Select Committee on Foreign Affairs Written Evidence

Written evidence submitted by Dr Caroline Hoy, Department of Urban Studies, University of Glasgow

  1.  Significant changes have occurred in Chinese society since the initiation of the reform programme at the end of the 1970s. Some of the social and economic changes have undoubtedly benefited many in the population. However, significant disparities are appearing between those who have benefited from the reforms and those who have not. One of the most significant of these divisions is a geographical one between the developed east coast and the west of the country. The north-western provinces of the country represent a particular challenge as energy, ethnic and development interests collide, especially in the province of Xinjiang.

  2.  The Chinese government has recognised that these social and economic divisions could lead to social instability, and in 2000 established the Western Development Initiative also known as the "Go West" programme. This was also a response to the process of national fragmentation that had taken place in the ex-USSR and Eastern Europe in the 1990s. Twelve provinces have been targeted in this campaign: Gansu, Guizhou, Ningxia, Qinghai, Shaanxi, Shanxi, Sichuan, Tibet, Yunnan and Xinjiang. One of the major aims of the Go West initiative has been the construction of major infrastructure projects such as an electricity network and the West-East gas pipeline. Environmental protection, the conservation of vulnerable water resources, economic restructuring, the development of educational opportunities, and human capacity are also part of the programme. Problems exist preventing fulfilment of the project especially in terms of funding. The existence and extent of corruption is also a problem and results in the diversion of significant amounts of funds targeted for capital investments and other activities.

  3.  Ethnic relations within China are important as a result of the potential for unrest especially in provinces that lie along international borders. Ethnic identity is complex and fluid. The Chinese government uses a system of ethnic nationality status that results in ethnic identity being subsumed to the Chinese state. This system also allows for negotiation and development of identity and position within Chinese society. Since the 1990s greater investment has taken place in areas of China in which ethnic minorities are particularly represented as a response to the restructuring of Turkic/Muslim nations to the west of China's borders.

  4.  The Vice Minister of Foreign Affairs and Secretary General of the Shanghai Cooperative Organisation, Zhang Deguang has made specific reference to the "unique geopolitical advantage" of Xinjiang Uighur Autonomous Region (XUAR). However, as a result of its strategic geopolitical position, comparative wealth of resources and multi-ethnic demography the region also represents security concerns for the Chinese government.

  5.  The XUAR is a particularly complex area and the only provincial level administrative region in which the Han Chinese do not dominate demographically. The Han Chinese make up 41% of the population and the Uighur, a Turkic-Muslim group, 45%. Other ethnic nationalities in the region include the Kazak, Hui, Kyrgyz, Mongol, Dongxiang, Tajik and Xibe. Inter-ethnic relations, not just between the Han and the Uighur, but also between other population groups are problematic. State-sponsored migration of Han Chinese to the province since 1949 has completely changed the demographic balance in the province and has been resented by the indigenous ethnic population. Migration is continuing to change the relationship between population groups as, for example, Uighurs migrate away from the region and informal migration of Han from Sichuan and other provinces, seeking economic opportunities absent in their own regions, continues.

  6.  The XUAR is characterised by uneven development, urbanisation and inequality in benefits and financial investments. There are also significant health problems in Xinjiang including, but not limited to HIV/AIDS, that are compounded by the poor health infrastructure, especially in rural areas in which most of the ethnic population live, and the high cost of treatment. These inequalities are felt particularly strongly by the Uighur population that has concerns about their position, opportunities and issues around human rights, religious freedoms, political representation, economic development, migration and access to education and training.

  7.  The Muslim communities in Xinjiang are not isolated and are linked to the Islamic communities in Central Asia and beyond. The Chinese state is apprehensive about the nature of religious practices in Xinjiang and the spread of Wahhabism. As a result of the connections not just between religious belief and ideological independence from the state, religion and terrorism, but also to the further question of cession by Xinjiang from China, the Chinese government controls religious practices in Xinjiang to a high degree. This has created further strains between the Chinese government, the Uighur and other ethnic populations.

