Yin	  Weiwen_51128231	
  

The Natural Resource Curse in Xinjiang

Abstract
Natural resource abundance may have political and economic consequences. Some argue thatnatural resource abundance can have a negative effect on democratic transition and theconsolidation of democracy, the so-called “natural resource curse” in political aspect. But themechanism through which natural resource stock leads to a less democratic regime with moreauthoritarian features is not yet fully clarified. In this paper I will use a case study about
Xinjiang to test my theory. That is, distributional inequality between Han Chinese and theethnic minorities over the resource revenue results in more resistance from the Uyghurs, thus
the government responds with stricter social control. This paper is aimed at offering both atheoretical creation and an explanation for the current instability in Xinjiang.

Key Words
Natural Resource Curse, Xinjiang, Uyghurs, Political Economy

	
  

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  Chapter I: Introduction

The Xinjiang Uyghur Autonomous Region has never been such a hot topic among scholars
and politicians as it is now. Though the Uyghur separatists have been asking forindependence ever since the Chinese Communists took the place in the late 1940s, and even
earlier, they could never gain so much sympathy and support from the western world as the
Tibetans have been enjoying. Xinjiang remained to be a relatively marginal topic for years,
while Tibetans studies continued to thrive in universities and colleges in the U.S. and Europe.
But things have changed after the collapse of the Soviet Union and the independence ofCentral Asian countries, and the bloody riots that caused hundreds of deaths on July 5, 2009
reminds us that Xinjiang should not be neglected anymore. Previously famous for its splendid
scenery and delicious fruits, the region is now one of the most dangerous places in China
under the threat of terrorist attacks. When President Xi Jinping was visiting Xinjiang andemphasizing a hardline policy against any terrorists and separatists in April 2014, he might
not have been expecting another terrorist attack in Urumqi, the capital of the region, soonafter he left the city. If someone is looking for any violent resistance that directly targets at
the rule of the Chinese Communists in this country, Xinjiang can hardly be excluded.

The Chinese Communist Party after the Cultural Revolution upholds a creed that economic
development is the best and final solution to all political and social problems, the so-called“Development is the Absolute Principle” (fazhan jiushi ying daoli). Contrast to theimpression that Xinjiang’s economy falls far behind from coastal areas, its economic
development has been very impressive since the 1990s. Oil and gas production is the pillar
industry of Xinjiang,1 and in the opinion of the authority and many people as well, it is
supposed to bring prosperity and stability to the region. Obviously this is not true. We can’t
help but wonder whether there are some political or economic consequences of resource
abundance and ongoing resource exploitation in Xinjiang.

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  

1	
   Xinjiang	
  Statistical	
  Bureau,	
  “Energy	  Industry	
  of	
  Xinjiang	
  is	
  Playing	
  a	
  More	  Important	
  Role	  in	
  National	
  Economy	
  [xinjiang	
  nengyuan	
  gongye	  zai	
  guomin	
  jingji	
  zhong	
  de	
  diwei	  tuxian],”	
  see:	  http://dss.gov.cn/Article_Print.asp?ArticleID=244017.	
  Last	  accessed:	
  April	  5th,	
  2014.	
  
	
  

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  Both economists and political scientists have been studying the so-called “natural resource
curse” for years, as they observe in many Middle Eastern and African countries that natural
resource may not necessarily be a good thing for political and economic development. The
second largest oil producing country in 2014, Saudi Arabia, along with her oil-rich neighbors,
cannot be counted as democracies, even when we follow the minimum standards for what
constitutes a democracy. The largest oil producer today, Russia, is more of a hybrid regime
than a mature democracy. Another resource-dependent country Nigeria is not only sufferingfrom political instability but also from economic downturn, high government debt rate,
poverty, pollution, etc., while its oil production reaches its peak. In the field of political
economy, the linkage that natural resource has a negative impact on either politicaldemocratization or economic growth, or to both simultaneously is conceptualized as the“natural resource curse”. If we are to find out whether natural resource also has some negative
effects in Xinjiang, the natural resource curse may serve as a good theoretical framework for
causal analysis. Of course, the author of this paper is not merely satisfied with application oftheories, but also hopes that an empirical case about Xinjiang can deepen our understanding
about the mechanism through which natural resource makes a difference to politics or
economic growth. As is demonstrated in the following parts, the causal mechanism of natural
resource curse is not yet clarified, because it cannot explain why outliers like Norway exist,
where natural resource abundance is more like a “blessing” than a curse.

This paper argues that the natural resource curse exists in Xinjiang. Following thisintroduction, the second chapter will provide a literature review about theories and empiricalstudies of natural resource curse. The third chapter of this article will begin with a brief
introduction to the contemporary politics, economy and society of the Xinjiang Uyghur
Autonomous Region, with a focus on Xinjiang’s energy development in recent years. I willthen employ the method of congruence procedures and process tracing to present a causal link
between resource abundance and authoritarian rule: natural resource abundance and resource
exploitation generate distributional inequality, since many Uyghurs youth who cannot speak
Mandarin Chinese fluently are disadvantaged in the job market; then the Uyghurs have an
	
  

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  incentive to challenge the current regime, by means of mass protests and violence, including
terrorist attack; the government responds with more repression, thus strengthening theauthoritarian rule. The conclusion chapter will offer some further discussions about theeconomic effect of resources and the possible solution to the resource curse in Xinjiang,
based on the causal link provided in Chapter Three.

	
  

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  Chapter II: Literature Review

A large body of scholarship has been studying the so-called “natural resource curse”. After
Mahdavy (1970) first raised the idea, much effort has been devoted to examining both thepolitical and economic consequences of natural resource abundance. Many economists andpolitical scientists observe that oil-rich countries tend to be less democratic, including Saudi
Arabia, Iran, and Nigeria. The seemingly plausible argument that the price of oil and the paceof freedom always move in opposite directions in oil-rich states is also named “The First Law
of Petropolitics” by Friedman (2006).2 But this is not the end of the story. As Haber suggests(2011), the view that natural resources and democracy do not go together is often coupledwith parallel literatures that find correlations between natural resources and slow economic
growth or the onset of civil wars; taken together, these literatures have given rise to thestylized fact that there is a “resource curse.” Therefore, in our discussion about natural
resource curse, neither the political dependent variable nor the economic dependent variable
should be neglected. In this paper I will first address the political effect of natural resource
abundance and postpone the discussion about economic effect till the last chapter, but it
doesn’t mean that the economic effect is a trivial matter in our case.

The traditional thought is that natural resource abundance has a negative effect on either
economic development, or political democratization, or both at the same time. In terms of thepolitical effect, Ross (2001) starts this stream of literature. He points out that there exist threecausal mechanisms through which oil does have anti-democratic effects: a “rentier effect,”which suggests that resource-rich governments use low tax rates and patronage to relievepressures for greater accountability; a “repression effect,” which argues that resource wealthretards democratization by enabling governments to boost their funding for internal security;
and a “modernization effect,” which holds that growth based on the export of oil and minerals
fails to bring about the social and cultural changes that tend to produce democratic

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  

2	
   Thomas	
  Friedman,	  “The	  First	  Law	  of	
  Petropolitics,”	
  see:	  http://www.foreignpolicy.com/articles/2006/04/25/the_first_law_of_petropolitics.	
  Last	  accessed	
  April	  5th,	
  2014.	
  
	
  

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  government. These social and cultural changes include occupational specialization,
urbanization, and higher level of education. He tests all these explanations and finds themrobust. Many other scholars also employ statistical methods to support such a curse effect.
For example, Jensen and Wantchekon (2004) wrote one of the most cited papers in this field,
and presented empirical evidence suggesting a robust and negative correlation between thepresence of a sizable natural resource sector and the level of democracy in Africa. One canalso find similar conclusions (though the explanations may be slightly varied) in Wantchekon(2002), Smith (2004), Goldberg et al. (2008), Norman (2009), Ross (2009), Aslaksen (2010),
Ramsay (2011), etc. Interestingly, Ross (2009) rejects two of the three explanations given in
Ross (2001) using improved empirical estimation strategies — only the “rentier effect”
remains plausible. In terms of the negative economic effect, one can also see Sachs andWarner (1995), Sala-i-Martin and Subramanian (2003), Collier and Goderis (2009).3 In
Sala-i-Martin and Subramanian (2003), three channels of natural resource abundance to lower
growth are raised, including institutional impact, fertility, and the famous notion of Dutch
Disease.4

However, in recent years, more and more empirical researches cast doubt on the traditional
thought. They believe that the negative effect of natural resource abundance does not exist, oreven that resource stock helps to promote democratization. Among this stream of literature,
Haber and Menaldo (2011) is worth mentioning in detail. They point out that previous
empirical tests that have been used to test the resource curse hypothesis do not tend to employ
time series–centric methods, nor specify counterfactual paths of political development; after
improving the estimation strategy, they find that increases in resource reliance are notassociated with authoritarianism. In fact, in many specifications they generate results that

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  

3	
   In	
  fact,	  the	
  economic	
  and	  political	
  effect	  is	
  not	  independent	
  from	  each	  other,	
  though	
  most	  literatures	
  focus	
  on	
  only	  one	  of	
  the	
  two	
  aspects.	
  As	
  Ross	  (2001)	
  indicates,	
  claims	
  about	  the	
  rentier	
  state	
  can	  be	
  sorted	
  into	  two	
  categories:	
  those	
  that	  suggest	
  oil	
  wealth	
  makes	
  states	
  less	  democratic	
  and	
  those	
  that	  suggest	
  oil	
  wealth	
  causes	  governments	
  to	
  do	
  a	
  poorer	  job	  of	
  promoting	
  economic	
  development.	
  Often	  the	
  two	  are	  conflated.	
  Bulte	
  and	
  Damania	
  (2008)	
  also	  find	  that	  the	
  main	  effect	  of	
  resource	
  abundance	
  on	
  growth	
  occurs	
  through	  interaction	
  with	  political	
  variables.	
   	
  
4	
   In	
  countries	
  suffering	
  from	  the	
  so-­‐called	
  Dutch	  Disease,	
  the	  resource	
  boom	  causes	
  an	
  overvaluation	
  of	
  the	
  domestic	
  currency	
  and	
  makes	
  imports	
  cheaper	
  and	
  nonmineral	
  exports	
  more	  expensive,	
  thus	  creating	
  structural	
  barriers	
  to	
  investment	
  in	
  nonmineral	
  tradable	
  goods	
  and	
  development	
  more	  generally.	
  Here	  I	
  use	  the	
  definition	
  given	
  by	  Goldberg	
  et	
  al.	  (2008).	
  
