I . Survey

(i) Geographic Location

Xinjiang Uygur Autonomous Region, also called Xin for short, is situated in the northwestern border area of China. In southeast, it neighbors Gansu Province, Qinghai Province and the Tibet Autonomous Region. Geographically, Xinjiang is located in 73°40′-96°23′ east longitude and 34°25′-49°10′ north latitude. It is 2,000 km long from its eastern border to the western border and 1,650 km long from its south border to the northern border. It covers an area of 1.6649 million square kilometers, accounting for one sixth of Chinese territory. So Xinjiang is China’s largest administrative region at the provincial level.

Xinjiang is in the hinterland of the Eurasian Continent. The Asian geographic center lies close to the city of Urumqi. From northeast to southwest, Xinjiang borders Mongolia, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan, Pakistan and India. With a borderline of 5,600 km, it is one of China’s provinces with the longest borderline. In ancient times, Xinjiang was an important section of the Silk Road. In mordern times, it serves as a gate and passageway for China opening to the west. Under the government of Xinjiang Uygur Autonomous Region there are 5 autonomous prefectures, 7 prefectures, 2 cities at the prefecture level, 20 cities at the county level, 62 counties and 6 autonomous counties. 33 counties (cities) are in border areas.

Characteristic of Xinjiang landform can be described as mountains and basins alternating with each other and basins caught in mountains’ embrace. Local people simply describe this characteristic as “three mountains with a basin between each two”. In the north lies Altai Mountains, in the south is Kunlun Mountains, while Tianshan Mountains lay along the middle dividing Xinjiang into two parts: in the southern part stretches Tarim Basin and in the northern part Jungar Basin. By custom, the part south of Tianshan Mountains is called South Xinjiang, the area north of Tianshan Mountains called North Xinjiang. Tarim Basin, the largest of its kind in China, lies between Tianshan Mountains and Kunlun Mountains. In the center part of Tarim Basin stretches Taklimakan Desert, covering an area of 330,000 square kilometers, the largest mobile desert in China and the second largest in the world. 2,100-km-long Tarim River is the longest continental river in China. In east Xinjiang is Turpan Basin where the lowest point is –154m high, being the lowest part of China in height above sea level.

 (ii) Climate

In climate, Xinjiang is under the control of a typical temperate continental climate, featuring long sunshine time, high cumulative temperature, wide diurnal amplitude and long frost-free period. With the annual precipitation of 188 mm, Xinjiang is a region with the least rainfall in China. The local annual mean air temperature stands at 10.4℃ , with the average air temperature in the coldest month (January) ranging from –14℃ to –20℃ and that in the hottest month (July) varying between 25-32℃ . The mean sunshine time is 2827.6 hours. In mountains of Xinjiang, there are many rivers resulting from snow broth on mountains. Oases lie on the edges of basins and in river valleys. With oasis taking up 5% of its total area, Xinjiang is characterized by oasis eco-system.

(iii) Population and Ethnic Groups

In 2005, Xinjiang had a population of 20.1 million, with urban population making up 37.2% and rural population 62.8%. Ethnic people account for 60.4% of the total. Xinjiang is inhabited by 47 ethnic groups, 13 of which are native. In the population, Uygurs make up 45.9%, Hans 39.6%, Kazaks 7.03%, Huis 4,44%, Kirgizs 0.85% and Mongols 0.85%. In Xinjiang, there live 44,000 Tajik people, 41,500 Xibo people, 24,600 Manchus, 15,100 Uzbeks, 11,200 Russians, 6,500 Dahurs, 4,700 Tartars and 113,700 people of other ethnic groups.

 (iv) Infrastructure, Communications and Transportation

Aviation

Airport. Xinjiang has 12 civil airports, including 2 major international airports in Urumqi and Kashgar, and other airports in Yining, Altai, Tacheng, Karamay, Hotan, Arksu and Korla. 92 air routes have been opened, with Urumqi at the center, reaching all parts of Xinjiang, connecting Xinjiang to 62 major cities in China, and to 19 cities of 15 countries in Central Asia, the Middle East and Russia, linking Urumqi with 12 prefectures, autonomous prefectures and cities in Xinjiang. The total length of civil air routes has come to 119,500 km. With such many airports and so long air routes, Xinjiang has become a region of China with the most airports and the longest air route. In 2005, 3.39 million people travel by air and 30,000 tons of goods were transported by air.