  8.  Separatists are active within Xinjiang and while some are recognised as having engaged in acts of terrorism their numbers are small and the movement is divided. Large numbers of people in Xinjiang have been held for security reasons by the Chinese Government.

  9.  The Xinjiang Production and Construction Corps (XPCC) was created from de-mobilised members of the People's Liberation Army in the 1950s and is important in the province for two reasons: its control over agricultural production and the role the organisation plays in provincial stability. Much government investment into Xinjiang is channelled through the XPCC and it is a key route for Han migration into the region.

  10.  China is the second biggest user of oil after the United States and has been a net-importer of oil since 1993. China's economic future is dependent on secure and increasingly supplies. The country's need for energy could impact negatively on international demand and consequently, international relationships.

  11.  National domestic energy resources are small and have been exploited in north-western China since the 1980s. It is difficult to accurately address the extent of energy reserves but the IEA currently estimates China to have reserves equalling 18.26 billion barrels of oil. These are not significant in global terms and not all reserves may be recoverable. As a result, China has been seeking long term international energy exploitation opportunities and supply routes that avoid vulnerable points such as the Malacca Straits.

  12.  In terms of energy, China now has interests in Iran, Sub-Saharan Africa, Venezuela and Azerbaijan amongst others. The Chinese state failed to buy into the US market in 2005 but succeeded in buying the Canadian firm Petro-Khazakstan in October 2005 through the Chinese National Petroleum Corporation (CNPC). CNPC has been a key player in the development of the energy industry both domestically and internationally along with SINOPEC and CNOOC. All are state owned oil companies. CNPC is a 50% investor in a China-Kazakhstan oil pipeline that started pumping oil in December 2005.

  13.  One of the most notable developments in Central Asia relations has been the Shanghai Cooperation Organisation (SCO) that was formed in 2001 from a group known as the "Shanghai Five" established five years previously. It consists of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan, and has formal contact with Afghanistan. It was originally established to discuss border disputes but expanded to act as a forum for counter-terrorism and the development of strategic interests. Better relations with Kazakhstan has allowed China to expand its energy interests more widely within Central Asia and invest in exploration in the Caspian Sea. There are concerns that counter-terrorist activities, associated with the expansion of relations through the SCO, are being used to suppress Uighur opposition groups in the region. China has signed extradition treaties with both Kazakhstan and Kyrgyzstan that employed to extradite Uighurs to China.

  14.  Significant reserves of energy exist in Central Asia but these are not uniformly distributed and the region lacks the appropriate distributive infrastructure. This has not gone unnoticed. In November 2005 the Electricity Regulators Forum (CMERF) was formed by Azerbaijan, China, Kazakhstan, Kyrgyz Republic, Mongolia, Tajikistan and Uzbekistan to examine and share lessons from energy provision and re-structuring in this industry.

  15.  Despite the existence of bodies such as SCO and CMERF China, as the Kazakhstan example illustrates, often prefers to engage in bi-lateral energy negotiations. There are wider concerns in Central Asia, which extend to Russia, about the extent to which China is seeking access to energy resources and the consequent impacts on geo-political relationships. Regionally, China is also in competition with Pakistan, India and Japan. Additionally, the US has voiced opposition to China's expansion into the energy markets in Central Asia. However, it is also true that co-operation over oil, as in the case of the Kazakhstan-China pipeline where Russia is making up the current deficit in supply, may lead to more positive outcomes in the region.

  16.  Environmental pollution is a serious and increasing problem in China and environmental quality is likely to be further compromised with growth-oriented government policy, eg encouraging the purchase of private cars. Such policies will place further demands on the energy market. Continued economic development will further stretch resources and the temporary industrial shut downs in 2005 may become more common, damaging production. China should be encouraged to conserve resources, develop alternative energy industries and to share the benefits of economic development more widely across the country as a matter of urgency.

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Prepared 13 August 2006