Crouching Dragon, Hungry Tigers: China and Central Asia

I. INTRODUCTION From a historical and ethnic point of view, the Xinjiang-Uigur Autonomous Region (XUAR) of the People's Republic of China (PRC) is part of Central Asia (see Box 1). Nowadays Xinjiang is also one of its most prosperous parts. So with the disappearance of the Sino-Soviet dispute and the likely inclusion of the all the states of the area into the World Trade Organization, economic reintegration of Eastern Turkestan (one of the names given to Xinjiang, also sometimes spelled Sinkiang) into Central Asia could provide an important contribution to the growth of all the states in the region. After all, an increasing share of Asian trade is intraregional, and after three years of adjustment Southeast Asia has now returned to its former rapid growth. Given its remoteness from the coast, an unfavorable position (Mellinger et al., 2000), Central Asia (including the XUAR) would gain from more intensive intraregional trade. Energy and mineral trade again appear promising. But these opportunities for Central Asia and Xinjia ng in particular presume that ethnic conflicts can be moderated, suppressed, or resolved. II. UNEVEN PROSPERITY National income per capita in the XUAR exceeds that of most of its neighboring Central Asian states. (See Table 1, which largely ignores Tajikistan with gross national product (GNP) per capita of $330 in 1997, according to the World Bank, and Turkmenistan with $630 because of their lesser importance to XUAR.) Xinjiang's relative prosperity reflects the fact that all the post-Soviet states of the area suffered a "transition depression" during the 1990s, whereas the PRC continued to grow at 8% per year. Indeed, during the last dozen years Xinjiang has grown faster than the Chinese economy as a whole-at least 10% annually in real terms. Chinese statistics indicate that Xinjiang's gross domestic product (GDP), expressed in current prices, slightly exceeds the all-China average--with 1.4% of the country's population, Xinjiang produces 1.5% of China's GDP (Wu, 2000). Xinjiang's above-average product per head appears to be owing to heavy capital investments in both tangible and human capital, with total factor produ ctivity fairly low relative to other provinces (Testas, 2000). Gross capital formation in 1998 for the XUAR was 1.9% of China's total. The PRC has regarded the XUAR as a sensitive minority border area with important energy resources that must be controlled militarily, colonized by Han cadres, and promoted economically. Xinjiang gained greater consideration in the PRC's eighth Five-Year Plan (1991-95) owing to the influence of its local Han officials and transnational companies interested in investments in the province (Christoffersen, 1993). As in most of the rest of inland China, economic transition has been gradual in Xinjiang. State-owned enterprises still predominate outside trade and services. With many of these plants making losses and retaining unproductive labor, provincial authorities receive sizable subsidies from central government funds. These funds also supported gross investment rates of about 42% of domestic expenditures in 1995, mostly through state-owned banks. Of course, the Xinjiang average income does not necessarily hold for the titular minority, the Uigurs, nor for the million Kazaks or four dozen other non-Han peoples residing in the republic. A traditionally nomadic Turkic people, the Uigurs are closely related to the Kazakhs. These larger minorities, as well as many Han, are nominally Muslims. Although figures for ethnic minorities are not available, it is clear from the author's own first-hand observation that the Han population have distinctly higher incomes. On the other hand, quite a few urban Uigurs have assimilated to Chinese language and culture and are getting ahead. According to Paul Henze (1995), an experienced traveler to the area, "Uigurs appear to be a majority among police and lower officials, and are moving into more senior positions. …