	
  

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  suggest a “resource blessing”. Similarly, Wacziarg (2012) finds strictly no evidence in favorof the so-called “First Law of Petropolitics”, using a variety of time series and panel data
methods over a wide range of country subsamples and time periods. While readers may
challenge their position by referring to countries suffering from the resource curse like
Nigeria, Haber and Menaldo (2011) respond in this way: this is not to say that there may not
be specific instances in which resource rents might have helped to sustain a dictatorship; it is
to say, however, that there is a big difference between pointing to these instances and making
sweeping, law-like statements. Scholars in this stream of literature claim that they are in the
direction to a correct causation, so as those who support the traditional thought.

The problem of these empirical researches is that they can only report the effect of natural
resource on average, but fail to explain why the resource curse occurs in certain countries
while resource blessing is dominant in others, like Norway. These countries’ varied paths
from resource wealth to political and economic outcomes suggest the need for conditional
theories of the resource curse (Dunning, 2005). As Dunning (2008) puts it in his classic book,there are indeed mechanisms through which resource wealth can promote the emergence or
persistence of authoritarian regimes; however, there are also mechanisms through which
resource wealth can promote democracy. He shows in his book that the claims that resources
promote authoritarianism and that they promote democracy are not mutually inconsistent.
Ross (2009) himself also agrees with Dunning at this point, and admits that the empiricalanalysis tells us something about the average effect that oil wealth has on democracy, but
surely the ultimate effect of oil wealth will vary under different conditions—and identifying
these conditions lies at the frontier of research on this problem. Obviously, large-n regression
is not a very useful method to identify such conditions. Therefore, we must also have a close
look at relevant propositions made by formal modelers, who have been contributing to ourunderstanding about the causal mechanisms.

In terms of the economic effect of resource abundance, some try to explore the mechanism ata micro-level, modeling the interaction in a resource-rich country between elites who benefit

	
  

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  most from resource (particularly oil and gas5) revenue, and challengers who do not. In Caselli
and Cunningham’s model (2009), the elite is the direct recipient of resource revenue and its
problem is how to allocate this revenue (and its energy) between its own enrichment,
activities that increase the elite’s chances of retaining power, and investments that canincrease the economy’s capacity to produce non-resource income. They suggest,“Broadly speaking, an increase in resource revenue affects the elite’s decision problem
through two main channels. First, since the elite is the direct recipient of the resource
revenue, an increase in that revenue increases the value of staying in power, and hence thereturn to activities and expenditures that shore up the elite’s political control. He thus
substitutes away from productive activities into activities that preserve him in power.
However, the vice of an increased desire to stay in power may easily turn into a social virtue
as well, because one way to increase one’s hold on power is to make citizens happy, i.e. toprovide plenty of opportunities in the private sector. The second main way a resource
windfall affects the leader’s problem is by increasing the likelihood that he will face achallenge for his political control.”

Similar to the first channel, the leader can choose to shift more resources into wastefulself-preservation schemes, or to invest more in the private sector in order to appease thechallengers. Facing such trade-off, it is not easy to predict the economic outcome without
specifying more conditions. Instead of leaders and challengers, Torvik (2002) focuses on the
behavior of entrepreneurs. In his model with rent seeking, “a greater amount of natural
resources increases the number of entrepreneurs engaged in rent seeking and reduces thenumber of entrepreneurs running productive firms. With a demand externality, it is shownthat the drop in income as a result of this is higher than the increase in income from thenatural resource.” More natural resources thus lead to lower social welfare.

One of the obvious drawbacks of the two models mentioned above is that they both fail to

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  

5	
   Ross	  (2001)	
  finds	
  that	  oil	
  and	
  other	  minerals	
  impede	
  democracy,	
  but	
  other	  primary	  commodities—which	
  generate	
  few	  or	
  no	
  rents,	
  produce	
  less	
  export	
  income	
  for	  the	
  state,	  and	
  employ	
  a	
  larger	
  fraction	
  of	
  the	
  labor	
  force—do	
  not.	
  
	
  

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  incorporate political factors in the causal analysis. When we are discussing the economic
effect of resources, political factors also matter.6 Treating regime type as an exogenous
variable — that is, to assume that resource abundance does not affect the survival or
consolidation of democracy, we can understand better why the economic effect is conditional.
For example, Damania and Bulte (2008) show why democracy (the existence of substantial
competition) can help to overcome the negative effect of resource abundance on economic
development. Their model identifies two key factors necessary for the resource curse
hypothesis to hold: the absence of effective political competition and a set of specifictechnological production relationships in both the resource and the non-resource sectors.
Based on the model, they predict that,“In autocratic regimes, resource endowments allow governments to extract greater surplus(bribes) by pursuing policies that are detrimental to growth. However, the desire to retain
power implies that these incentives are greatly attenuated when the regime faces strong
political opposition. Thus, in democratic regimes, the surpluses available from resource
endowments are more likely to be used in ways that promote welfare and growth.”

Similarly, the model of Robinson et al. (2006) that features an incumbent politician wishing
to be re-elected also implies that countries with institutions that promote accountability andstate competence will tend to benefit from resource booms since these institutions ameliorate
the perverse political incentives that such booms create, while countries without suchinstitutions may suffer from a resource curse.

However, people don’t find too much legitimacy in exogenizing regime type. In fact, morework has been done to show that resource stock also has an effect on the endurance of
democracy. Wantchekon (2002) shows that when the state institutions are weak so that budget
procedures either lack transparency or are discretionary, resource windfalls tend to generateand consolidate incumbency advantage in democratic elections; such an advantage could

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
6	
   Indeed,	
  as	
  we	
  mention	
  before,	
  it	
  is	
  difficult	
  to	
  separate	
  politics	
  with	  economy	
  in	
  the	  discussion	
  about	  the	  resource	
  curse.	
  
	
  

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  incite the opposition to resort to political violence in competing for political power, thereby
generating political instability and authoritarian governments. Caselli (2006) argues thatcountries with large amounts of natural resources experience power struggles, in the sensethat potential challengers have a stronger incentive to seek to replace the existing governmentby means of coup d’etats, or other forms of forced change in leadership. As a result, “thegreater probability of losing power to a successful challenger reduces the effective rate of
return to investing in the country’s development for the existing elite, and may induce them toundersupply human capital, infrastructure, contractual enforcement, and the rule of law.” In
terms of rule of law specifically, Norman (2009) presents a model of endogenous rule of law,and shows resource abundance, as distinct from a resource extraction intensive economy,
matters for rule of law, an important requirement for growth. He also provides empirical test
result to support his theory.

Models that explore the causation at a structural instead of micro level should not be
neglected either. Dunning (2008) develops a conceptual framework that not only highlights
elites-masses interaction, but also takes structural variables like resource dependency leveland public-private competition into consideration (see Figure 1). The variation between
Norway and Nigeria can be explained through such framework. Again and again Dunning(2008; 4) emphasizes “the claims that resources promote authoritarianism and that they
promote democracy are not mutually inconsistent — resource rents can promoteauthoritarianism or democracy, but they do so through different mechanisms.”

	
  

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  Figure 1
Source: Dunning (2008: 19)

These formal models are aimed at explaining why resource curse happens in some country
but not others, and they do contribute much to our understanding on this topic. However, it
doesn’t mean that students of petropolitics have nothing to do any more. First, I would argue
that treating leaders (or elites) as resource holder and the masses as challengers in thecompetition over resource revenue may result in a fallacy of oversimplification. In countries
enjoying resource blessing, leaders still enjoy much more than the masses. Drawing a sharp
line between leaders and masses may obfuscate who is the real challenger and who have the
incentive to rebel. As Rosser (2006) suggests, existing explanations for the resource curse do
not adequately account for the role of social forces or external political and economic
environments in shaping development outcomes in resource abundant countries. Among thesesocial forces or political environment, ethnic tension is an important intermediate variable.
For example, Sudan is marked by tribal strife over oil; and in Aceh, Indonesia, regional
separatism has been fanned by secrecy about oil payments and public misunderstanding about
their scale (Palley, 2003). If distributional inequality over resource revenue exists between
different ethnic groups, the negative effect of resource abundance may become much moresignificant. The second criticism against these deductive models (and also formal models
used widely in many other topics) is that although they are always perfectly self-consistent,
	
  

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  empirical support is far from sufficient. Therefore, in this paper I will not only incorporate
ethnic tension in the theoretical framework but also try to provide an empirical case to present
the observable causal process.7

A case study about Xinjiang would be intellectually beneficial. In order to “test” a theory byusing the method of case study when we have only one case at hand, “congruence procedures”
and “process tracing” are needed. When using congruence procedures, the investigator
explores the case looking for congruence or incongruence between values observed on the
independent and dependent variable and values predicted by the test hypothesis (Van Evera,
1997: 58-63). For example, in our case, if distributional inequality over resource revenue truly
causes more resistance from the Uyghurs and the government responds with more repression
as our hypothesis predicts, we should observe the increase, or at least, variance in these key
variables: resource production, distributional inequality, minority resistance (measured by thefrequency of mass protests and terrorist attack, etc.), and government repression (using
proxies like security budget, Internet access control, etc.).8 However, correlation is different
from causality. We should also present how these variables are connected with each other,and that’s why process tracing is needed. In process tracing, the investigator explores thechain of events or the decision-making process by which initial case conditions are translated
into case outcomes (Van Evera, 1997: 64). Therefore, in our case we should present how
resource abundance in Xinjiang leads to a strengthened authoritarian regime step by step.9

Some may also criticize that Xinjiang—a provincial unit but not a nation—is not a proper

