtemperature. Boosted by China's WesternDevelopment Strategy and the utilizationof its abundant natural resources and geo-graphic advantage, Xinjiang is yet againbuilding itself up into a trade, businessand logistical center and becoming an im-portant bridge between China and CentralAsia, West Asia, South Asia, and Europe.
Xinjiang is benefiting greatly fl'om thisdevelopment. In 2010, its GDP exceededRMB 50o billion (US $77.4 billion) forthe first time, increasing 20.6 percent overthe previous year. Its per capita GDP sur-passed US $3,000 to hit US $3,690. Allthese figures indicate that Xinjiang is onthe fast lane for development.
Abundant Resources
Covering an area of 1.66 millionsquare kilometers, Xinjiang is the larg-est province-level region of China andaccounts for about one sixth of the coun-try's total territory. It is one of the fewregions in China that hold a relativelyrich quantity and variety of mineral re-sources. So far a total of 138 mineralshave been discovered in Xinjiang, five ofwhich rank No. 1 and 25 rank among thetop five in the country in term of reservevolume, while the Turpan-Hami Basinand Junggar Basin, both located in Xin-jiang, have been listed as the world's topten largest coal fields.
Petroleum and petrochemicals, coalpower and coal chemicals, and nonferrousmetals underpin its dominant industries,and make it ideal for investment. In 2010its output of crude oil was the fourthlargest in the country, standing at 25.58million tons. Xinjiang's oil, natural gas,and coal make up 30, 34, and 40 percentof China's onshore reserves, standing at30 billion tons, 10.8 trillion cubic meters,and 2.19 trillion tons respectively. Thisrichness in mineral resources also feeds into the development of local second-ary and tertiary industries, such as steel,building materials, construction, equip-ment manufacturing, clothing, tourism,information and logistics.
Moreover, with its ideal soil conditions,water resources, abundant sunlight andheat, and the efforts made to industrializeagriculture in recent years, Xinjiang hasgradually built an agricultural develop-ment model adapted to local conditions.Today's Xinjiang has become one ofChina's major cotton production bases, its21.9 million mu (15 mu equals to 1 hect-are) of land produces 2.47 million tonsof cotton, making up 41 percent of thenational total. Its fine wool production ac-counts for over one-third of the country'stotal, its sugar beet production has hit 4.86million tons, ranking it first nationwide,and its output of Chinese wolfberry andhops account for 50 and 70 percent re-spectively of the country's total.
Because the fruits produced in Xinjiangare rarely damaged by insects, pesticidesare used sparingly, reducing costs andmaking them very popular among con-sumers who are pursuing an affordablegreen lifestyle. Notably, Xinjiang's tomatooutput has hit a staggering 9.7 milliontons. Its production of tomato productsrepresents 70 percent of the country'stotal and 9o percent of the country's totaltomato exports. Its export volume enjoysa 25-percent share of the world marketand a 9o-percent share of the Europeanmarket.
With so many agric,ultural productsbeing grown in the region, Xinjiang's tex-tile and agricultural products processingindustries are ripe for investment.
Xinjiang's development of renewableenergy sources promises to make it fa-mous for wind and solar energy as well.These sources provide power to the Xinji-aug and Northwest China power grids andhave the potential to attract a great dealmore investment.
Geographical Advantages
Together with other five Central Asiancountries, Xinjiang is at the heart of theEurasian Continent and its economiccrossroads. It borders Mongolia, Russia,Kazakhstan, Kyrgyzstan, Tajikistan, Af-ghanistan, Pakistan and India, and enjoysthe advantage of being a gateway betweenChina and Central Asia, South Asia, WestAsia, Russia, and Europe.
With the implementation of the West-ern Development Strategy, Xinjiang hasgrown into an important gate for China'seconomic opening-up. Currently Xinjianghas 29 customs portals and a thrivingborder trade. The local government hasset up five national development zones,three border economic cooperation zones,one export processing zone and one com-prehensive bonded area. It has launchedtrade cooperation with 167 countries andregions.
Xinjiang enjoys convenient transpor-tation by land and air. Xingjiang is con-nected by rail to the major cites of Europeand China's coastal areas via the SecondEurasian Continental Bridge that runsright through it. Augmenting this is a net- work of eight national highways and 75provincial highways, connecting Xinjiangto Gansu and Qinghai in the east, Tibet inthe south, and Central and Western Asiancountries in the west. Xinjiang has 16 civilairports and airline network capacity thatlinks it with a2 international cities in 11countries and 48 domestic cities. Xinjiangis now the region in China with the mostairports and the longest air routes. Itscomplete transportation system makes itconvenient for both cargo and passengertransportation.