Highway

Centering on Urumqi, a network of highways has been shaped, with 7 national highways as the backbone, connecting Xinjiang to Gansu, Qinghai and Tibet, and to as far as Central and West Asian countries. The network of highways connects 68 provincial highways, every city, county and town in Xinjiang. By 2005, the length of highways open to traffic in Xinjiang reached 89,531 km, of which 1,200 km are expressways. 4 expressways (Turpan- Urumqi-Dahuangshan Expressway, Urumqi- Kuytun Expressway, Kuytun-Sayram Expressway, the Hoxud-Korla Expressway) have been built and opened to traffic. So far, highway transport business has been conducted between Xinjiang and 5 foreign countries including Kazakhstan, Kyrgyzstan, Tajikstan and Pakistan. 63 international highway transport lines have been opened in Xinjiang. All of these rank Xinjiang the top in China in terms of foreign transport lines, length of highways open to traffi c and number of vehicles.

Railway

A network of railways has been formed, with Urumqi at the center. The length of railways has reached 2,925 km. In September 1990, the Lanzhou-Xinjiang Railway was extended to Alatav Pass Port (also called Alashankou Port), forming a second Eurasia railway. With completion of construction, Alatav Pass Port had become a major gate of China for opening to the west. Passenger trains have been run from Urumqi to Beijing, Shanghai, Chongqing, Zhengzhou, Chengdu, Ji’nan, Lanzhou, Hankou, Lianyungang, as well as from Kuytun to Xi’an, from Korla to Xi’an. International passenger trains run between Xinjiang and Kazakhstan.

Oil and Gas Pipelines

The West-East Gas Transmission Pipeline, more than 4,000 km long, has been completed, passing through 10 provinces, autonomous regions and municipalities. An investment of over RMB 120 billion yuan was made in this project which was designed to transmit 12 billion cubic meters of gas a year. Also completed were Karamay- Dushanzi Pipeline (double line), Karamay- Urumqi (double line), Lunnan-Korla Pipeline, Shanshan-Urumqi Pipeline and Urumqi-Lanzhou Pipeline. The first phase of Sino-Kazakhstan oil pipeline project has been put into business operation, being able to transmit 10 million tons of oil a year. By 2005, the total length of pipelines in Xinjiang had mounted to 3,003 km, carrying 22 million tons of oil and gas a year.

Banking and Insurance

At the end 2005, 558 banking institutions operated in Xinjiang, with 2,767 business offices and 50,900 employees. At the end of 2005, the balance of deposits in banking institutions reached RMB 342.748 billion yuan. The year of 2005 saw operation of 11 insurance companies in Xinjiang, with 384 business offices. The premiums collected by these insurance companies stood at RMB 7.25 billion yuan in 2005.

新疆金融保险机构

Banking and Insurance Institutions in Xinjiang

Telecommunication

Xinjiang boasts long-distance digital transmission network, program control telephone network, mobile phone network, meeting video telephone network, digital data network, language information network, all of which formed modern communication networks linking Xinjiang with other parts of China. The optical cables are 28,915 km in total length. The number of fi xed telephone subscribers reached 6.12 million, and that of mobile phone subscribers came to 5.31 million. Its telephone penetration rate stands at 57.6 phones per 100 persons.

Internet

Tianshannet, website of Xinjiang government, new Silk Road net and other nets and websites were built. All nets and websites have access to Internet through optical cables , w ideband and digital broadcasting. The e-government is making steady headway. 15 prefectures, autonomous prefectures (cities), 13 departments of Xinjiang government and 26 counties have built their own public information websites. The number of subscribers of Internet has increased to 1.06 million.

 (v) Foreign Exchanges

Friendly States and Cities By the end of 2005, 13 prefectures and cities in Xinjiang had established friendly relations with states (cities) of 10 countries including Russia, Kazakhstan and the United States, greatly promoting the opening up of Xinjiang to the outside world.

新疆与境外建立的友好合作关系一览表

Friendly and Cooperative Relations of Xinjiang with Foreign States (Cities)

Foreign-related Fairs

1. Urumqi Foreign Economic Relations and Trade Fair, also called Urumqi Fair for short, is the largest of its kind in western China. With the approval by the Ministry of Commerce of China, Urumqi Fair is held every year. Since 1992, Urumqi Fair has been held successfully for 15 times. Aimed at promoting trade and bilateral investment between China and Central and West Asian countries, it is a showcase to learn about Central, West and South Asia as well as Russia. Time: 1-5 September every year. place: Urumqi City

2. Central and West Asia Commodities Fair Kashgar, Xinjiang, China. The fair is also called Kargash Fair. The purpose of the Fair is to set up a platform for economic and trade cooperation of China with Central and West Asian countries, attract more businesses to Kashgar for opening international markets and enhance economic cooperation of Kashgar, Xinjiang and even of China with surrounding countries. Since 2005, Kashgar Fair has been held successfully for two times. Time: May-June, every year. Place: Kashgar City, Xinjiang.