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  

7	
   Some	
  people	
  may	
  argue	
  that	  a	
  single	
  case	  is	
  not	
  enough	
  for	
  “testing”	
  the	  theory,	
  see	
  King	
  et	
  al.	  (1994).	
  For	  the	
  defense	
  of	
  the	
  validity	
  of	
  within	
  case	  analysis	
  in	
  causal	
  inference,	
  see	  Bardy	
  and	  Collier	
  Eds.	
  (2010:	
  205-­‐243).	
  The	
  ample	  evidence	
  in	
  the	
  causal	
  link	  of	
  this	
  paper	
  can	  serve	
  as	
  “smoking	
  gun	
  evidence”.	
  See	
  (Van	  Evera,	
  1997:	
  31; Bardy	
  and	  Collier	
  Eds.,	
  2010:	
  210-­‐219).	
  8	
   Of	
  course,	
  Xinjiang	
  is	
  a	
  special	
  case,	  and	
  some	  of	
  the	
  measurements	
  mentioned	
  above	
  may	
  work	  in	
  a	
  quite	  counter-­‐intuitive	
  way,	
  which	  I	
  will	  elaborate	
  more	  below.	
  9	
   In	
  Jensen	
  and	
  Wantchekon	
  (2004),	
  the	
  authors	
  argue	
  that	  executive	  discretion	
  over	  resource	
  rents	
  leads	
  to	
  both	  less	  political	
  liberalization	
  (transition	
  of	
  democracy)	
  and	  a	
  greater	
  likelihood	
  of	
  democratic	
  breakdown	
  (consolidation	
  of	
  democracy).	
  They	  use	
  various	
  “proxies”	
  to	
  measure	
  different	
  dependent	
  variables.	
  In	
  this	
  paper,	
  the	
  likelihood	
  of	
  democratic	
  transition	
  rather	
  than	
  the	
  likelihood	
  of	
  democratic	
  breakdown	
  is	
  more	  relevant,	
  as	
  China	
  is	
  clearly	
  not	
  yet	  a	
  liberal	
  democracy	  like	  many	  western	
  countries,	
  but	  under	  a	
  typical	
  authoritarian	  regime.	
  Besides,	  Jensen	
  and	
  Wantchekon	
  (2004)	
  treat	  the	
  likelihood	
  of	
  democratic	
  transition	  (the	  level	  of	
  democracy)	
  and	  the	
  likelihood	
  of	
  being	
  an	
  authoritarian	
  (the	  level	  of	
  authoritarianism,	
  or	
  the	
  endurance	
  of	
  authoritarian	
  rule)	
  as	
  the	
  same	  indication,	
  as	
  they	  are	  on	  the	
  same	  the	  regime	  type	  spectrum.	
  Similarly,	
  the	
  author	
  of	
  this	
  paper	
  is	
  not	
  going	  to	
  differentiate	
  the	
  level	  of	
  democracy	
  with	
  the	
  level	  of	
  authoritarian	
  rule,	  following	
  the	  tradition	
  in	
  resource	
  curse	
  literatures.	
   	
   	
  
	
  

12	
  

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  Weiwen_51128231	
  case, as almost all other works about this topic are based on nation(s). This is not true. For
example, Goldberg et al. (2008) find considerable support for a resource curse with regard topolitics, economic growth, and long-term development using a new data set for the U.S. states
spanning 73 years and case studies of Texas and Louisiana. In particular, the authors find that“the presence of state income generated as an external rent allows political elites to remain in
power without regard to the business cycle.” As a premise, they point out that the American
states look a lot like “contemporary accounts of many mineral economies: economic
decisions were driven by the prospect of huge returns in oil, rent seeking was prevalent, andstate governments colluded with private firms and each other to maximize the rents theymight extract from the oil industry.” If we consider the fact that almost half of the total
value-added of the industrial sector in Xinjiang is from the oil industry (Xinjiang Statistical
Yearbook, 2013),10 and that oil and gas exploitation represents almost half of Xinjiang’s
fiscal revenues (Becquelin, 2004), there’s no reason why we should exclude such a provincial
unit in our discussion about the resource curse. Therefore, there’s no substantial difference
whether we study a nation-state or a provincial unit.11

In this chapter, a literature review is provided, covering both empirical and formal theoreticalresearches that try to show whether natural resources abundance has some negative political
and/or economic consequences and that try to explain why and why not these consequences
exist. While empirical effort fails to address specific cases, or “outliers” in statistical terms,
formal theories in this field are too often a framework that demands empirical support. Thus,
a within-case analysis about Xinjiang that employs typical qualitative methods like

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
10	
   In	  the	
  year	  of	
  2012,	
  the	
  total	
  value-­‐added	
  of	
  the	  industrial	
  sector	
  was	
  285.006	
  billion	
  RMB	  in	
  Xinjiang.	
  Among	  them	  oil	  industry	
  contributes	
  138.617	
  billion,	
  coal	  mining	
  contributes	
  14.161	
  billion,	
  production	  of	
  electric	
  power	  (which	
  is	
  indirectly	
  related	
  to	
  resource	
  exploitation)	
  contributes	
  25.762	
  billion.	
  See	
  Statistical	
  Communiqué	
  on	
  the	  2012	
  National	
  Economic	
  &	
  Social	
  Development	
  of	
  the	  Xinjiang	
  Uyghur	
  Autonomous	
  Region,	
  in	
  Xinjiang	
  Statistical	
  Yearbook	  2013,	
  p.10.	
   	
  
11	
   In	
  fact,	  there’s	
  one	
  big	
  advantage	
  to	
  study	
  provincial	
  level	  samples.	
  As	
  Goldberg	
  et	
  al.	  (2008)	
  suggest,	
  first,	  the	
  popular	
  Dutch	  disease	
  argument,	
  whereby	  resource	
  booms	
  generate	
  real	  exchange	
  rate	  appreciation	
  that	
  lead	  to	
  poor	  economic	
  performance,	
  seems	
  very	  unlikely	
  to	
  explain	
  the	
  curse,	  since	
  there’s	
  no	
  exchange	
  rate	
  issue	
  among	  different	
  states	
  in	
  the	
  U.S.	
  Second,	
  some	  have	  argued	
  that	  it	
  is	
  the	
  tendency	
  for	  mineral	
  wealth	  to	  be	
  publicly	
  owned	
  that	  generates	
  the	
  negative	
  relationship	
  between	  resource	
  endowments	
  and	  poor	
  economic	
  and	  political	
  outcomes	
  (Weinthal	
  and	  Jones-­‐Luong,	
  2002).	
  However,	
  because	
  oil	
  and	
  coal	  are	  for	
  the	
  most	  part	  privately	
  held	  and	
  developed	
  in	
  the	
  U.S.	
  states,	
  this	  hypothesis	
  also	  seems	
  unlikely	
  to	
  explain	
  the	
  curse	
  either.	
  Therefore,	
  whether	
  oil	
  companies	
  are	
  publicly	
  or	
  privately	
  owned	
  doesn’t	
  make	  a	  difference.	
  One	
  important	
  implication	
  given	
  by	  Goldberg	
  et	
  al.	  (2008)	
  is	
  that	  the	
  ownership	
  issue	
  of	
  energy	
  companies	
  doesn’t	
  explain	
  the	
  occurrence	
  of	
  resource	
  curse.	
  Instead,	
  it	
  is	
  resource	
  abundance	
  that	  accounts	
  in	
  the	
  end.	
   	
   	
   	
   	
  
	
  

13	
  

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  Weiwen_51128231	
  congruence procedures and process tracing is worthy. Moreover, it is expected that such casestudy can also help us understand the origin of current instability in Xinjiang, a place that has
both geopolitical and economic value to China.

	
  

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  Chapter III: The Natural Resource Curse in Xinjiang

In this chapter the author will elaborate how natural resource abundance, distributional
inequality, ethnic tensions, and tighter authoritarian control are related in the case of Xinjiang.
Before we go into causal analysis, a brief introduction to contemporary Xinjiang with a focus
on the development of energy industry is provided.

3.1. Natural Resource Abundance in Xinjiang

The Xinjiang Uyghur Autonomous Region (also called XUAR for short),12 one of China’s
five autonomous regions for ethnic minorities, situated in the border area of northwest China
and the hinterland of the Eurasian Continent, occupies an area of 1.6649 million sq km,
accounting for one sixth of Chinese territory. As an important section of the ancient Silk Road,
it has a land border of 5,600 km bounded by eight countries (Government White Paper,2003).13 In 2012, Xinjiang has a resident population of 22.32 million. Among them 8.47
million are Han Chinese, the majority ethnic group in China, and 10.52 million are the
Uyghurs, the most populated ethnic group in the region (Xinjiang Statistical Yearbook, 2013).
If we compare the Sixth National Population Census conducted in 2010 to the Fifth
Population Census conducted ten years ago, Han Chinese population increases by 16.77%,
while the increase rate for minorities is 19.12%.14 Besides the Uyghurs and Han Chinese,
there are many other ethnic groups in Xinjiang as well, mainly the Kazak, Hui, Mongolian,
Kirgiz, Xibe, Tajik, Ozbek, Manchu, Daur, Tatar and Russian. The Gross Domestic Product(GDP) of Xinjiang in 2012 is 7505.31 million RMB, and the GDP per capita is 33796 RMBin that year (Xinjiang Statistical Yearbook, 2013).

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  

12	
   Independence	
  activists	  also	  use	
  “East	
  Turkistan”	
  to	
  refer	
  to	
  the	
  region.	
  The	
  author	  agrees	
  that	  both	  “East	  Turkistan”	
  and	  Xinjiang	
  (which	
  means	
  “new	
  territory”	
  in	
  Chinese)	
  are	
  linked	
  with	  politics.	
  But	  in	
  this	
  paper	  I	
  will	  follow	
  the	
  mainstream	
  in	
  official	
  documents	
  and	
  academia,	
  which	  is	
  Xinjiang.	
  13	
   Information	
  Office	
  of	
  the	
  State	  Council	
  of	
  the	
  PRC,	
  “History	
  and	  Development	
  of	
  Xinjiang,”	
  May	
  2003,	
  see:	  http://www.china.org.cn/e-­‐white/20030526/.	
  Last	  accessed:	
  April	  5th,	
  2014.	
   	
  
14	
   Xinjiang	
  Statistical	
  Bureau,	
  “Main	
  Data	  Bulletin	
  about	  the	  2010	
  Sixth	  National	
  Census	
  in	
  Xinjiang	
  [xinjiang	  weiwuer	  zizhiqu	
  2010	
  nian	  diliuci	
  quanguo	
  renkou	
  pucha	  zhuyao	
  shuju	
  gongbao],”	  May	
  6th,	
  2011,	  see:	  http://www.stats.gov.cn/tjsj/tjgb/rkpcgb/dfrkpcgb/201202/t20120228_30407.html.	
  Last	  accessed:	
  April	  5th,	
  2014.	
  
	
  

15	
  

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  Weiwen_51128231	
  Figure 2: Xinjiang’s Geographical Position
Source: Bovingdon (2013).

The very first residents of Xinjiang may have been of Caucasian as mummified bodies foundin the Tarim Basin suggest. But the ancestors of Xinjiang’s most populated ethnic grouptoday, the Uyghurs, came from what is now Mongolia. Being one of the Turkic people, theybuilt an empire of the Uighurs (Huihu in Chinese annals) in the seventh and eighth centuries,
and had a good relation with the Tang Dynasty. The Mongol Conquests in the thirteenth
century left the famous Chagatai Khanate (1225-1687), and it is also in this period that Islam
became the dominant religion in this region and replaced Buddhism, Christianity and local
primitive religions by force.