Because of its strategic location, theWest-East Natural Gas TransmissionPipeline and the Sino-Kazakhstan oilpipeline both pass through Xinjiang.
At Alataw Pass Port in Bole City, whosevolume of transit cargo via highwaysranks second in the country, and viarailway ranks first in the country, ChinaToday saw a bustling railway and a newtransshipment station built with privateinvestment. According to Cao Peiyi, whois in charge of the customhouse, the vol-ume of transit cargo through Alataw hasbeen rising steadily. The volume in 2010exceeded 15 million tons and it surpassedManzhouli, which had the largest volumeof transit cargo, during the first half of2011. It is estimated that the volume oftransit cargo through Alataw will hold theNo.1 position for the next 10 years.
In order to take further advantage ofits superior location and ease the pres-sure of the busy transportation, a bondedarea has been established at Alataw Pass.Products from factories in the zone enjoya tax exemption when selling to CentralAsia, Europe and the domestic market.In the bonded zone, China Today sawXinjiaug Horizon Company busy grind-ing scrap iron imported from Central Asiainto powder, which would be sold to steelplants in China's interior areas.
At Korgas Port in Ili Kazakh Autono-mous Prefecture, the largest highway portin the northwest border area, there arealready many hotels, and more hotels andconference and exhibition centers are un-der construction to meet the demand offoreign and domestic traders for businessmeetings.
Once an order has been placed, somebusinessmen prefer to set up factoriesdirectly in Xinjiang to save on transpor-tation costs. In Ili Kazakh AutonomousPrefecture, a visit to Yining Border Eco-nomic Cooperation Zone and HuochengQingshuihe Industrial Park reveals thatforeign and domestic investors have set upfactories producing goods that are in shortsupply in Central Asia, such as buildingmaterials and everyday necessities. Theenterprises process vegetables and fruitsto sell to Central Asia, and exploit localresources such as coal, to produce finechemicals and coal gas for China's interior.
Policies for Development
In Ganhezi Town, under the jurisdic-tion of Fukang City in Urumqi, there is aShanxi-run industrial park that housesseven enterprises. A relatively completeindustrial chain has been formed in the park, where enterprises engage in coalwashing, eoking, casting and making con-struetion materials.
"Xinjiang has a good environment forinvestment, and it is a good decision tocome here," Li Yongping said with fervor.Li previously ran a coal mining companyand a transportation company in Shanxi.However, in 2003 the highly competitivemarket led him to Xinjiang to seek newdevelopments. Here his company enjoyedfive-year income tax exemption from thestart of production and the local govern-ment offered a subsidy to cover tax col-lected by the central government, savingLi at least RMB 10 million.
As an autonomous region in westernChina, Xinjiang enjoys preferential poli-cies stipulated in the Western Develop-ment Strategy. Enterprises coming fromoutside of Xinjiang enjoy a corporateincome tax rate 50 percent lower thanthat in central and eastern regions whenthey invest in industries encouraged bythe state, and in infrastructure such astransportation, power supply, water con-servaney, postal services, and radio andtelevision broadcasting. They also enjoya land compensation exemption whendeveloping unused state-owned land.Furthermore, if they invest in commercialprojects in western China, they enjoy op-eration rights ten years longer and a mini-mum registered capital requirement RMB2o million lower than in eastern regions.
On March 29, 2010, a national confer-ence on partner assistance to Xinjiangwas held, requiring 18 more prosperousprovinces and municipalities and the Chi-na National Petroleum Corporation to as-sist 92 counties and county-level cities inXinjiang as well as 12 divisions of the Xin-jiang Production and Construction Corpsof the Chinese People's Liberation Army.Their responsibilities include one-on-one financial support worth three to sixpercent of their annual financial revenuesto assist construction and development ofthe region. In this way, a capital flow es-timated at tens of billions of yuan will bedirected to improving local infrastructureand standard of living.