(vi) Higher Education and Scientifi c Research

Higher Education

A multi-level and multi-discipline system of higher education with Xinjiang characteristics has been shaped by and large. At the end of 2005, there were 31 general institutions of higher learning. Xinjiang University is a national key university. The institutions of higher learning have a student population of 188,700 (75,000 are students of ethnic minorities) and 6,938 postgraduates. 1.7174 million students are studying at secondary vocational schools.

Scientifi c Research

At the end of 2005, 445, 000 specialized technical personnel and 3 academicians of the Chinese Academy of Engineering worked in different fields in Xinjiang. There are 122 independent research and development institutions in Xinjiang. 6,545 major achievements have been made in scientific and technological research, 137 of which won national awards. Science and technology play an important role in economic development and social progress.

 (vii) Tourism

Scenic Spots and Places of Historical Interest

There are abundant tourist resources in Xinjiang. China has 68 categories of tourist resources, and Xinjiang is endowed with 56 of them, ranking Xinjiang the top in all provinces and regions of China. Wellknown are such place of scenic interests as Heavenly Lake, Kanas Lake, Bosteng Lake, Sayram Lake and Bayinbluk Grassland. Besides, there are many well-known places of historical interest, such as the remains of Jiaohe Ancient City, remains of Gaochang Ancient City, ruins of Loulan and Kezil Thousand-Buddha Grottoes. 28 natural reserves have been built in Xinjiang, 8 (Kanas, Tomur Mount, West Tianshan Mountain, Tarim Hu Poplar, Bayanbuluk Swan Lake, Ganjiasuosuolin, Lop Nur Wild Camel and Altun Natural Reserve) of which are national ones. Natural reserves cover a total area of 218,300 sq. km, accounting for 13.1% of the total area of Xinjiang. The project to build 8 ecological model zones has been approved, covering an area of 127,600 sq. km. There are 2 national ecological preservation zones in Xinjiang, covering area of 180,900 sq. km.

Golden tour routes: tourists may go on an eco-tour to the area around Kanas Lake, two scenic spots with Bosteng Lake and Heavenly Lake at the center respectively, a place of historical interests with Turpan as the focus, a folk-custom tourist attraction with Kashgar at the center and a beautiful tourist destination in Ili. You may have sightseeing by three tour routes: the Turpan- Korla-Kuqa-Taklimakan-Hotan-Kashgar route, the route of Urumqi-Heavenly Lake- Karamay-Ulungur Lake-Kanas Lake and the route of Urumqi-Kuytun-Qarma-Narat- Bayanbluk-Golden Beach (Jinshatan)- Urumqi.

Kanas Lake is the core of the national Kanas Natural Reserve. The water surface of the Lake is 1,375 meters above sea level. Looking like a crescent, the lake is 24.5 km, 1.9 km on the average and 188.4 meters deep at the maximum. It is one of China’ s deep lakes, covers an area of 69,000 mu and has a water-storage capacity of 4 billion cubic meters. Around the Lake is thick theropencedrymion which integrates itself with the boundless mountain grassland. Kanas Lake is a rare area in China that boasts European ecological system. In this protection zone, there live 798 varieties of plants, including 30 rare varieties, 39 varieties of animals, 117 varieties of birds and 7 varieties of fishes. Of these animals, 5 varieties are under Grade I protection by the State and 13 varieties under Grade II protection by the State. There are also 9 varieties of other rare animals and 60 new varieties of insects and fungus.

Heaven Lake (Tianchi Lake) is located north of Bogda Mountain, 110 km from Urumqi City. The surface of the Lake is over 1,900 meters above sea level. From south to north, it is more than 3,000 meters long and 1,500-odd meters wide from east to west. In good times, the lake surface is 4.9 sq. km in area, and it is 105 meters in maximum depth and can store 160 million cubic meters. This lake is a world-famous alpine lake. In 1982, it was listed in one of fi rst group of national key scenic areas in China. Beginning from its entry, Heaven Lake scenic area can be largely divided into 4 natural landscapes: lower mountain belt, mountain boreal forest belt, alpine and subalpine belt, glacier and snow belt.