The interaction between Xinjiang and the central dynasties in China can date back to 129 BC,
when Zhang Qian was sent by Emperor Han Wudi and trying to form an alliance with the
Yuezhi against the northern enemy, the Xiongnu (also known as the Huns in the west).
Though he failed to deliver an alliance to his emperor, his effort stimulated the interests of theChinese and paved way for Han’s military and political presence in the region. China’s
influence remained after that, sometimes strong, sometimes weak, depending on the strengthof the central dynasties. It is not until the Qing Dynasty that Xinjiang was formally
	
  

16	
  

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  Weiwen_51128231	
  incorporated into the Chinese empire as a province in 1884 at the time of the intense British
and Russian imperial rivalry in Central Asia known as the Great Game (Dillon, 2001). Before
that, Emperor Qianlong (1763-1795) and Zuo Zhongtang (1812-1885)’s military victory
against rebellions served to be the foundation for China’s rule in the region. In the 1930s andthe 1940s, China’s rule was challenged again by the two “Eastern Turkistan Republics”, andthe second one was even influenced by the Soviet Union and the Chinese Communists (Dillon
2004: 32-33). But in late 1949, the KMT army in Xinjiang surrendered to Wang Zhen
(1908-1993), a PLA general famous for his iron hand policy against any local rebellion, andXinjiang became part of the newly founded PRC. In 1955, the Autonomous Region wasestablished.

Xinjiang is important for China not only because of its geographical position but also its
abundance in coal, crude oil, and gas. Xinjiang has 40% of coal reserve, 22% of petroleum
reserve, and 28% of gas reserve in the country.15 Besides, the coal deposits in Xinjiang are ofhigher quality compared to deposits in other provinces, as it contains less sulfur, while the oil
deposits are more accessible because most of them are located in shallow and middle strata
oil-reservoir. Oil-gas fields in Xinjiang are concentrated in Karamay, Tarim Basin, andTurfan Basin. They are three of China’s 17 major gas-oil fields in the land, and are among themost productive ones.16

Energy development is no doubt a growth engine for Xinjiang’s economy (See Figure 3).
Ever since the 1990s, in the effort to boost the provincial economy—in part to attract andsupport a larger population－an economy strategy was devised to “rely on two pillars,” “oneblack, one white” (yi hei yi bai): oil exploitation and cotton cultivation (Becquelin, 2000).
This is the so-called “Twin Strategy”, which China’s plans to “Develop the West” (xibu dakai

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  

15	
   “The	  Blowout-­‐type	
  Development	
  of	
  Energy	
  Industry	  Has	  Taken	
  Up	
  in	
  Xinjiang	
  [xinjiang	
  nengyuan	
  chanliang	
  de	
  jingpen	
  dashi	  yicheng],”	
  see:	  http://www.musilin.net.cn/2010/0805/47075.html.	
  Last	  accessed:	
  April	  5th,	
  2014.	
  “Xinjiang’s	
  Oil	
  Reserve	
  is	
  as	
  much	  as	
  22%	  of	
  the	
  Country	
  [xinjiang	  shiyou	
  ziyuanliang	  zhan	
  quanguo	
  22E%],”	
  see:	  http://oil.in-­‐en.com/html/oil-­‐08270827182117453.html.	
  Last	  accessed:	
  April	  5th,	
  2014.	
  16	
   CNPC,	
  “Location	
  of	
  Oil	
  Reserve	
  in	
  China	
  [zhongguo	
  shiyou	
  fenbu],”	  see:	  http://www.cnpc.com.cn/News/zzxw/sybk/syzs/sysh/201310/20131011_C191.shtml?COLLCC=7320640&COLLCC=2517866373&.	
  Last	  accessed:	
  April	  5th,	
  2014.	
  
	
  

17	
  

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  Weiwen_51128231	
  fa) are built on (Fuller and Starr, 2004: 69). Becquelin (2004) also indicates that“by far thetwo most critical projects designated as part of Xinjiang’s campaign to Open Up the West are
the west to east natural gas pipeline and the comprehensive rehabilitation of the Tarim River,”both of them are energy related projects. The West-East Gas Pipeline is now not onlytransferring 12 billion cubic meters of natural gas annually from Xinjiang to coastal areas
where demand for energy is the highest, but also connected to the gas field in Turkmenistan,and possibly Iran in the future (See Figure 4). As a result, oil and gas exploitation represents
almost half of Xinjiang’s fiscal revenues (Becquelin, 2004). In other words, Xinjiang is not
only abundant in natural resources, but also highly resource-dependent in accordance with
Dunning’s (2008) definition, and even more resource-dependent than many majoroil-producing countries like Indonesia, Mexico, Norway, etc. (Haber and Menaldo, 2011).
What’s more, Xinjiang has been the only province in China with a steady increase on both oil
and gas production.17 We can’t help but wonder what social and political consequence of
natural resource abundance would be in such a region.

Crude Coal (10000 tons)

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  

17	
   Energytribune,	
  “Xinjiang	
  Enticement,”	
  see:	  http://www.energytribune.com/5028/xinjiang-­‐enticements#sthash.BMnWbjsu.8A4ZIX2B.dpbs.	
  Last	  accessed:	
  April	  5th,	
  2014.	
  
	
  
	
  

18	
  

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  Weiwen_51128231	
  Crude Oil (10000 tons)

Natural Gas (100 million cu. m)

Figure 3: Output of Major Energy Products in Xinjiang since 1990
Source: Xinjiang Statistical Yearbook 2013

	
  

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  Weiwen_51128231	
  Figure 4: The West-East Gas Pipeline in China
Source:http://www.scmp.com/lifestyle/technology/article/1261619/second-west-east-gas-pipeline-set-start-hon
g-kong-supplies

3.2. Distributional Inequality over Resource Revenue

The development of energy industries leads to a rapidly growing economy in Xinjiang (SeeFigure 5). But the local residents in Xinjiang, particularly, the Uyghurs, may not enjoy thebenefits of oil and gas exploitation. Some activists claim that those involved with thedevelopment of energy wealth are mainly Han Chinese, rather than the Uyghurs, and the
profits go mainly to Beijing (Fuller and Starr, 2004: 6). But the fact that the profits go mainly
to Beijing cannot explain the anger of the Uyghurs. As Xinjiang’s “public economy”(gongyou jingji) is in a dominant position,18 particularly in resource related industries, itwould be a strange thing if the profits do not “go to Beijing” and into the pocket of big oil
companies like CNPC and Sinopec. But in fact you can hardly find any Han people
complaining about that, even though many of them are also ordinary people like the Uyghurs.

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  

18	
   Heavy	
  industry	
  represented	
  almost	
  two-­‐thirds	
  of	
  the	  XUAR’s	
  GDP,	
  and	
  over	
  80	
  per	
  cent	  of	
  its	  industrial	
  assets	  are	
  under	  the	  management	
  of	
  state-­‐owned	
  enterprises	
  (Becquelin,	
  2004).	
  Even	  compared	
  with	  other	  inland	  provinces	
  in	
  the	
  west,	  the	
  private	
  sector	
  in	
  Xinjiang	
  is	
  still	
  relatively	
  weaker	
  (Vicziany	
  and	  Zhang,	  2004).	
  
	
  

20	
  

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  Weiwen_51128231	
  The problem does not lie in how much the central government or state-owned companies gainfrom Xinjiang’s abundance in coal, oil and gas, but in how little the Uyghurs receive
compared to their Han neighbors in Xinjiang. The key point is, resource exploitation brings alarge number of migrants from other provinces, and these migrants deprive the Uyghurs (andalso many local Han people who have been living in Xinjiang since early 1950s) of
employment opportunities. All these happen mainly because of an irreversible process ofmarketization: no one can get a job for sure in a relatively free market. In this section, I will
first provide some empirical evidence on the correlation between energy development andmigration boom in Xinjiang, then show why the newcomers have annoyed the Uyghurs
through literature review and a case study at micro-level.

Figure 5: GDP of Xinjiang (100 million RMB)
Source: Xinjiang Statistical Yearbook, 2013

Human rights activists have been criticizing that the oil industry is now completely run byHan, and resource exploitation has brought most of its workers from other parts of China,
thus deprived local minorities of employment opportunities (Uyghur Human Rights Projects,2012). If we compare the ethnic minority proportion in areas where either oil or gas
production is reported with areas without significant resource production, we do find that theminorities are usually outnumbered by the Han people in oil or gas-rich prefectures (see Table
1).19

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
19	
   The	  Xinjiang	
  Statistical	
  Yearbook	
  of	
  Energy	
  Development	
  2007[xinjiang	
  nengyuan	
  tongji	  nianjian	
  2007]	
  

	
  

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  Table 1: Ethnic Minority Rates and Energy Production
Percentage of Ethnic

Oil or Gas Output

Minorities in 2010

Reported in 2007

XUAR

59.52

Not Applied

Urumqi City

25.09

Yes

Qaramay City

18.35

Yes

Turpan Administrative

74.98

Yes

30.65

No

24.69

No

35.04

No

40.71

Yes

77.11

No

93.22

No

92.00

No

96.41

No

64.78

No

34.27

No

61.45

No

Offices
Hami [Kumul]
Administrative Offices
Changji Hui
Autonomous Prefecture
Bortala Mongolian
Autonomous Prefecture
Bayangol Mongolian
Autonomous Prefecture
Aksu Administrative
Offices
Kizilsu Kirgiz
Autonomous Prefecture
Kashgar Administrative
Prefecture
Hotan Administrative
OfficesIli Kazak Autonomous
Prefecture
Tacheng [Tarbagatai]
Administrative Offices
Altay Administrative
Offices
Source: The Sixth National Population Census and Xinjiang Statistical Yearbook of Energy
Development 2007

In order to confirm whether natural resource industry has brought too many workers from

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
is	
  the	
  only	  source	  that	  we	
  can	
  know	
  about	  the	
  geographical	
  allocation	
  of	
  resource	
  production.	
  In	
  Table	
  1	
  I	
  
also	
  exclude	
  the	
  four	  cities	
  directly	
  under	  the	
  jurisdiction	
  of	
  XUAR	
  government,	
  as	
  they	  are	
  under	  the	
  control	
  of	
  Xinjiang	
  Production	  and	
  Construction	
  Corps	
  (XPCC)	
  that	  is	  a	
  semi-­‐military	  organization.	
  See	  the	
  following	
  discussion	
  about	
  XPCC.	
   	
   	
   	
  
	
  

22	
  

Yin	
  Weiwen_51128231	
  other provinces, I make use of the demographic information at the county level in the fifthand sixth national population censuses conducted in 2000 and 2010,20 respectively, andestimate simple “First-differenced equations”.

Table 2: Variable Descriptions
Dependent Variable
Δmipop= migration population from other provinces in2010 - migration population from other provincesin 2000

Independent Variables
Δsegdp= GDP of secondary sector of Xinjiang in 2010 GDP of secondary sector of Xinjiang in 2000,
billion RMB

Δgdp= GDP of Xinjiang in 2010 - GDP of Xinjiang in
2000, billion RMB

Δenpop= population working in energy industry of
Xinjiang in 2010 – population working in energy
industry of Xinjiang in 2000

Sources:
Xinjiang Statistical Yearbook, 2001, 2011.
National Population Census, 2000, 2010.