Wuxi in Jiangsu Province andHuocheng County in Ili Kazakh Autono-mous Prefecture are one pair of part-ners in the aid program. In 2010, Wuxioffered financial support of RMB 120million which is close to its total annualfinancial revenue. The money has helpedlocal government improve the infrastruc-ture, including power and water sup-ply, sewage disposal, road construction,and construction of a vocational schooland a kindergarten.
After the Forum on the Work of Xin-jiang held by the Central Committee ofthe Communist Party of China and theState Council in May 2010, the centralgovernment introduced more policiessupporting Xinjiang's development, in-eluding lowering access requirementsto certain industries, setting up more eco-nomic zones, and approving preferentialtreatment in tax, land use, investment,finance, and imports and exports. With these new policies, investors are very like-ly to gain substantial profits in Xinjiang.
With support from the ceutral govern-ment, Kashi and Korgos in Xinjiang haveestablished special economic zones to re-ceive enterprises transferred from easternareas, explore local resources, and expandexports to Central Asia and Europe.In June 2010, the central governmentstarted to carry out a new policy onresources tax. Taxes on coal, etude oiland natural gas in Xinjiang are based onprice rather than output. This tax reformwill greatly increase revenue for the localgovernment and inject more capital intothe region's development.
The operation model in Korgos Inter-national Border Cooperation Center is aunique success. The Chinese governmentand the Kazakhstan government haveeach allocated a piece of land to makeup the Cooperation Center, and the twopieces of land have been connected with aspecial passageway. The State Council hasextended many preferential policies to thecenter like tax refunds and exemptions.This operation model has been appraisedby surrounding countries and they are allkeen to follow suit.
In 2on the central government decidedto upgrade the Urumqi Foreign EconomicRelations and Trade Fair to China-Asia-Europe Expo. This is yet another moveto boost Xinjiang's economic growth bybuilding multi-area cooperation betweenXinjiang and markets beyond its borders,and the Expo will show how much of agood place Xinjiang actually is.
The region was important in China'seconomic past. About 5,000 of the OldSilk Road's %000 kilometers lie in Xin-jiang. It is home to several ethnic groupswith a number of religious traditions,such as Buddhism, Islam, the EasternOrthodox Church, and Taoism. With somany historical sites and a spectaculararray of natural scenery including desertsand oases, snow mountains, and grass-lands, Xinjiang is an appealing touristdestination.
However, the region has much moreto offer. Today's Xinjiang Uygur Autono-mous Region has become a paradise forinvestors and is a new driving force inChina's economic growth. In early JulyChina Today journalists visited some pre-fectures and cities of Xinjiang, includingIli Kazalth Autonomous Prefecture, BoleCity, and Urumqi, where we sensed a pas-sion for investment as intense as the localtemperature. Boosted by China's WesternDevelopment Strategy and the utilizationof its abundant natural resources and geo-graphic advantage, Xinjiang is yet againbuilding itself up into a trade, businessand logistical center and becoming an im-portant bridge between China and CentralAsia, West Asia, South Asia, and Europe.
Xinjiang is benefiting greatly fl'om thisdevelopment. In 2010, its GDP exceededRMB 50o billion (US $77.4 billion) forthe first time, increasing 20.6 percent overthe previous year. Its per capita GDP sur-passed US $3,000 to hit US $3,690. Allthese figures indicate that Xinjiang is onthe fast lane for development.
Abundant Resources
Covering an area of 1.66 millionsquare kilometers, Xinjiang is the larg-est province-level region of China andaccounts for about one sixth of the coun-try's total territory. It is one of the fewregions in China that hold a relativelyrich quantity and variety of mineral re-sources. So far a total of 138 mineralshave been discovered in Xinjiang, five ofwhich rank No. 1 and 25 rank among thetop five in the country in term of reservevolume, while the Turpan-Hami Basinand Junggar Basin, both located in Xin-jiang, have been listed as the world's topten largest coal fields.
Petroleum and petrochemicals, coalpower and coal chemicals, and nonferrousmetals underpin its dominant industries,and make it ideal for investment. In 2010its output of crude oil was the fourthlargest in the country, standing at 25.58million tons. Xinjiang's oil, natural gas,and coal make up 30, 34, and 40 percentof China's onshore reserves, standing at30 billion tons, 10.8 trillion cubic meters,and 2.19 trillion tons respectively. Thisrichness in mineral resources also feeds into the development of local second-ary and tertiary industries, such as steel,building materials, construction, equip-ment manufacturing, clothing, tourism,information and logistics.