The Ancient City of Jiaohe lies at Yar Town, 13 km west of Turpan City. In the Western Han Dynasty, Jiaohe served as the capital of Anterior Cheshi, one of 36 states in the Western Regions. In the Tang Dynasty, the Western Regions Frontier, the highest military organ of the Tang Dynasty in the Western Regions, was once stationed here. The Ancient City is just like a large castle with strong defense. The defense in the city is very solid. A lot of relics were unearthed in the Ancient City of Jiaohe, like Lotus Eaves Tile and Lotus Buddhist Scripture of the Tang Dynasty.

Narat Grassland　Narat Grassland lies on the south Xinjiang-north Xinjiang traffic artery. It is a home of meadow vegetation and one of the world’ s four. Since ancient times, it has been a famous pasture. Here, you can see plain and wide river valleys, high mountains, deep canyons, thick forest and vast grassland. Local custom and folkway of Kazak people are fresh and alien to tourists. Therefore, it is an ideal tourist attraction.

Local Food

Mutton kebab has become a nationwide popular food in China. Roast lamb is a famous delicacy of Xinjiang. Pilaf (steamed rice with muttons) and hand grabbed boiled mutton are favorite food of ethnic people. Nang, roast stuffed bun, hand-pulled noodles, oil fried wheaten food, steamed twisted roll, milk tea are traditional foods of local ethnic minorities in Xinjiang.

II . Economy

 (i) GDP

In 2005, the GDP of Xinjiang reached RMB 260.4 billion yuan, 19% of which was produced by the primary industry, 44.7% by the secondary industry and 36.3% by the tertiary industry. The per capita GDP was RMB 13,108 yuan, equal to 1600 USD if calculated at the exchange rate in 2005.

(ii)Resources, Industry and Agriculture Natural Resources

Xinjiang has 4.063 million hectares of cultivated land, 0.2 hectares per person, which is 2.1 times that of the country. With 51.16 million hectares of pastures and grassland, Xinjiang is one of five major pastoral regions in China. There are 6.77 million hectares of forestland. The volume of water resources accounts for 3% of the total of China. The annual run off of surface water is 85.5 billion cubic meters, with the per capita surface water reaching 4,255 cubic meters, which is 2.24 times that of the average level of the country. 25.1 billion cubic meters of exploitable water exists underground. The reserve of glaciers makes up 50% of the total of China.

Xinjiang boasts complete categories of minerals with large reserves. We can see a bright prospect for exploitation of minerals here. Rich are such minerals as oil, natural gas, coal, gold, chrome, cooper, nickel, rare metals, salts and non-metal building materials. By the end of 2005, 138 large and medium-sized mineral deposits had been found, accounting for 81.6% of the total number of minerals found in China. Of these mineral deposits in Xinjiang, 6 ones are energy mineral deposits, 27 ones are metal mineral deposits, 46 ones are nonmetal deposits and 2 ones are water and gas minerals. In terms of reserve, 9 minerals rank the top in China and 32 minerals take the first place in northwestern China. The reserve of oil stands at 20.86 billion tons, accounting for 30% of the oil reserve in land of China. Natural gas is 10.3 trillion cubic meters in reserve, 34% of the gas reserve in land of the country. There is an estimated coal reserve of 2.19 trillion tons, making up 40% of the national total.

Xinjiang is rich in varieties of biological resources and many of them are unique to Xinjiang. So there is a great potential for exploitation of the biological resources. There are more than 4,000 varieties of wild animals and plants, and more than 10,000 varieties of local crops and introduced crops. In addition, Xinjiang is the origin center and secondary center of many fruit trees, and is abundant in varieties of fruit trees, with the number of fi ne varieties exceeding 300. Natural medicines are widely distributed, such as ephedra, kendir, liquorice and snow lotus, and they are fi ne in quality.

Industry

A modern industrial system with complete sectors has been built by and large in Xinjiang, with the mineral exploitation and processing of agricultural products as the mainstay, including exploitation of oil and gas, petrochemical, coal, electric power, textile, building materials, chemical industry, pharmacy and food processing. In 2005, the industrial added value was 96.2 billion yuan, and output of crude oil reached 24.08 million tons, ranking the third place in China. The yield of natural gas came to 10.7 billion cubic meters, taking the second place in the country. 38.99 million tons of raw coal was exploited. The installed generating capacity in 2005 climbed to 6.54 million kw. And 30.7 billion kwh of electricity was generated. In the mix of energy consumption, coal, oil, gas, water power and wind power account for 56.1%, 26.2%, 13.7% and 4% respectively.