Table 3: Estimation Results
Model 1
ΔsegdpModel 2Model 33167.94***

3000.14***(315.47)(237.67)

ΔenpopModel 4151.28***132.93***73.16***(28.21)(16.54)(13.04)Δgdp

2151.68***(115.48)

Constant

Numberof-3520.29

6051.86-1707.492-5589.19***(2695.18)(3321.539)(2035.16)(1582.11)

84

84

84

84

Observations

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  

20	
   The	  seven	
  municipalities	
  directly	
  under	  the	
  jurisdiction	
  of	
  the	
  Autonomous	
  Region	
  Government	
  are	  excluded,	
  as	
  they	  are	
  under	  the	
  direct	  control	
  of	
  the	  Xinjiang	
  Production	  and	
  Construction	
  Corps	
  (XPCC).	
  Thus	
  these	
  municipalities	
  are	  more	  of	  a	
  semi-­‐military	  organization	
  where	  migration	
  registration	
  is	
  much	  stricter	  than	  common	
  administrations.	
  Moreover,	
  missing	
  data	  problem	
  also	  occurs	
  to	
  these	  samples.	
   	
   	
  
	
  

23	
  

Yin	
  Weiwen_51128231	
  Prob>F

0.00

0.00

0.00

0.00

R-square

0.55

0.26

0.75

0.86

Adjusted

0.55

0.25

0.74

0.86

R-squareNote: The numbers in parentheses are standard errors. *p < 0.05. **p < 0.01. *** p < 0.001.

Although the output of energy industry is not available at county level, the population
working in energy-relevant industry can be the proxy of the development of energy industry.
From Model 1, we can tell that general industrialization significantly affects the increase of
migrants from other provinces: a one-billion increase in the GDP of secondary industry in ten
years is associated with approximately 3200 more migrants at the local area. From Model 2,
we can tell that the development of natural resource industry alone can also attract migrants,
even though these new comers may not necessarily directly involved in the production of oil
or gas. It’s reasonable that energy exploitation may have some positive spillover effect, likeattracting migrants to open restaurants or providing other services at local area, or thesepeople are simply the family of employees working in energy industry. Controlled for
different economic indicators (Model 3 and 4), the positive effect remains highly significant,even though it’s less salient, since many other economic activities can also attract migrants.
Thus, it is evident that between 2000 and 2010, the development of energy industry, alongwith the industrialization in a broad sense, is responsible for the migrant flood in Xinjiang.
Interestingly, we can also tell from the constant in Model 4 that people would not have moved
in if there were no economic development—the migrant flood is mainly driven by economic
factors instead of political ones.

Concerning whether such migration flood has changed local ethnic compositions, I use thesame data set and calculate the correlation between the absolute change of minority rates andthe change of migrant rates as a percentage of local population. The correlation is -0.64,
which indicates that migrants from other provinces did largely reduce the rate of ethnic
minorities in Xinjiang as is expected.	
   	
   	
   	
   	
   	
  

	
  

24	
  

Yin	
  Weiwen_51128231	
  Many scholars have also been studying the difference between Han people and the Uyghurs
in terms of income level in an effort to assess the impact of migration boom, and they do havea similar conclusion that in fact looking at the so-called high-status jobs, particularly, theadministrative jobs in the government and other public sectors, one could hardly find any
ethnic differences. Minorities are not discriminated in receiving salary in these positions, if
we examine various data sets spanning from the 1980s till present day (Hannum and Xie,
1998; Layne and Liang, 2008; Zang, 2011;	
   Wu and Song 2014). The problem is, mostminorities are not working in the public sectors. According to Layne and Liang’s (2008)
studies, Han Chinese occupy 71% of the high-end jobs such as officials and managers and
57% of professional jobs, while Uyghurs only comprise 17% of government officials. Han
people are particularly overrepresented in two major economic sectors: the oil industry and
the Xinjiang Production and Construction Corps (XPCC),21 which together had Han Chinese
as over 95% of their labor force (Zhu and Balchford, 2012). The preference of XPCC is not asecret. According to materials posted on the XPCC's Personnel Testing Authority, the Corps
would hire 840 civil servants from the Xinjiang through its 2006 recruitment exam, of whom
38 would be ethnic minorities and the remainder Han Chinese.22 Therefore, it would bemeaningless if we only look at the salary level of the Uyghurs in high-end positions. We
should instead pay more attention to those working as construction workers, farmers, etc., asthese jobs are directly the target of migrants from other provinces.

But the author would disagree with Ilham Toxti, who firmly believes that the migration boom
mainly is caused by political consideration, which is to assimilate the Uyghurs throughencouraging more Han people to work and live in Xinjiang.23 Instead, I would argue, based

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  

21	
   The	  XPCC	  is	  a	
  semi-­‐military	
  government	
  organization	
  that	  has	
  its	
  own	
  administrative	  and	
  judicial	
  system	  in	
  certain	
  cities	
  and	
  settlements	
  in	
  Xinjiang.	
  It	
  was	
  founded	
  in	
  1954	
  by	
  Wang	
  Zhen,	
  and	
  has	  been	  playing	
  a	
  
key	
  role	  in	
  maintaining	
  the	
  stability	
  in	
  Xinjiang.	
  In	
  2012,	
  XPCC	  has	  a	
  population	
  of	
  2648636,	
  with	  an	
  agricultural	
  population	
  of	
  1192468	
  (Xinjiang	
  Statistical	
  Yearbook,	
  2013).	
   	
  
22	
   See:	
  Congressional-­‐executive	  Commission	
  on	
  China,	
  “Civil	
  Servant	
  Recruitment	
  in	
  Xinjiang	  Favors	
  Han	
  Chinese,”	
  July	  25th,	  2006.	
  See:	  http://www.cecc.gov/publications/commission-­‐analysis/civil-­‐servant-­‐recruitment-­‐in-­‐xinjiang-­‐favors-­‐han-­‐chinese.	
  Last	  accessed:	
  April	  5th,	
  2014.	
   	
  
23	
   Ilham	  Toxti	  ,	
  “Is	
  There	  no	
  Need	  to	
  Rethink	
  about	
  China’s	
  Policy	
  towards	
  Ethnic	
  Minorities	
  [zhongguo	  de	
  minzu	
  zhengce	
  bu	
  xuyao	
  fansi	  ma]?”	
  See:	  http://chilanbagh.wordpress.com/2010/10/28/%E4%B8%AD%E5%9B%BD%E7%9A%84%E6%B0%91%E6%97%8F%E6%94%BF%E7%AD%96%E4%B8%8D%E9%9C%80%E8%A6%81%E5%8F%8D%E6%8
0%9D%E5%90%97%EF%BC%9F/.	
  Last	  accessed:	
  April	  5th,	
  2014.	
  
	
  

25	
  

Yin	
  Weiwen_51128231	
  on the estimation results above, it is the market that is responsible in the end. Though somelabel this type of migration “ethnic genocide” or “demographic annihilation,” Zhu andBalchford (2012) believe it is the self-initiated/market-driven migration that has a very direct
impact on both demographic and employment situations in ethnic minority areas. As theysuggest, “the real problem is, market mechanisms do not provide solutions to deal with thenegative outcomes of economic competition but may in fact exacerbate problems.” And the
difficulty for government is that “its intervention and regulatory power is constrained becauseof market mechanisms and private ownership domination in investment and businessprojects”: many jobs demand certain skills and education levels that many Uyghurs do not
have, and many Han employers prefer hiring people with whom they find it easier tocommunicate.

In a relatively free market where companies, including state-owned ones, emphasize
efficiency, Han Chinese do have more advantages simply because they can speak Mandarin
Chinese more fluently than the Uyghurs, for whom Mandarin is a completely different
language. According to a survey, only 19.88% of the Uyghurs have the ability to speak
Mandarin, ranking the 50th among the 54 minorities surveyed (Han, 2013). The difficulty for
the Uyghurs to master Mandarin also has a negative effect on their education level, which
directly reflects an employee’s human capital. That’s the reason why the ADB report of 2001
identifies language policy in Xinjiang as one of the most fundamental obstacles to the upward
mobility of the Uygur (Asian Development Bank, 2002: 276-277). More than a skill
indispensable for job-hunting, language also matters for building connection with government
in a “state-capitalism” country like China. Vicziany and Zhang’s (2004) case studies examine
how Han Chinese businessmen and ethnic minority businessmen differ in terms of theconnection with government officials inside and outside Xinjiang. As they suggest, language
serves to be an obstacle for Uyghurs businessmen in developing good relationships withgovernment officials, thus talented Uyghurs can only turn to private sectors like opening a
restaurant. On the other hand, Han businessmen in Xinjiang like Sun Guangxin who is now
one of the richest men in China can earn much more in a state-capitalism system, as they can
use their influence in the government to participate in the highly profitable oil drilling or real
	
  

26	
  

Yin	
  Weiwen_51128231	
  estate. Besides, Sun’s experience in the army is also very helpful for his business. The result
is, some Uyghurs businessmen even decide to shift their investment away from Xinjiang toforeign countries like Turkey, which is a Turkish country, and they do believe that they will
face less suppression abroad.

Unfortunately, this situation is not going to change in the short term. Zhu and Balchford(2012) say that in the end there are few policy options available for the government:
restriction of migration to Xinjiang and Tibet will not be a viable policy option, for bothnormative and practical reasons. If this is true, the future is not optimistic at all, as themarketization process seems irreversible. Wu and Song (2014) also analyze a sample from the2005 mini-census of Xinjiang to examine ethnic stratification in China’s labor markets, with a
special focus on how ethnic earnings inequality varies by employment sector. They find thatthe Han-Uyghur earnings gap was negligible within government/public institutions, but
increased with the marketization of the employment sector; it was the largest among theself-employed, followed by employees in private enterprises and then employees in public
enterprises. Thus, as marketization continues, it is possible that the income gap will becomelarger, and the Uyghurs will have fewer employment opportunities.

Qaramay is a good case for us to see in detail how the ongoing energy exploitation brings nosubstantial good to local residents but a worse situation for young ethnic minorities to find ajob. “Qaramay” means “black oil” in Uyghur language, and it is a very typical oil city in
Xinjiang. Before oil was found in 1955, almost all local residents were Uyghurs and Kazakh.
But at present only approximately 25% of the whole population are minorities (Xinjiang
Statistical Yearbook, 2013), since energy industries have attracted migrant workers fromother provinces for the past few decades, and many of them have become permanent residents
in Qaramay. In 2012, Qaramay has a Gross Regional Product of 81.07 billion RMB, with thehighest GDP per capita among all the cities in the country (Xinjiang Statistical Yearbook,2013). There’s no doubt that natural resources, particular, crude oil, have generated a great
fortune for Qaramay.

