Xinjiang has become China's most promising region for border trade. Trading towns are springing up along the region's 5,400km border with eight countries: Afghanistan, India, Kazakhstan, Kyrgyzstan, Mongolia, Pakistan, Russia and Tajikistan.
In 1991, Xinjiang-Soviet Union border trade was valued at just US$59m. By 1999 the equivalent total had risen to US$1bn, representing 57 percent of Xinjiang's total foreign trade.
Xinjiang's border trade is second among all provinces and regions in China. Exports consist mainly of chemical products, electronic equipment, foodstuffs, garments, hats, shoes and textiles. Only the Heilongjiang-Russia border is more active, turning in a trade figure last year of US$1.45bn.
The region's overall economy is improving. Foreign investment in the first half of 2000 was up 70 percent to US$10.7m. Total exports climbed 50 percent in the first five months of 2000, with cotton comprising 41 percent of the amount. Recognising the promising foreign trade potential, China is building two cross-border railways in Xinjiang. One will link southern Xinjiang with Kyrgyzstan and Uzbekistan, while the other will connect the northern cities of Yining and Horgos with Kazakhstan.
Barktu, one of the smaller ports, is fast building up an export trade in meat, fruit and vegetables, and has handled 115,000 tonnes of cargo since 1993. The port was closed for eight months in 1999.
Several of these border ports have collectively opened a trading centre in Almaty, the capital of Kazakhstan, a city well positioned to distribute goods to central Asia, Russia and Europe. The Yalian China Commercial and Trade Centre is sponsored by the Urumqi Yalian Trade Company, and has the backing of China's Ministry of Foreign Trade and Economic Cooperation. This is the first large commercial centre that China has so far opened in central Asia.
Just as in other border areas, smuggling is a serious problem for the local authorities. This is a far-flung region in the far west of China with vast, thinly manned border regions. Apart from routine security problems, drugs are openly trafficked and criminals can cross the borders with relatively little difficulty.
Moreover, with a higher percentage of Muslims than any other region in China, Xinjiang has to cope with infiltration from increasingly militant Islamic separatists from Afghanistan, Kazakhstan, Kyrgyzstan, Mongolia, Pakistan and Tajikistan.
These conditions account for a huge military presence. In the old days, soldiers patrolled the region on horseback. However, the People's Liberation Army has invested millions of yuan to develop an automated patrolling system. Today's soldiers now patrol in cars equipped with the latest high-tech gear, including computers, global positioning system devices and video cameras. Local border troops are connected with a national PLA information network centre.
Scope for local influence
However, all this increase in investment has given senior service personnel the scope for wealth and local influence. So many uncovered smuggling operations have been found to involve the militarily, that President Jiang Zemin has ordered senior officers to retire from any involvement in companies and to be held responsible for the misdoings of their subordinates.
Prime Minister Zhu Rongji announced shortly afterwards that a special anti-smuggling police force would be sent to the Xinjiang border, and all fines and proceeds earned from smuggled goods would be handed over to central government. This move, he said, would stop the money and contraband goods from being recycled by dishonest customs officers, servicemen and judges.
Of all money collected, 30 percent would be kept by the Beijing exchequer; 50 percent would be used to equip local anti-smuggling departments and reward those helping to overcome the problem; while the remaining 20 percent would go to helping the Xinjiang government tackle the problem.
Official border ports
The Beijing government has designated 15 official border ports, including Barktu, Bole, Horgos, Paketu, Tacheng, Yining, and the provincial capital of Urumqi. Not all these border towns, including Urumqi, are actually located on the border.
Horgos is the most cosmopolitan and fastest growing of the main border ports, yet only nine years ago it was a highly-sensitive and heavily-fortified military zone monitoring the movements of a Soviet army massed across the border in modern-day Kazakhstan. In fact, fears over security meant that official trading was banned all along Xinjiang's border with the Soviet Union until the Soviet break-up in 1991. Yet by 1997 it was estimated 30,000 traders from the CIS were visiting Horgos annually, a figure that had risen to some 50,000 traders last year.