In China’s Xinjiang, a region plagued by ethnic strife, the growth of immigrant-dominated settlements is adding to the tension

Settlers in Xinjiang

Circling the wagons

In a region plagued by ethnic strife, the growth of immigrant-dominated settlements is adding to the tension

May 25th 2013 | 38th REGIMENT, SOUTHERN XINJIANG |From the print edition


MANY hours’ drive along what was once the southern Silk Road, through a featureless desert landscape punctuated by swirling dust-devils and occasional gnarled trees, a curious sight eventually confronts the traveller: row upon row of apartment blocks with vivid red roofs, as if a piece of Shanghai suburbia has been planted in the wilderness (see picture). Following the military-style nomenclature of immigrant settlements in China’s far west, it calls itself 38th Regiment. It is home to thousands of people, in a spot where just a few years ago there was nothing but sand.

The town is the latest addition to a vast network of such communities in the Xinjiang Uighur Autonomous Region, China’s biggest province by land area and also its most ethnically troubled. Neighbouring Tibet has long been roiled by ethnic tension, too, but rarely has it witnessed the kind of violence that has troubled Xinjiang: a low-level insurgency involving ethnic Uighurs whose Muslim faith and Central Asian culture and language set them apart from the Han Chinese who dominate places like 38th Regiment. On April 23rd, 21 people were killed near Kashgar during an encounter between police and alleged separatists. An explosion of inter-ethnic violence in 2009 in the regional capital, Urumqi, that left nearly 200 dead, by official reckoning, exacerbated the divide. The expansion of the settlement network is deepening it further.To use its full name, the 38th Regiment of the 2nd Agricultural Division is part of the Xinjiang Production and Construction Corps. This state-run organisation, usually referred to as the bingtuan (Chinese for a military corps) controls an area twice the size of Taiwan, broken into numerous parts scattered around the province (see map). A few bits are city-sized. Most are more like towns or villages. Of their total population of more than 2.6m people, 86% are ethnically Han Chinese. In Xinjiang as a whole, in contrast, Han officially make up just over 40% of the 22m inhabitants. The rest are Uighurs and a few other ethnic groups.

Guns and ketchup

The bingtuan operates its own schools, hospitals and newspapers. It has its own courts, police and prisons as well as a 120,000-strong militia force which is the reason for its military-sounding names (though bingtuan towns look no more military than any others in China). It produces nearly one-sixth of Xinjiang’s GDP (see chart), including 40% of its cotton (one of the region’s main cash crops). The corps also prides itself on being one of the world’s biggest makers of tomato ketchup. Its exports made up more than 17% of global trade in ketchup in 2009, according to Sun Yanping, a Xinjiang-based economist. It also runs hundreds of enterprises in everything from processing dates to coalmining. Through its commercial arm it runs more than a dozen listed companies, one of which is Suntime International, described by China’s agriculture ministry as the biggest wine producer in Asia.

Many Uighurs are resentful of such a large, economically powerful and politically autonomous entity in Xinjiang that employs so few of their own ethnic group. To make matters worse, the bingtuan partly justifies its existence by saying it is needed to maintain stability in Xinjiang. That is party shorthand for keeping Uighurs quiet.

The bingtuan—eager to preserve its power at a time of growing criticism in China of the “vested interests” of large state-owned concerns—is at pains to convince ordinary Chinese that it plays a vital role. A museum in Shihezi, a city in northern Xinjiang controlled by the corps, displays a photograph of members of the bingtuanmilitia armed with rifles, crouching behind a wall during a 1990 uprising by Uighurs near the city of Kashgar. The militia, says the caption, played an important role in crushing the unrest. Amnesty International, a human-rights group, says 50 Uighurs were killed in the incident, including some who were shot while running away.

The military connections of the bingtuan give it swagger. “I’ve got a dozen big guns and a company of artillery troops; what about you?” the Oriental Morning News, a Shanghai newspaper, quoted the manager of a listed bingtuan firm in Shihezi boasting in 2010 to a visitor. His company, Xinjiang Tianye Group (whose businesses include ketchup-making) does indeed have a militia force of artillerymen.

The paramilitary role of the corps is just the latest in a series of attempts to settle Xinjiang dating back to the region’s conquest by China’s Qing dynasty emperors in the 18th century (many of the settlers then were Manchu soldiers). The bingtuanitself was founded in 1954, consisting mainly of demobilised Han soldiers. They were ordered to turn desert areas into farmland while keeping their guns to fend off potential incursions by the Soviet Union. In 1953 Han Chinese formed less than 10% of Xinjiang’s population. The corps, however, helped to even up the balance. Many more demobbed soldiers, prisoners, political malcontents and women (to keep the men happy and sustain the population) were sent to join the settlers.