	
  

27	
  

Yin	
  Weiwen_51128231	
  However, not everyone feels that they can enjoy the wealth from the oil industry. Instead,many minorities believe that they are discriminated in the job market. It is not easy for the
Uyghurs (and the Kazakh as well) to find a job in any well-paid oil company. In December
2012, many Uyghur and Kazakh parents went to streets to protest against oil companies in
Qaramay, asking the government to solve the discrimination problems in the job market thathave been existing for years. They believed that the recruitment process was unfair to ethnic
minority young people, as oil companies imposed too many restrictions on ethic ratio,
maximum age, etc. Besides, they also complained about the lower salaries for minorities. The
protest lasted for almost half a year, and in February and May 2013, some parents evenresorted to petitioning (shangfang) twice. They claimed that they came to Beijing on behalf of5000 unemployed minority youth, as the local government didn’t respond to them at all. The
parents were also worried about the increasing crime rate, divorce rate, and the proliferationof drugs among minority young people, which, they believe, are all attributed to
unemployment.24

But their protest didn’t change the situation. In March 2013, when Qaramay recruited
graduates again, it is said that only those who took the university entrance exam in Mandarin
Chinese instead of minority languages were eligible to apply. Although at the same time theauthority announced that 88.5% of the graduates in 2012 were employed, Uyghur netizens
criticized that the number must be exaggerated.25 Xinjiang’s former party secretary Wang
Lequan pointed out two reasons why minorities are disadvantaged. First, China has been
facing employment pressure for years, and in recent years annually more than 5 million
graduates are looking for jobs. Xinjiang is no exception. Second, oil exploitation and mining
create a huge demand for labors, but what companies need are engineering professionals andconstruction workers who can communicate freely in Mandarin. Wang admits, “minority
ethnic groups have their own languages, and they don’t know too much Mandarin. However,

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
24	
   “Minorities	
  Mothers	
  from	  Qaramay	
  Went	  Petitioning,	
  Protesting	
  against	
  Ethnic	
  Discrimination	
  in	
  

Employment	
  [kelamayi	
  shaoshuminzu	
  muqin	  jiti	  shangfang,	
  fandui	  zinv	
  mianlin	
  jiuye	
  minzu	
  qishi],”	  see:	  http://www.boxun.com/news/gb/china/2013/05/201305290415.shtml#.UzejmK2Sw8k.	
  Last	  accessed:	
  April	
  5th,	
  2014.	
  25	
   “Discriminative	  Clauses	
  are	
  Seen	  in	
  Recruitment	  Process	
  across	
  Xinjiang	
  [xinjiang	
  duodi	  chegnxian	
  qishixing	
  tiaokuan],”	
  see:	  http://tibet.woeser.com/?p=35711.	
  Last	  accessed:	
  April	  5th,	
  2014.	
  
	
  

28	
  

Yin	
  Weiwen_51128231	
  people in these enterprises use Chinese. Without the ability to speak Mandarin, it is difficult
for minority people to find a job. There’s no way to solve this problem.” Again and again,
education and language problem becomes the obstacle for minorities to find a good job in
profitable sectors and “share” the revenue of energy industries.26

In this section, we can see that the natural resource abundance in Xinjiang is not improving
the life of the Uyghurs. Instead, it brings too many migrants from other provinces in China
who have more advantages in looking for jobs when they compete with the local minorities.
That said, the fluency in Mandarin makes migrants (including floating workers) morefavorable in the job market.27 Indeed, against the background of marketization, the era whenminority graduates could be offered a job for sure by the government is gone forever.28
That’s the reason why Becquelin (2000) argues that political instability in Xinjiang cannot be
attributed merely to the rise of ethno-national and Islamic-inspired political movements, butalso to an influx of new migrants competing for jobs, public goods, land and water. One canunderstand why religion cannot exclusively explain the current instability in Xinjiang byreferring to the status of the Hui People, the majority of whom are also Islamic practitioners,
but speak Mandarin Chinese. In fact, the Hui People migrants to Xinjiang are also blamed bymany Uyghurs for worsening the unemployment problem, along with the Han Chinese
migrants. We now see natural resource doesn’t necessarily lead to a better life. But how does
it turn out to be a political or economic “curse”? How do the dissatisfactory and anger of the
Uyghurs relate to the strengthening of an authoritarian regime? The next section will continue
to trace the causal link and give the whole picture of the causal mechanism.

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
26	
   “Labor	
  Redundancy	
  Makes	  it	
  More	  Difficult	
  for	
  Minorities	
  to	
  Find	
  a	
  Job	
  [zhongguo	
  laodongli	
  guosheng	
  xinjiang	
  shaoshuminzu	
  jiuye	
  nan],”	
  see:	  http://www.voachinese.com/content/a-­‐21-­‐w2006-­‐10-­‐19-­‐voa29-­‐58455377/1089506.html.	
  Last	  accessed:	
  April	
  5th,	
  2014.	
  27	
   Migrants	
  can	  be	
  categorized	
  as	
  two	
  groups:	
  permanent	
  migrants	
  and	
  floating	
  migrants	  (floating	
  workers),	
  while	  the	
  former	  have	  local	
  household	
  registration	
  status	
  (hukou),	
  the	
  latter	
  is	
  living	
  without	
  it.	
  According	
  to	
  population	
  census	
  conducted	
  in	
  2000,	  Xinjiang	  has	
  1.917	
  million	
  floating	
  migrants,	
  approximately	
  10.4%	
  of	
  the	
  provincial	
  population.	
  The	
  share	  of	
  floating	
  population	
  in	
  Xinjiang	
  is	
  the	
  highest	
  among	  all	
  western	  provinces,	
  and	
  one	  of	
  the	
  highest	
  across	
  the	
  nation.	
  See	
  Liang	
  and	  Ma	  (2004).	
   	
   	
  
28	
   This	
  can	  partly	
  explain	
  why	  many	  people	  in	
  the	  minority	
  ethnic	
  groups	
  miss	
  Mao	
  Zedong’s	
  era,	
  when	
  there	  was	  no	
  need	  for	
  graduates	
  to	
  look	  for	  a	
  job	  in	
  a	
  planned	
  economy.	
  
	
  

29	
  

Yin	
  Weiwen_51128231	
  3.3. Challenges from the Uyghurs and Strengthening of the Authoritarian RuleAs we mention in the literature review about the natural resource curse, natural resource itself
provides an incentive for “losers” in oil or gas exploitation to rise and challenge the positionof those who benefit most from energy industry. This sort of rebel incentive has been treatedas the link between natural resources and civil war (Collier and Hoeffler, 2004; Lujala, 2010).
If ethnic tension is relevant to this issue, in other words, if one can draw a sharp line between
ethnic groups that enjoy most revenue from natural resources and those that almost gain
nothing, it is predictable that the conflict over the resource revenue will be more severe thanin places where ethnic tension is not relevant.

This is exactly what’s going on in Xinjiang. Although we don’t have good data about how
many mass protests like those in Qaramay broke out in Xinjiang. we do have anotherindicator to measure the “resistance” of the dissatisfied Uyghurs—the frequency of terrorist
attacks. The Chinese government has been accusing the East Turkestan Islamic Movement(ETIM) of being responsible for the terrorist attack inside Xinjiang, and in recent years,
outside the autonomous region. It is reported that the ETIM has close connection with thefundamentalists from the Taliban, who has been offering the Xinjiang separatists withtraining programs, weapons, and financial support. ETIM has also been listed as a terrorist
organization by the U.S. government since 2002.

Although the terrorists in Xinjiang are mainly driven by religious fanaticism, the larger andlarger income gap between the Han people and ethnic minorities also attracts many young
Uyghurs to resort to violence. Then, we must clarify whether ethnic tensions in China are on
the rise in recent years, in particular, whether they are on the rise in Xinjiang along with theongoing energy development. The answer should be yes, but only in Xinjiang. 29 The
following tables show the frequency of terrorist attacks in Xinjiang since the 1990s.30

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  

29	
   A	
  ChinaFile	  Conversation,	
  “Are	  Ethnic	  Tensions	
  on	
  the	
  Rise	  in	
  China,”	
  see:	  https://www.chinafile.com/are-­‐ethnic-­‐tensions-­‐rise-­‐china.	
  Last	  accessed:	
  April	  5th,	
  2014.	
  30	
   Terrorist	
  Attack	
  in	
  the	  Urumqi	
  South	  Railway	
  Station	
  that	  caused	
  at	
  least	  3	
  death	  and	  79	  injured	  on	
  April	
  30th,	  2014,	
  has	  not	  been	
  included	
  in	
  Table	  2,	
  when	  President	
  Xi	
  Jinping	
  himself	
  was	
  visiting	
  Xinjiang.	
   	
  
	
  

30	
  

Yin	
  Weiwen_51128231	
  Table 4: Major Terrorist Attacks in Xinjiang since the 1990s
Year

Date

Place

1990

April 5th

Akto County, Kizilsu Kirgiz
Autonomous Prefecture

1992

February 5th

Urumqi

1993

June 17th

Kashgar1997

February 5th

Yining City, Ili Kazak
Autonomous Prefecture

February 25th

Urumqi2008

August 4th

Kashgar2009

July 5th

Urumqi2012

February 28th

Yecheng County, Kashgar

July 18th

Hotan

April 23rd

Bachu County, Kashgar

June 26th

Shanshan County, Turpan

August 20th

Yecheng County, Kashgar

November 16th

Bachu County, Kashgar

December 15th

Shufu County, Kashgar

December 30th

Shache County, Kashgar

January 24th

Xinhe County, Aksu

February 14th

Wushi County, Aksu

2013

2014

Source: Zhang (2014).

Table 5: Terrorist Attacks in China between 2000 and 2012
By Uyghur Separatists(including
2000

	
  

suspected,

All

In Xinjiang

excluding unknown)

4

0

0

31	
  

Yin	
  Weiwen_51128231	
  

2001

13

1

0

2002

2

0

0

2003

3

0

0

2004

2

0

0

2005

2

1

1

2006

1

0

0

2007

0

0

0

2008

20

4

6

2009

9

3

0

2010

1

1

0

2011

4

3

3

2012

4

3

2

Source: Global Terrorism Database (GTD)

From Table 2 we can see that since 2008 there is an increasing tendency in terrorist attacks.
Most of these attacks happened in Southern Xinjiang, where most residents are the Uyghurs
rather than Han Chinese. Besides, in recent years, the threat of terrorism is not limited in
Xinjiang. For example, the crash incident in Tiananmen in 2013 and the Kunming massacrein March 2014 both show that any place in China can be the target of terrorists. Therefore,
using the frequency of terrorist attacks as a “proxy” to measure the resistance of Uyghurs, we
can conclude that the ethnic tensions are on the rise in Xinjiang, and the challengers will noteasily give up their ambition in the revenue generated by oil exploitation.

