Security clampdown in China inhibits business

URUMQI, CHINA: The economy of the vast Xinjiang region in far western China is officially growing at a robust pace, faster than the country as a whole.

That is largely thanks to big investments in infrastructure from Beijing as the region – with its links to much of central Asia – is critical to Chinese President Xi Jinping’s new Silk Road initiative.

But traders, business owners and residents in Xinjiang’s capital, Urumqi, are seeing little benefit from the central government’s cash injection, according to about 20 interviews with people in the city.

One major reason for that, they say, is due to tightened security as the Chinese government seeks to control one of its biggest domestic threats.

Beijing accuses separatist extremists among the Muslim Uighur ethnic minority of plotting attacks on the ethnic Han majority in Xinjiang and other parts of China, following a series of violent events in recent years.

As a result, there are roadblocks and stringent security checks across the region, including at restaurants, hotels and shops, making it slow and frustrating to move around.

The new Silk Road, officially known as the Belt and Road initiative, is Xi’s signature foreign and economic policy which aims to increase economic and political ties through roads, railways and other projects that link China to Central Asia and beyond.

But the contrast between that ambition and the views at street level in Urumqi reflects the difficulty Beijing faces in trying to balance security against its other top priorities.

This is particularly the case as China is determined to avoid any trouble ahead of a critical Communist Party congress in the autumn at which Xi is expected to consolidate his power, and as it faces the threat from some Uighurs who have become battle-hardened Islamic State fighters in the war in Syria and Iraq and may return home.

The impact of the clampdown is clear at the Frontier International Trade Centre in Urumqi, where padlocked stores outnumber traders.

“Business became really bad last year. I’ve got nothing to do except a stock-take,” said Wei Chun, a shoe trader, surrounded by piles of high-heels.

She blames poor sales partly on the impact of sluggish economies in neighbours Kazakhstan, Kyrgyzstan and Tajikistan, among the eight countries with which Xinjiang has borders.

But she also says the Chinese authorities’ obsession with keeping Xinjiang secure at all costs is making it tough to do business here.

“It’s very difficult to send and receive deliveries because of the security crackdown,” she said, complaining that authorities will often shut down the delivery system for “security reasons”.

The Xinjiang government declined to make officials available for comment for this article. It also did not respond to a series of faxed questions.

Xu Bin, the head of the Xinjiang government’s statistics bureau, told reporters in February that its growth – which was 7.6 per cent last year - is mostly fuelled by fixed asset investment. But he then added: “Xinjiang faces slowing economic growth, falling industrial prices, companies are feeling the pain of falling profits and the growth rate of our tax revenue has dropped off.”

Xinjiang’s trade with other countries fell in the first quarter of this year, according to the customs bureau, and is still below the level it recorded in the first quarter of 2013, the year that Belt and Road launched. — Reuters

Business became really bad last year. I’ve got nothing to do except a stock-take. Wei Chun, shoe trader