China’s Xinjiang Seeks New Alliances with Pakistan and Central Asia to Counter US Sanctions

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Tejaswini Deshmukh
Tejaswini Deshmukh
Intrigued by the intersection of finance and technology, I delve into the latest RegTech advancements. With a keen eye for unraveling the complexities of compliance, I dissect current financial news and frauds.

China’s Xinjiang region is making a significant push to strengthen its connections with Pakistan and Central Asia. This move is part of a strategy to counter the economic impact of sanctions imposed by the United States. Xinjiang, located in China’s far west, has faced criticism from the West over human rights issues, especially regarding its treatment of the Uygur Muslim population. In response, the region is focusing on expanding its ties with neighboring countries, hoping to boost trade and economic cooperation.

One of the key developments is the opening of the Khunjerab port, which is the only border crossing between China and Pakistan. In the past, this port would close every winter due to harsh weather conditions, but starting this year, it will operate year-round. This change is expected to boost trade between the two countries. In 2023, over 11,000 vehicles and nearly 41,000 tons of goods passed through the port during the open months. This represents a significant increase compared to previous years, highlighting the growing importance of this border crossing.

Growing Cooperation with Central Asia

Xinjiang is also focusing on building stronger relationships with Central Asian countries, particularly Kazakhstan, through joint projects and agreements. In late November, local officials from Xinjiang met with counterparts from Kazakhstan’s Zhetysu region. During this meeting, they discussed a variety of topics such as improving infrastructure, tourism, agriculture, and security cooperation. The meeting also focused on managing cross-border trade and regulating markets. The two sides signed a memorandum to promote tourism, aiming to attract more visitors to the region.

A key location in this cooperation is Khorgos, a major port between China and Kazakhstan. Khorgos has become a symbol of cross-border collaboration, with both Chinese and Kazakh citizens able to shop and hold business talks without needing visas. The port is also home to China’s first cross-border cooperation center, allowing residents of both countries to engage in trade and business activities in a shared space.

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Xinjiang’s governor, Erkin Tuniyaz, emphasized the region’s desire to expand cooperation with Kazakhstan, particularly in the fields of trade, tourism, security, and agriculture. This strengthens the economic and political ties between the two countries and opens up new opportunities for Xinjiang to engage with its neighbors beyond the reach of Western sanctions.

Strategic Importance of Xinjiang for China’s Belt and Road Initiative

Xinjiang plays a vital role in China’s Belt and Road Initiative, a global plan to improve trade and infrastructure by connecting China with countries across Asia, Africa, and Europe. The region’s location makes it a key gateway for trade between China and Central Asia. As Xinjiang is rich in natural resources, including minerals and land for farming, it has become a valuable area for companies seeking to expand their business into Central Asia.

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The Belt and Road Initiative relies heavily on cross-border cooperation, and Xinjiang is central to connecting China with its neighbors in Central Asia. Xinjiang’s trade with countries like Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan has been growing rapidly. In 2023, the total value of imports and exports between Xinjiang and these countries reached 283.67 billion yuan, a 50% increase from the previous year.

However, there are challenges to expanding trade, as both China and Central Asian countries are cautious about facing secondary sanctions from the West. This has made them careful about growing their economic ties too quickly. Despite these concerns, the importance of Xinjiang’s strategic location and its role in China’s global trade plan continues to grow.

In addition to trade, Xinjiang is pushing forward with projects like the China-Pakistan Economic Corridor (CPEC), a key component of the Belt and Road Initiative. However, this project has faced challenges, including terrorist attacks targeting Chinese companies in Pakistan. For example, in October, a suicide bombing in Karachi killed two Chinese citizens. This attack, claimed by a separatist group, highlights the security risks involved in some of these international projects. Despite these challenges, China and Pakistan are working together to enhance security, holding joint counterterrorism drills to protect Chinese personnel and businesses.

Through these efforts, Xinjiang is not only aiming to build stronger relationships with its neighbors but also working to offset the effects of international sanctions and position itself as a central player in global trade.

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