Confronted by the challenges from ethnic minorities, what policy will the government adopt?
As is mentioned above, political scientists and economists have contributed much to ourunderstanding about the political “curse” of natural resources, and they have generalized
some important concepts. Among them the widely discussed ones include the so-called“rentier effect” and “repression effect”. The “rentier effect” means that resource-richgovernments use low tax rates and patronage to relieve pressures for greater accountability. In
contrast, the “repression effect” argues that resource wealth retards democratization byenabling governments to boost their funding for internal security (Ross, 2001). We can saythat almost all debates in this field originate from these two concepts. They are not only
useful in theoretical discussion, but can also help us explain the reaction of the Chinese
	
  

32	
  

Yin	
  Weiwen_51128231	
  government—both central and local—when the situation in Xinjiang deteriorates because of
the challenges from the Uyghurs.

“Patronage” and “Repression” are just like “Carrot and Stick”. Indeed, this has been theapproach Chinese government adopts to govern this resource-rich region.31 On one hand, it is
not a strange thing that an authoritarian regime will choose to impose more control over thesociety when the stability is threatened, and the Chinese government is not an exception.
Sometimes such social control methods may do harm to the rights of citizens. The bestindicator to measure accurately how much the Chinese government has strengthened its
control in Xinjiang is the budget for “managing the stability” (weiwen): according to official
statistics released in January 2013, regional authorities allocated 9.34 billion RMB to the
public security sector in 2012, a 23-percent increase over 2011.32 Besides, we can also seesome other policies adopted that directly reveal a harder policy in Xinjiang. One of the mostobvious evidence would be the information blockade that was introduced after the street riots
on July 5th, 2009. The SMS system was completely shut down for almost 7 months, while it
took 10 months to restore the very basic access to the Internet. Before the restoration,
Xinjiang was almost isolated from the outside world. However, that’s not the end of
censorship. Netizens are still strictly monitored, and emails with the so-called “sensitive
words” (minganci) are always blockaded. The author did an experiment on March 27th, 2014
and found that no email can be sent out as long as its content (including the attachment) has
the Chinese character “Xinjiang” if the Internet user is in Mainland China (not necessarily in
Xinjiang) and using Chinese email box, even though the attachment is only a soft copy of astatistical yearbook published by the authority.

Another good measurement of the level of authoritarian is the frequency of mass protests thatbroke out in Xinjiang. Quite counter-intuitively, I have to emphasize that the number of mass

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
31	
   Energytribune,	
  “Xinjiang	
  Enticement,”	
  see:	  http://www.energytribune.com/5028/xinjiang-­‐enticements#sthash.BMnWbjsu.8A4ZIX2B.dpbs.	
  Last	  accessed:	
  April	  5th,	
  2014.	
  32	
   “Report	
  on	
  Xinjiang	
  2012	
  Budget	
  Implementation	
  Situation	  and	  2013	
  Draft	  Budget	
  [xinjiang	
  2012	
  nian	  yusuan	
  zhixing	
  qingkuang	  he	
  2013	
  nian	
  yusuan	
  cao’an	
  de	
  baogao]”,	
  see:	  http://www.gov.cn/gzdt/2013-­‐02/19/content_2334747.htm.	
  Last	  accessed:	
  July	  8th,	
  2014.	
  
	
  

33	
  

Yin	
  Weiwen_51128231	
  protests in Xinjiang, and probably in many other provinces, is negatively related to thestrength of authoritarian rule. The reason is that collective activities are most worrisome for
the Chinese government, whose censorship program is aimed at curtailing collective action bysilencing comments that represent, reinforce, or spur social mobilization, regardless ofcontent (King et al., 2013). According to a report by Li and Tian (2014), Guangdong, which
is supposed to be the most “open” and “freest” province partly because of its proximity to
Hong Kong, has nurtured more mass protests in the past 13 years than any other province.
There have been 267 mass protests with more than 100 participants in the past 13 years inGuangdong. In contrast, at the same period, the number is 5 in Xinjiang. Bovingdon (2013;21-22) gives his explanation in this way: officials and public security personnel have kept atight lid on public protest in Xinjiang; as a consequence, most protest has been individual or
private. He also notices that the frequency of protests in Xinjiang was declining while they
were on a dramatic rise in the rest of China. Thus, it is reasonable to interpret the declining
frequency of mass protests in Xinjiang as a sign of strengthening social control andauthoritarian rule. Besides, we can also see many other implications for “repression”. For
example, in recent days, officials from courts of different ranks in Xinjiang have just signed acommitment letter, which requires more effort to eliminate “Three Evils”: terrorism,
separatism, and religious fundamentalism.33 Such policy is regarded as a shifting priority
from stressing development to stressing stability.

When more “repression” is introduced, one will see more authoritarian features in the regime.
That’s one of the causal links for the whole story: not every ethnic group benefits equallyfrom the resource exploitation, and the “loser” will choose to rise and challenge the “winner”.
The holder of natural resources may respond with more suppression, so that their dominantposition will not be threatened. This logic is also in concert with many formal models thatemphasize the “repression effect” in explaining the natural resource curse.

But that’s not the whole story. No regime can survive without any support from the people. In

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  

33	
   “Leaders	  in	
  Xinjiang	
  Courts	  Signed	
  a	
  Commitment	
  Letter	
  on	
  Social	
  Management	
  [xinjaing	
  fayuan	
  qian	
  zhongzhi	
  weiwen	
  zeren	
  shu],”	
  see:	  http://www.chinanews.com/gn/2014/03-­‐29/6007798.shtml.	
  Last	  accessed:	
  April	  5th,	
  2014.	
  
	
  

34	
  

Yin	
  Weiwen_51128231	
  the case of Xinjiang, the Chinese government not only suppresses the resistance of the
Uyghurs, but also uses patronage to improve the situation and appease the anger. Less than
one year after the July 5th riots, in May 2010, top central government and Communist Party
leaders held a “work forum” to set state economic and political objectives for Xinjiang. The
meeting marks the first work forum directed at the XUAR (authorities have held five similar
work forums to date addressing the Tibet Autonomous Region and, most recently, other
Tibetan autonomous areas of China). The forum stresses development and stability as dual
goals.34 In terms of economic and social development, some reform methods are raised. First,
19 provinces and municipalities, places in the rest of China that get particular benefits fromXinjiang’s oil and gas, have been designated as Xinjiang partners. They are required tocontribute 0.3 to 0.6 percent of their fiscal revenues from 2011 to 2020 to support Xinjiang’s
development. Starting in 2011 the region will receive more than $10 billion in financial aid
from this program. Second, producers of crude oil and natural gas in Xinjiang will be levied a
new 5 percent tax. This new tax system will be based on sales price instead of on volume as it
was before. The new tax system, which went into effect on June 1st 2010, is aimed atincreasing revenue for the local government and is part of the support package unveiled at thecentral work forum held in Beijing in May.35 CNPC's annual crude oil production in Xinjiang
is 18 million tons, while Sinopec produces 7 million tons each year. If the resources tax iscollected at 5 percent, CNPC and Sinopec, China's top two oil companies, will add 5 billion
RMB ($732 million) in tax revenue to the region annually as oil prices stabilize at $80 per
barrel.36 The central government expects that by increasing fiscal transfer and resource taxes,
the local governments in Xinjiang will have more funding to provide public goods, likeeducation, medical service, low-rent housing, etc. As a report by the Uyghur Human Rights
Project commends, the work forum has slightly realigned the previous Great Western

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  

34	
   Congressional-­‐executive	  Commission	
  on	
  China,	
  “Central	
  Leaders	
  Hold	  Forum	
  on	
  Xinjiang,	  Stress	
  Development	
  and	
  Stability	
  as	
  Dual	  Goals,”	
  see:	  http://www.cecc.gov/publications/commission-­‐analysis/central-­‐leaders-­‐hold-­‐forum-­‐on-­‐xinjiang-­‐stress-­‐development-­‐and.	
  Last	  accessed:	
  April	  5th,	
  2014.	
  35	
   Energytribune,	
  “Xinjiang	
  Enticement,”	
  see:	  http://www.energytribune.com/5028/xinjiang-­‐enticements#sthash.BMnWbjsu.8A4ZIX2B.dpbs.	
  Last	  accessed:	
  April	  5th,	
  2014.	
  36	
   Li	
  Woke,	
  “Xinjiang	  Reportedly	
  to	
  Pilot	
  5%	
  Tax	  on	  Gas,	
  Oil,”	
  see:	  http://www.globaltimes.cn/business/china-­‐economy/2010-­‐05/535762.html.	
  Last	  accessed:	
  April	  5th,	
  2014.	
  
	
  

35	
  

Yin	
  Weiwen_51128231	
  Development Drive (GWDD in short, xibu dakaifa in Chinese) policies when viewed fromthe grassroots. The new policies’ small shift has been toward more investment in humandevelopment and more spatially dispersed infusions of capital, which differs from the GWDD
large-scale investment in natural resources predominately located in the north of the region(Uyghur Human Rights Project Report, 2012). What’s more, the Xinjiang government also
tries to tackle the unemployment problem directly. For example, in state-owned firms ethnic
differentiation regarding job attainment does not favor ethnic minorities such as Uygur
workers, mainly due to the market economy. But in state “redistributive agencies” like public
institutions and work units (danwei), ethnic differentiation in employment and job attainment
is very limited and actually favors ethnic minorities. This situation reflects the fact that thestate’s affirmative action policy continues to benefit local ethnic minorities in certain parts ofthe state sector (Zang, 2010; Zhu and Blachford, 2012).

This is the “rentier effect” approach to explain the political natural resource curse, whichargues that resource-rich governments use low tax rates and patronage to relieve pressures for
greater accountability (Ross, 2001). But unlike the “repression effect” approach, the last stepin the causal link is not yet thoroughly clarified in our case: we still are not sure whether
fiscal transfer, resource tax reform and employment promotion for minorities are effective or
not in a corrupted regime;37 and if so, whether these methods can really relieve pressures for
greater accountability, thus the authoritarian regime can survive without substantial
democratization reform. Supporters for patronage approach assume that taxpayers tend to careless about democracy and political rights as the government can offer good subsidies. But
more field research is still needed to explore the political attitude and political culture in
Xinjiang, particularly among the Uyghurs, when they are offered so many good deals.

