China’s Modernization Rush: Kashgar At Crossroads – Analysis


By Bhavna Singh

Kashgar acts as a pivot for Central Asian traders by hosting the biggest outdoor market in the world today. Every Sunday over 1, 50,000 traders from the Central Asian countries visit the market to exchange commodities with their Chinese counterparts. After being declared a Special Economic Zone (SEZ) in 2009 and the efforts made by the Chinese government of late, it is likely to evolve into a metropolitan hub with a thriving economy. In this context, the article explores the following: impact of the Central government led economic integration of Kashgar, how the residents are likely to cope with measures of the central government despite reservations and the growth of the city as a regional commercial hub.

Government Initiatives


In 2009, the Chinese government doled out a plan for development of ‘industrial enclaves’ in Kashgar which were to emulate the Shenzhen model. Through this, the government claimed to initiate leap-frog development by adhering to its basic ideas of “planning first, implement step by step, pay attention to the people’s livelihood and comprehensive development.” Consequently, the Shenzhen and Hong Kong enterprises signed an agreement worth US$ 3.706 billion for investments with Kashgar in 2011 and donated almost US$ 15 million with the twin-aim of helping local enterprises to expand and provide an additional employment to 30, 000 people.

Recently, the central government has decided to provide financial subsidies to the Kashgar SEZ from 2011 to 2015, exempt qualified enterprises from business income-tax, subsidize fixed-asset investment and offer government loans to qualified companies at discounted rates. The government also intends to give discounts to qualified farm product-processing enterprises and other labour intensive companies by reducing their power consumption and transportation fees. The investments in major infrastructure-facilities construction projects in the two zones, including the construction of the China-Kyrghyzstan-Uzbekistan railway and the China-Pakistan railway have increased. This is keeping in view the need for connectivity with its neighbouring states to allow better economic exchange.

The revival of this historically significant town also feeds into the efforts by Chinese central government to correct the economic imbalance created by its preferential policies in Xinjiang. Its role in maintaining Central Asian and South Asian stability or enhancing what China perceives to be its Eurasian strategy. Being the western most railway station in China, Kashgar connects the Central Asian region to the rest of China through the 488-km Kashgar-Hotan Railway, which was opened for freight traffic in December 2010 and for passenger traffic in June 2011.

There is a strong indication of this SEZ being extended to include several regions from Pakistan. This was indicated during Senator Talha Mehmood’s (the Chairman of Senate Standing Committee for the Interior of Pakistan) visit to Xinjiang to mark the 60th anniversary of diplomatic ties between China and Pakistan in November 2011. Feasibility studies on a railway line linking Kashgar and Pok are also under consideration as per the Joint Venture signed by China and Pakistan in November 2009. However, it is significant also to reflect on the flipside of these developments.

Asymmetrical Developments and Consequences

Asymmetrical economic development has led to strong resentment amongst the Uyghurs who form almost 50 per cent of Kashgar’s population. While most of the earlier trade products included Chinese silk, porcelain, spices, raisins, grapes, figs and almonds that were available locally, the Central government initiatives have led to change in the nature of products being traded presently. The traditional occupations are no longer as profitable as they used to be and the ethnic groups practicing other vocations have also had to relocate. New commercial opportunities have led to huge amount of migration into the city leading to widespread social tension. The manifestation of a ‘Western Shenzhen’ at a rapid pace has left many of the local inhabitants fuming over the nature of displacement and holding the state accountable for the destruction of their traditional culture. As the wealth shifts from one ethnic group to another and the traditional land to newly allotted holders, the social fabric of the region is under severe pressure.

The Road Ahead

While these developments will further the process of economic integration of the region, they also pose a significant challenge to the state by strengthening the linkages with the Muslim fundamentalist groups in the neighbouring countries. The residents of Kashgar are yet again faced with the dilemma of choosing between economic prosperity and preservation of their traditions. Conventionally, any society undergoing rapid economic development often faces deeper bifurcation given the accrual of wealth amongst some groups at the cost of others. Considering this, the argument amongst the locals on non-cooperation with the state needs to be taken with some caution.

However, as far as cultural deterioration is concerned the Chinese government needs to take the aspirations of the indigenous ethnic group into consideration. While the urban push might lead to loss of traditional occupations and means of livelihood, it also has the capacity to generate alternate means of survival which need to be adopted by these locals. The local communities need to utilize the opportunities provided by the revival, which is a much needed perspective to minimize the contravention between locals and the Government.

Bhavna Singh
Research Officer, CRP, IPCS
email: [email protected]


IPCS (Institute for Peace and Conflict Studies) conducts independent research on conventional and non-conventional security issues in the region and shares its findings with policy makers and the public. It provides a forum for discussion with the strategic community on strategic issues and strives to explore alternatives. Moreover, it works towards building capacity among young scholars for greater refinement of their analyses of South Asian security.

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