Moreover, with its ideal soil conditions,water resources, abundant sunlight andheat, and the efforts made to industrializeagriculture in recent years, Xinjiang hasgradually built an agricultural develop-ment model adapted to local conditions.Today's Xinjiang has become one ofChina's major cotton production bases, its21.9 million mu (15 mu equals to 1 hect-are) of land produces 2.47 million tonsof cotton, making up 41 percent of thenational total. Its fine wool production ac-counts for over one-third of the country'stotal, its sugar beet production has hit 4.86million tons, ranking it first nationwide,and its output of Chinese wolfberry andhops account for 50 and 70 percent re-spectively of the country's total.
Because the fruits produced in Xinjiangare rarely damaged by insects, pesticidesare used sparingly, reducing costs andmaking them very popular among con-sumers who are pursuing an affordablegreen lifestyle. Notably, Xinjiang's tomatooutput has hit a staggering 9.7 milliontons. Its production of tomato productsrepresents 70 percent of the country'stotal and 9o percent of the country's totaltomato exports. Its export volume enjoysa 25-percent share of the world marketand a 9o-percent share of the Europeanmarket.
With so many agric,ultural productsbeing grown in the region, Xinjiang's tex-tile and agricultural products processingindustries are ripe for investment.
Xinjiang's development of renewableenergy sources promises to make it fa-mous for wind and solar energy as well.These sources provide power to the Xinji-aug and Northwest China power grids andhave the potential to attract a great dealmore investment.
Geographical Advantages
Together with other five Central Asiancountries, Xinjiang is at the heart of theEurasian Continent and its economiccrossroads. It borders Mongolia, Russia,Kazakhstan, Kyrgyzstan, Tajikistan, Af-ghanistan, Pakistan and India, and enjoysthe advantage of being a gateway betweenChina and Central Asia, South Asia, WestAsia, Russia, and Europe.
With the implementation of the West-ern Development Strategy, Xinjiang hasgrown into an important gate for China'seconomic opening-up. Currently Xinjianghas 29 customs portals and a thrivingborder trade. The local government hasset up five national development zones,three border economic cooperation zones,one export processing zone and one com-prehensive bonded area. It has launchedtrade cooperation with 167 countries andregions.
Xinjiang enjoys convenient transpor-tation by land and air. Xingjiang is con-nected by rail to the major cites of Europeand China's coastal areas via the SecondEurasian Continental Bridge that runsright through it. Augmenting this is a net- work of eight national highways and 75provincial highways, connecting Xinjiangto Gansu and Qinghai in the east, Tibet inthe south, and Central and Western Asiancountries in the west. Xinjiang has 16 civilairports and airline network capacity thatlinks it with a2 international cities in 11countries and 48 domestic cities. Xinjiangis now the region in China with the mostairports and the longest air routes. Itscomplete transportation system makes itconvenient for both cargo and passengertransportation.
Because of its strategic location, theWest-East Natural Gas TransmissionPipeline and the Sino-Kazakhstan oilpipeline both pass through Xinjiang.
At Alataw Pass Port in Bole City, whosevolume of transit cargo via highwaysranks second in the country, and viarailway ranks first in the country, ChinaToday saw a bustling railway and a newtransshipment station built with privateinvestment. According to Cao Peiyi, whois in charge of the customhouse, the vol-ume of transit cargo through Alataw hasbeen rising steadily. The volume in 2010exceeded 15 million tons and it surpassedManzhouli, which had the largest volumeof transit cargo, during the first half of2011. It is estimated that the volume oftransit cargo through Alataw will hold theNo.1 position for the next 10 years.
In order to take further advantage ofits superior location and ease the pres-sure of the busy transportation, a bondedarea has been established at Alataw Pass.Products from factories in the zone enjoya tax exemption when selling to CentralAsia, Europe and the domestic market.In the bonded zone, China Today sawXinjiaug Horizon Company busy grind-ing scrap iron imported from Central Asiainto powder, which would be sold to steelplants in China's interior areas.
At Korgas Port in Ili Kazakh Autono-mous Prefecture, the largest highway portin the northwest border area, there arealready many hotels, and more hotels andconference and exhibition centers are un-der construction to meet the demand offoreign and domestic traders for businessmeetings.