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  

37	
   Wu	
  and	
  Wang’s	  (2013)	
  recently	
  published	
  paper	
  finds	
  that	  transfer	
  dependency	
  negatively	
  affects	  expenditure	
  decentralization	
  in	
  Chinese	
  local	  governments.	
  Intermediate	
  governments,	
  i.e.	
  provincial	
  governments,	
  may	  have	  “grabbed”	
  central	
  grants	
  for	
  self-­‐interests.	
  In	
  other	
  words,	
  fiscal	  transfer	
  from	  the	
  central	  government	
  may	  not	  be	
  able	  to	
  reach	
  South	  Xinjiang	
  where	
  poverty	
  and	  income	
  gap	
  problem	
  is	
  the	  most	
  severe,	
  if	
  their	
  causal	
  inference	
  is	
  correct.	
  
	
  

36	
  

Yin	
  Weiwen_51128231	
  Chapter IV: Conclusion and Further Discussion

In Chapter Three the author developed a causal link in order to explain why a political natural
resource curse exists in Xinjiang. The whole logic can be generalized as follows: natural
resource abundance and resource exploitation attracts so many migrant workers from otherprovinces that local minorities, in particular, many Uyghurs youth, are deprived of
employment opportunity, since they cannot speak Mandarin Chinese fluently and are
disadvantaged in the job market; the unemployment problem is actually a form of
distributional inequality, which serves as an incentive for the Uyghurs to resist and challenge
the current regime, by means of mass protests and violence, including terrorist attacks; thegovernment responds with “carrot and stick”, imposing strict control over the society as well
as offering patronage; these methods will strengthen the authoritarian rule, but more fieldresearch is needed to clarify whether the Uyghurs will give up their appeals when patronage
is offered. The whole framework can be simplified as the following path graph (see Figure 6).

Natural	  resource	
  abundance	
  and	  resource	
  exploitation	
  in	
  Xinjiang

Distributional	
  inequality	
  between	  Han	
  and	  the	
  Uyghurs	
  against	
  background	
  of	
  marketization

Han-­‐dominated	
  government	
  responds	
  with	
  repression	  (repression	
  effect)	
  and	  patronage	
  (rentier	
  effect)Strengthening	
  of	
  the	  authoritarian	
  ruleThe	
  Uyghurs	
  rise	  to	
  challenge	
  the	
  authority

Figure 6: Path Graph of the Conclusion

A counter factual exercise based on empirical evidence in previous parts may be helpful in
	
  

37	
  

Yin	
  Weiwen_51128231	
  clarifying the role of natural resource and the one of ethnic tension in strengthening theauthoritarian regime. Obviously, if there were no natural resource abundance in Xinjiang,
ethnic tension between Han Chinese and the Uyghurs would still be prominent anyway. One
can refer to Bovingdon (2013: 174-190) for a detailed list of organized protests and violent
events in Xinjiang between 1949-2005, when most of the time energy development had beenabsent in the region, thus cannot explain many of these protests and violent events. It is the
suppression policy of CCP for years that should be blamed. The problem of natural resources
is, they exacerbate the problem: the regime becomes even less tolerant for challengers. If
Xinjiang were an independent country, or gained independence tomorrow, democracy andstability would not be likely to come either. Instead, we may have one more country in ourworld map suffering from ethnic conflicts and even civil wars caused by the struggle overresource revenue between two ethnic groups neither of which is in dominance, and may findthat the “Palestinization of Xinjiang” will come true as Wang Lixiong (2007; 41) predicts. Ina word, preexisting ethnic tension and ongoing resource exploitation jointly explain thecurrent situation.

This paper may have made both theoretical and empirical contribution in relevant fields. In
terms of theoretical debate, the author tries to incorporate the variable of ethnic politics in themechanism through which natural resource abundance can (not must) have a negative effecton democratization, and a positive effect on the survival of authoritarian regime. I emphasize
the tension between the “winner” and the “loser” in resource exploitation. And if one of theethnic groups is the “loser”, our logic would be more powerful in explaining the politicalcurse. As Ross (2001) suggests, if mineral wealth happens to be concentrated in a region
populated by an ethnic or religious minority, resource extraction may promote or exacerbate
ethnic tensions, as federal, regional, and local actors compete for mineral rights, and thesedisputes may lead to larger military forces and less democracy in resource-rich, ethnicallyfractured states such as Angola, Burma, the Democratic Republic of Congo, Indonesia,
Nigeria, Papua New Guinea, Sierra Leone, and South Africa. This mechanism can help us
understand why natural resource wealth tends to make civil war more likely to occur. On theother hand, the author also hopes that this paper can benefit us in understanding the ethnic
	
  

38	
  

Yin	
  Weiwen_51128231	
  conflicts in Xinjiang, which are now attracting more and more attention from scholars andpolicy makers. I agree with the mainstream argument among sociologists: it is the market thatis mainly responsible for the income gap and employment inequality between Han Chinese
and the Uyghurs. I’m not claiming that the Chinese government has nothing to do with thecurrent situation, I’m raising one important point that is always neglected by human rights
activists who emphasize too much on state discrimination or religious persecution, which ishardly supported by empirical evidence.

The literature of natural resource curse is not limited to explaining the political effect. Indeed,
as we mention in Chapter Two, some empirical researches present a negative effect ofresource stock on the economic growth in many countries. The typical country-level case is
Nigeria (Sala-i-Martin, X. and Subramanian, 2003). However, in our case of Xinjiang, theeconomic development has not been affected at all, at least in the short term (see Figure 5). I
would argue that fiscal transfer from other more prosperous provinces and investment fromthe central government have mitigated the negative effect on economic development. One of
the major causes of an economic curse is the crowd-out effect of resource exploitation:
resource abundance attracts too much governmental investment that is supposed to be used inpromoting the development of private sectors and long-term economic growth (Rosser, 2006).
Xinjiang can avoid the economic tragedy of Nigeria because it has the financial support fromthe central government. Moreover, those “patronage” methods that are aimed at improving
the lives of poor Uyghurs may also generate some “positive externality”: an economy canalways benefit from a higher education level of employees. Therefore, there’s no economic
curse in Xinjiang at this moment, but there is indeed a political curse of natural resources
instead.

After presenting an explanation for the natural resource curse, the author would propose somesuggestions to turn the curse into a blessing. In terms of avoiding a negative effect foreconomic growth, Frankel (2010) has done a very thorough literature review and raises anumber of feasible policy solutions. Though there’s still no conclusion among scholars about
how to avoid the negative political effect of natural resource, in our case of Xinjiang, there
	
  

39	
  

Yin	
  Weiwen_51128231	
  are still some policies available to improve the situation, at least to save Xinjiang from moreturmoil. As far as we understand that the unemployment problem plays a key role in thecausal link, once we solve this problem among the Uyghurs, it is expected that the resistanceof the minorities can be softened. The inability of many Uyghurs to speak Mandarin Chinese
directly results in their less competitiveness in a job market, where efficiency instead ofequality is the ultimate goal for many companies. Therefore, unlike many human rights
activists and Uyghur independence activists, I argue that promoting the usage of Mandarin
Chinese will be beneficial for anyone in the job market. In fact, the communists’ language
policy before the 1990s should be responsible for the poor Mandarin Chinese knowledge ofmany Uyghurs youth. In Mao Zedong’s era, the Uyghurs were not required to learn Mandarin
but Han cadres in Xinjiang were required to learn minority languages. Such language policy
continued under Hu Yaobang and Zhao Ziyang’s liberalization. As Dwyer (2005) puts it, the1980s were a period of enormous expansion of support for minority languages, with central
and local governments establishing and revising writing systems and creating many new
language materials and programs. Up to now the Uyghurs are not obliged by any legal rules
to study Mandarin in school. I’m not saying that the current “bilingual education” is perfect,
which may tilt too much towards Han Chinese as a survey shows;38 I am arguing thatoffering a chance for the Uyghurs to learn and speak Mandarin Chinese, particularly thosefrom rural areas, is beneficial for them in the job market. This is what the Chinese
government is focused on in recent years.39 Of course, it would be better if Han Chinese in
Xinjiang can follow some good measures in Mao era and learn Uyghur language while
Mandarin is promoted by the government, as this can mitigate ethnic estrangement between
Han Chinese and the Uyghurs to some extent, and appease those who feel offended by thegovernment’s language policy.

This paper employs the case study method to clarify the causal mechanism of natural resource

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
38	
   “A	  Survey	
  on	
  the	
  Attitudes	
  of	
  Uyghurs	
  University	
  Students	
  in	
  Beijing	
  towards	
  the	
  Bilingual	  Education	
  Policy	  in	
  Xinjiang	
  [zaijing	
  weiwuerzu	
  daxuesheng	
  dui	
  xinjiang	
  shuangyu	
  jioayu	
  de	
  taidu	
  diaocha],”	
  see:	  http://www.peacehall.com/news/gb/china/2011/04/201104290545.shtml.	
  Last	  accessed:	
  April	  5th,	
  2014.	
  39	
   “Labor	
  Redundancy	
  Makes	  it	
  More	  Difficult	
  for	
  Minorities	
  to	
  Find	
  a	
  Job	
  [zhongguo	
  laodongli	
  guosheng	
  xinjiang	
  shaoshuminzu	
  jiuye	
  nan],”	
  see:	  http://www.voachinese.com/content/a-­‐21-­‐w2006-­‐10-­‐19-­‐voa29-­‐58455377/1089506.html.	
  Last	  accessed:	
  April	
  5th,	
  2014.	
  
	
  

40	
  

Yin	
  Weiwen_51128231	
  curse in Xinjiang, and possibly elsewhere. The author is not proposing a deterministic
explanation for Xinjiang’s current situation, but hopes to stress the complexity of its causes:
no regime is born evil, but certain economic and social factors can affect the regime throughuneasily observed mechanism. Thus, for the future research agenda of resource curse, ethnic
tension and distributional inequality should be included as major independent variables inlarge-n empirical studies.40 The argument in this paper is not counter-intuitive at all. It is
common sense that if the Uyghurs are excluded from sharing the benefits of economic
development that is mainly driven by energy resource exploitation, it is impossible tomaintain the stability of Xinjiang in the long term, let alone a more democratic rule.

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  

40	
   Some	
  scholars	
  have	  started	
  to	
  do	
  so.	  For	
  example,	
  Morelli	
  and	
  Rohner	  (2014)	
  show	  that	
  war	  is	
  more	  likely	  to	
  happen	
  when	  resource	
  and	
  group	
  concentration	
  are	
  high,	  based	  on	
  country	
  level	  and	
  ethnic	
  group	
  level	
  data.	
  
	
  

41	
  

Yin	
  Weiwen_51128231	
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