China has unveiled ambitious plans to establish a free trade zone in the northwestern region of Xinjiang, a move seen by many as an effort to bolster its economic influence and counterbalance Western sanctions. This plan is closely tied to President Xi Jinping's larger vision for the Belt and Road Initiative (BRI), an expansive project designed to enhance trade connectivity between China and Europe.
Amid allegations of human rights abuses against the Uyghurs, a predominantly Muslim ethnic group in Xinjiang, Western countries have placed economic restrictions and condemnations on China. The U.S., in particular, has imposed sanctions on entities like the Xinjiang Production and Construction Corps citing human rights concerns.
In contrast, Beijing's new blueprint showcases the region's potential and casts it in a positive light, aiming to strengthen ties with its neighboring countries. "It is necessary to firmly establish the overall national security concept...and effectively strengthen the construction of risk prevention and control systems," a statement from China's cabinet read.
This vision for Xinjiang goes beyond mere trade. The Chinese government envisions the area as a central hub for its Silk Road Economic Belt, a component of the BRI. With a planned area of 179.66 square kilometers, the free trade zone will span crucial nodes like Urumqi, Kashi, and Horgos, which play pivotal roles in China-Europe freight train operations.
Each area within the proposed trade zone will have its distinct focus. Urumqi, leveraging its geographical edge, plans to embrace global trade and high-tech sectors like bio-pharmaceuticals and renewable energy. Meanwhile, Kashi will position itself as a bridge to Central and South Asian markets with a focus on export-oriented sectors, including textiles and electronics assembly. Horgos is pegged to flourish as a hub for modern services such as cross-border logistics and financial services.
Analysts believe this new initiative is not merely an economic one. Veteran economist Tian Yun elaborates, "To the south, it will connect the supply chain of Xinjiang to eastern coastal areas... To the north, it will link Xinjiang with Central Asia and West Asia, unleashing prodigious regional economic benefits."
Trade data supports this sentiment. In the first eight months of 2023, Xinjiang's foreign trade skyrocketed, showing a 51.2% year-on-year increase. Notably, its trade with Central Asian countries accounts for a staggering 80.6% of the region's total trade value.
However, the plans for Xinjiang don't end with boosting regional connectivity. Authorities are also keen on making the yuan a more prominent currency for international trade, reducing the current dominance of the U.S. dollar, especially in commodity trading.
China's bold move in Xinjiang is seen by many as a robust response to Western critiques. As Tian stated, "A vigorous Xinjiang economy...will serve as the best evidence debunking Western hype and smears."