Once an order has been placed, somebusinessmen prefer to set up factoriesdirectly in Xinjiang to save on transpor-tation costs. In Ili Kazakh AutonomousPrefecture, a visit to Yining Border Eco-nomic Cooperation Zone and HuochengQingshuihe Industrial Park reveals thatforeign and domestic investors have set upfactories producing goods that are in shortsupply in Central Asia, such as buildingmaterials and everyday necessities. Theenterprises process vegetables and fruitsto sell to Central Asia, and exploit localresources such as coal, to produce finechemicals and coal gas for China's interior.
Policies for Development
In Ganhezi Town, under the jurisdic-tion of Fukang City in Urumqi, there is aShanxi-run industrial park that housesseven enterprises. A relatively completeindustrial chain has been formed in the park, where enterprises engage in coalwashing, eoking, casting and making con-struetion materials.
"Xinjiang has a good environment forinvestment, and it is a good decision tocome here," Li Yongping said with fervor.Li previously ran a coal mining companyand a transportation company in Shanxi.However, in 2003 the highly competitivemarket led him to Xinjiang to seek newdevelopments. Here his company enjoyedfive-year income tax exemption from thestart of production and the local govern-ment offered a subsidy to cover tax col-lected by the central government, savingLi at least RMB 10 million.
As an autonomous region in westernChina, Xinjiang enjoys preferential poli-cies stipulated in the Western Develop-ment Strategy. Enterprises coming fromoutside of Xinjiang enjoy a corporateincome tax rate 50 percent lower thanthat in central and eastern regions whenthey invest in industries encouraged bythe state, and in infrastructure such astransportation, power supply, water con-servaney, postal services, and radio andtelevision broadcasting. They also enjoya land compensation exemption whendeveloping unused state-owned land.Furthermore, if they invest in commercialprojects in western China, they enjoy op-eration rights ten years longer and a mini-mum registered capital requirement RMB2o million lower than in eastern regions.
On March 29, 2010, a national confer-ence on partner assistance to Xinjiangwas held, requiring 18 more prosperousprovinces and municipalities and the Chi-na National Petroleum Corporation to as-sist 92 counties and county-level cities inXinjiang as well as 12 divisions of the Xin-jiang Production and Construction Corpsof the Chinese People's Liberation Army.Their responsibilities include one-on-one financial support worth three to sixpercent of their annual financial revenuesto assist construction and development ofthe region. In this way, a capital flow es-timated at tens of billions of yuan will bedirected to improving local infrastructureand standard of living.
Wuxi in Jiangsu Province andHuocheng County in Ili Kazakh Autono-mous Prefecture are one pair of part-ners in the aid program. In 2010, Wuxioffered financial support of RMB 120million which is close to its total annualfinancial revenue. The money has helpedlocal government improve the infrastruc-ture, including power and water sup-ply, sewage disposal, road construction,and construction of a vocational schooland a kindergarten.
After the Forum on the Work of Xin-jiang held by the Central Committee ofthe Communist Party of China and theState Council in May 2010, the centralgovernment introduced more policiessupporting Xinjiang's development, in-eluding lowering access requirementsto certain industries, setting up more eco-nomic zones, and approving preferentialtreatment in tax, land use, investment,finance, and imports and exports. With these new policies, investors are very like-ly to gain substantial profits in Xinjiang.
With support from the ceutral govern-ment, Kashi and Korgos in Xinjiang haveestablished special economic zones to re-ceive enterprises transferred from easternareas, explore local resources, and expandexports to Central Asia and Europe.In June 2010, the central governmentstarted to carry out a new policy onresources tax. Taxes on coal, etude oiland natural gas in Xinjiang are based onprice rather than output. This tax reformwill greatly increase revenue for the localgovernment and inject more capital intothe region's development.
The operation model in Korgos Inter-national Border Cooperation Center is aunique success. The Chinese governmentand the Kazakhstan government haveeach allocated a piece of land to makeup the Cooperation Center, and the twopieces of land have been connected with aspecial passageway. The State Council hasextended many preferential policies to thecenter like tax refunds and exemptions.This operation model has been appraisedby surrounding countries and they are allkeen to follow suit.
In 2on the central government decidedto upgrade the Urumqi Foreign EconomicRelations and Trade Fair to China-Asia-Europe Expo. This is yet another moveto boost Xinjiang's economic growth bybuilding multi-area cooperation betweenXinjiang and markets beyond its borders,and the Expo will show how much of agood place Xinjiang actually is.