Sino-Pak Policy: Carrot and the Stick

Every May, Sirbuz Khan, 26, makes his way north along the Karakorum Highway from Islamabad and spends the next six to seven months moving around China's Xinjiang Uighur Autonomous Region buying silk for his family's cloth business.

Business is good – for every five meters of pure white silk Khan buys, he can make a profit of 800 rupees selling suits and dresses to the Indian market. Ali Hussein, 27, also from Islamabad, operates a trucking company out of Urumqi, capital of Xinjiang. His company transports as much as 100 tons of goods per month through the Karakorum Pass to Rawalpindi and west to Tashkent, capital of Uzbekistan, for as long as the trading season lasts.

"We pay much less in taxes here," said Hussein. "If it were not for winter, when the pass closes, I would live here all year."

A series of agreements signed between China and Pakistan last November and this spring involving Preferential Trade, a proposed Free Trade Zone, permission for Pakistani cargo trucks to pass through China on their way to Central Asia and Pakistan's decision this week to approve construction of a joint Sino-Pak nuclear plant highlights a strategic relationship that is one of the most dynamic in South Asia.

Sino-Pak trade reached $2.4 billion last year – meager when compared with Sino-Indian ($7.5 billion) and Sino-U.S. ($126 billion), but substantial when considering Xinjiang's growth rate and China's goals for the province.

Xinjiang reached a record high $3 billion in foreign trade last year, up 49% from 2002 and also registered the highest growth rate in the nation in terms of exports, up 85% to $1.35 billion.

China's Preferential Trade Agreement with Pakistan went into effect in January 2004. This agreement guaranteed concessions for 800 Pakistani goods, ranging from 27% to 0% tariffs and similar concessions for 200 Chinese goods. The size, location and scope the proposed Sino-Pak Free Trade Zone will be finalized after the completion of the Gwadar Port – a joint Sino-Pak project – later this year.

A similar Free Trade Zone between China and Kazakhstan is already under construction near the HuoErGuoSi Port in northwest Xinjiang. The Free Trade Zone will encompass 200 hectares and house nine IT companies as well as China's largest sofa manufacturer, Zhejiang Kasen Industrial.

"We are all Muslim here," said Hussein. "This is our advantage – soon it will be very easy to sell goods all over [the Central Asian region] – we will get very rich."

But Uighur Muslims have a mixed view of their Pakistani counterparts. Pakistanis bring Indian movies with them – which some Uighur find offensive for their sexual content – and tend to enjoy themselves in the less religious atmosphere of China.

"They marry Uighur women and take them back to Pakistan and make them into slaves or prostitutes," said Ali, a Uighur Kashgar native. "The girls see the Pakistani and Indian movies and think the actors are really hot."

Guluz Khan, a Uighur woman from Kashgar, runs a Pakistani cafe and entertains a community of Pakistani businessmen everyday. Her husband, also Pakistani, comes for six months each year and visits Guluz and their daughter, Aidinya.

"Some girls do go [to Pakistan] and get embarrassed," she said. "But you have to consider the individual – there are cross-cultural marriages that work."

Increased trade and strong political ties with Pakistan are the most important aspects of China's Xinjiang policy. Last November, Pakistan President Pervez Musharraf and Chinese President Hu Jintao agreed to fight the "three evils" – extremism, ethnic separatism and terrorism.

The Uighur minority is predominantly Muslim and has reportedly looked to Afghan and Pakistani Muslims for support in their struggle against the repression of their religion, the exclusion of most Uighur from Xinjiang's vast natural resources, lack of political voice and the massive migration of Han Chinese to Xinjiang in the past five to 10 years. The "three evils" President Hu spoke of deal primarily with the Uighur minority.

In order to minimize the threat of "the three evils" China and Pakistan have signed border patrol and extradition treaties, focusing on Chinese nationals – specifically Uighur minority members – apprehended in the borderlands between Afghanistan, Pakistan and China.

The Shanghai Cooperation Organization is also part of China's policy of engaging neighboring states in trade while signing various security-based agreements. Chinese policy is to keep the Uighur minority from rising up against Beijing's rule while enriching Xinjiang as quickly as possible in order to remove the impetus for revolt.

To highlight Beijing's sensitivity to the danger of a Uighur revolt, a car bomb attack last May at the Gwadar Port construction site that killed three Chinese engineers was blamed on the Balochi minority – angry at being excluded from the economic benefits of the project – by Pakistani authorities, but the Chinese insisted that Uighur "separatists" hiding in the mountains were responsible for the attack. Beijing has criticized Pakistani border authorities in the past for allowing Muslim "extremists" to cross into China and proselytize – a Pakistani was arrested last year for selling "illegal" copies of the Koran and other Islamic literature.

But if China's policy of engaging its western neighbors in trade and enriching Xinjiang continues apace, there will likely be little need for draconian measures to keep the Uighur minority in check – they will too busy getting a piece of the pie.