In 1975, a year before he died, Mao Zedong abolished the corps, which was in tatters due to factional feuding in the Cultural Revolution and the ravages of central planning. In 1981 Deng Xiaoping re-established it, though there was no obvious economic reason for doing so. Grain and cotton output from former bingtuan farms had been recovering rapidly. But Uighur unrest, including what officials saw as anti-Han violence, had broken out in several places. Deng said the bingtuan should be at the “core of stabilising Xinjiang”.

Worried they might look west

After the collapse of the Soviet Union in 1991 China fretted that the newly independent Central Asian republics might inspire support in Xinjiang for an independent state of East Turkestan. Uighurs twice declared such a state in parts of Xinjiang in the 1930s and 1940s, when China was in chaos before the Communist Party’s victory in 1949. Officials also feared that radical Islam might spread into Xinjiang. American forces captured more than 20 Uighurs in Afghanistan in 2001, and China began alleging that Uighur separatists were forming links with al-Qaeda.

Bingtuan officials have been happy to play on such fears. Zhang Qingli, then Xinjiang’s deputy party chief, said in 2004: “As long as Xinjiang has ethnic separatist forces making a clamour and extremist religious forces kicking up a row, the bingtuanwill exist forever.” He called critics “bad people” and “hostile Western forces”.

The corps does not spell out how the existence of a Han-dominated group based in Han-dominated enclaves with an ill-trained militia can help reinforce stability. Its aim is to have “emergency-response” units in every one of its nearly 180 “regiments”, but professional security forces are usually the first to be called out. Wang Lixiong, a Beijing writer known for his provocative analysis of western China, described the corps in a 2007 book (banned in China) as an “autonomous Han province” within Xinjiang. He said it was alienating itself from local governments in the region (which have no jurisdiction over bingtuan settlements in their areas) and from Uighurs. “Solving the Xinjiang problem is inseparable from solving the bingtuan problem,” he wrote.

Party leaders in Beijing appear to disagree. The 2009 rioting in Urumqi was clearly a shock to the central leadership. The following year it convened a meeting in Beijing to discuss ways of dealing with Xinjiang. Hu Jintao, president of China at the time, praised the corps for fulfilling its mission as a “mighty construction army” and announced that the bingtuan should be as much the focus of direct aid from richer provinces as other parts of Xinjiang.

Helped by this, the bingtuan has enjoyed a revival. It has called for 15% annual GDP growth in areas it controls between 2011 and 2015, compared with growth of 10% a year for Xinjiang as a whole. This spurt is being helped by what the corps calls “leapfrog development”: an urbanisation drive that is transforming the bingtuan’s hitherto agriculture-led economy, spurring on private enterprise and creating a frenzy of construction. Though the aim is to strengthen stability, it could do the opposite, as it boosts Han migration and exacerbates an already conspicuous racial divide.

This is apparent in Shihezi, the bingtuan’s showcase. Over the past year it has begun to build a satellite district. The grey shells of dozens of apartment blocks have sprouted on the dusty plain near the foothills of the Tianshan mountains. Officials say that by 2015 the new district’s population will reach 100,000. By 2030 it will be 350,000. Some will relocate from the old city, but many will be newcomers from farther east, attracted by work in new factories. Of Shihezi’s current population of 640,000, 95% are Han. Few expect that ratio to change much.

Manifest destiny

In southern Xinjiang, where Uighurs are still usually in the majority, the bingtuan is extending its reach: creating new settlements or upgrading existing ones. In 2004 it formed 224th Regiment in the desert about 75km (45 miles) west of Khotan, a city regarded by officials as a hotbed of Uighur separatism. The regiment now has a permanent population of 12,000, of whom 98% are Han (though Uighurs help pick its red dates at harvest-time). In 2010, 38th Regiment was launched. The town’s population has already grown from nothing to more than 4,800. Its aim is to triple that number. New residents come from the central province of Henan and from communities in neighbouring Gansu province whose villages were damaged by an earthquake in 2008. Some are given a new flat and land as an incentive to move. The bingtuan has spent hundreds of millions of dollars bringing water from the Molcha River 80km away. “I hope to live here for another 20 years,” says a young Han teacher with kibbutznik zeal. No Uighurs are to be seen.

The 38th Regiment (which also plants dates) describes itself as strategically located on a route into southern Xinjiang. In August it formed a militia battalion, which has been conducting counter-terrorism drills. It might do better to consider the impact of resettling Uighur nomads into a separate cluster of new houses a kilometre away. Even in the vastness of the Taklimakan desert, the divide is growing.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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