The New Dominion

In today’s economic news: Ürümchi takes measure to control inflation. Aid continues to pour in for areas affected by extreme cold. The City of Ürümchi is taking more concrete measures to control infla—I mean rising prices. Trade with Tajikistan is about to get easier. Finally, Ürümchi might soon have a city center!

This winter’s uncommonly cold temperatures have affected rural production all over Northern Xinjiang. According to the XUAR Forestry Office, the XUAR will have to collect at least 30 million RMB to make up for losses in fruit production and provide for better protection from low temperatures in the future. Losses from the worst winter storms in fifty years, which have affected 54% of Xinjiang’s fruit-growing land, are estimated at 293.6 million RMB. Luckily, the Forestry Office’s goal seems to have been exceeded by 2 million RMB. Fruits and nuts are not the only agricultural products affected by the weather, however. The death of 41.8% of the bees in the Bayingolin Mongol Autonomous Prefecture’s apiaries has caused a financial loss of 1.14 million RMB.

So, why is Ürümchi unseasonably warm? Word on the street is, the short-sleeve weather that fell upon the city earlier this month, blamed on global warming, has been contributing to the outbreak of measles, which we have
reported on previously. On the other hand, people have turned off their coal stoves, making Ürümchi’s skies clear and the air positively pleasant. (But don’t leave your windows open all day, or you’ll come home to a dust-encrusted apartment.)

The City of Ürümchi is taking steps to control the rise of prices. Note that, in Xinjiang, a consistent rise in commodity prices over time is not inflation, but a natural effect of market forces. Well, anyway, those market forces are clearly getting out of line, as food commodity prices increased 5.4% in 2007 alone, about as much as they had in the previous three years. That doesn’t sound like much, but it’s affected a clear increase in everyday foodstuffs, one bemoaned by Ürümchiliks of all stripes. Example: restaurant menus have been changing all over the city since December. One plate of polo was 5-7 RMB not long ago; now it’s 8-12 RMB. (Suyuq ash prices have increased from 3-4 RMB to a typical 5 RMB. I love suyuq ash.) The city has set aside 20 million RMB, double last year’s amount, for agricultural development, including the building of greenhouses. The city will provide loans to agriculture businesses to increase production. Businesses providing foodstuffs will be temporarily prohibited from altering their prices without first applying to the government for approval. Aid to school cafeterias and low-income families has also been increased. (That’s right, fight those “natural market forces” with cold, hard socialism!) The XUAR’s grain reserves are also meant to be sufficient for the task of maintaining the stability of market prices. The XUAR has also achieved a goal, set in 2003, of storing up 20 000 metric tons of beet sugar in China’s only white crystal sugar storage area. Where is this place, and may I bring a spoon? The stores are meant to help control sugar prices, which have likewise increased and are predicted to rise further.

There is news for domestic and international trade and travel. First, the PRC’s only land port with Tajikistan, Qarasuw, has been approved for use during all weather conditions. Starting this year, it will be open constantly from 1 May to 30 November. Last year, 12 500 tourists, 56 300 metric tons of goods, and 250 million USD of trade passed through the port. Over the past five years, Chinese and foreign financial organizations, including the Asia Development Bank and Development Bank of China, have lent Xinjiang a total of 24.6 billion RMB for road construction and maintenance. This has contributed to the construction of over 60 000 kilometers of new roads, including Southern Xinjiang’s second express highway, Route 314 from Korla to Kucha, currently under construction. Australia’s Arrow Energy has signed a contract with the XUAR Geology and Ore Office to develop coal seams in the South Jungharia and East Jungharia coal fields.

The economic news has also paid some service to an Ürümchi landmark, the Shuangxing Old Goods Market, where I got my bookshelves. Trade at the market has already hit a high point, as at other used goods markets, with sales volume up 30-40% from this time last year. About 20% of customers are students, 20% are unmarried workers living on their own, 10% are families in poor financial circumstances, and 40% are migrant workers. The jump in sales probably has something to do with the natural increase in prices caused by market forces.

Xinjiang, like the rest of China, just never stops building. In the next year, over 20 000 earthquake-resistant housing buildings are planned for construction in Ürümchi. In addition, 9000 current structures are planned for quake-proofing. This may have something to do with the recent earthquakes on the Xinjiang/Tibet border. If you have recently been to Ürümchi, you may have noticed a gigantic pit between Hongshan Park and the Bogeda Hotel, near Edo no Sakura Japanese Restaurant, where the city government used to be until 2004. This is one of two areas adjacent to Hongshan Park slated for redevelopment, and work is finally beginning. High-class apartments on the site are already being sold for 8300-8800 RMB/m². (A typical nice, new apartment in the city goes for around 3500 RMB/ m².) These will be located right next to a greener Hongshan, part of a larger project to connect People’s Park and Hongshan via a “Hetan Green Corridor” along the current Hetan Express Highway. Property values in the area are already rising. It is hoped that filling in the pit will bring some life back to the area, which has been quiet since the government moved. (The Bingtuan headquarters just down the road doesn’t really have the same “community” feeling.) However, it is hoped even more that a great deal of business will go on just outside the gates of the new Hongshan Park.