2005 年新疆主要工业产品产量

Output of Major Industrial Products

Listed Companies

By the end of 2005, 27 Xinjiang companies had been listed on stock exchanges, with total market value of 40.32 billion yuan, total capital stock of 8.52 billion shares. Totally, 10.74 billion yuan of fund had been raised. Major listed companies include Tebian Electrical, Tunhe Investment, Markor International, Zhonghe, Bayi Steel, Tianli Hi- & New-Tech.

Service Sector

Since the policy of reformand opening up was adopted by China in 1978, the service sector of Xinjiang has grown rapidly, becoming the industry that created the most jobs for people newly entering the workforce. In 2005, 79.16 million people found their own jobs, of whom 51.5%, 15.5% and 33% respectively work in the primary sector, the secondary industry and the tertiary industry.

Preponderant Industries

As the biggest pillar industry of Xinjiang, petroleum industry produced about 60% of the regional industrial added value. Four major oil fields have been built: Xinjiang Oilfield, Tarim Oilfield, Tuha Oilfi eld and Tahe Oilfi eld. A number of petrochemical bases with their own characteristics have been built in Karamay, Dushanzi, Urumqi, Korla, Kuqa and Zepu. A system of petrochemical industries has been shaped by and large, being able to refine oil and produce chemical fertilizer, plastics and chemical fiber. Our 200-odd varieties of petrochemical products are sold well both at home and abroad. The year 2005 saw the output of ethane reaching 261,000 tons, sodium hydroxide 300,000 tons, soda ash 126,000 tons, carbamide 1.177 million tons, sulfuric acid 127,000 tons, resin 788,000 tons, plastics 389,000 tons and 962,000 cover tires. Xinjiang has become an important oil and petrochemical base in western China and a strategic alternative reserve of energy for China in the 21st century.

Coal Industry

Coal industry is a sector with great potential for development in Xinjiang. Three coal bases have been built respectively in Urumqi, Sandaolin of Hami and Aiver Valley. A number of small-sized coal mines have been constructed in Dahuangshan of Changji, East Jungar, Kangsu of Kizilsu Kirgiz Autonomous Prefecture, Tielik of Baicheng County, Ehuoburak of Kuqa County and Tiechanggou of Tacheng. In 2005, the output of raw coal reached 38.99 million tons. Smooth progress has been made in the preparatory work for the connection of Xinjiang Power Grid and Northwest Power Grid. All these have laid a foundation for West-East Electricity Diversion Project and for giving full play to rich coal resource in Xinjiang by building coal power base and coal-chemical industry base.

Agriculture, Forestry, Livestock Husbandry and Fishery

There are abundant resource of sunlight, heat, water and soil in Xinjiang. The local climate features long sunshine hour, high accumulated air temperature and long frost-free period, conducive to the growth of crops. Cotton, grain, beet, fruit, horticulture and livestock husbandry are the leading industries. In 2005, the total output of agriculture, forestry, livestock husbandry and fishery came to 83.11 billion yuan. In this fi gure, the agricultural added value was 49.4 billion yuan, the total yield of grain was 8.772 million tons, and cotton 1.957 million tons. Some agricultural products with local characteristics enjoy high reputation both at home and abroad, and they are cotton, hops, tomato, safflower, medlar, Hami Melon, Turpan grapes, Korla pears and Hotan pomegranates. Presently, the cotton output of Xinjiang makes up more than one third of China’s total and 8% of the world’s total. The yield of hops accounts for 70% of the national total. The outputs of medlar and safflower account for 50% and 60% respectively of the country’s total. Xinjiang has grown into China’s largest base of cotton, hops and tomatoes, and an important base of livestock husbandry and beet sugar.

Modern livestock husbandry develops quickly. At the end of 2005, the number of cattle stood at 53.34 million, the output of meat reached 1.415 million tons and the yield of aquatic product came to 79,000 tons.

In 2005, 1.078 million tons of chemical fertilizer was applied in farmland. 3.65 billion kwh of electricity was consumed in rural areas.

2005 年新疆主要农产品产量单位：                               万吨

Outputs of Main Agricultural Products, Xinjiang (2005)            Unit:10,000 tons

Agriculture with Local Characteristics

Agriculture with local characteristics consist of 10-odd trades such as winemaking, canned food, drinking, milk products, daily chemicals, fl avoring essence, spice, processing of gemstone and jade, sugar-making, food, articles used by ethnic minorities. Mass production is conducted for such products as tomato products, grape wine, cotton textiles, fruit juice drinking, safflower products, medlar products, carrot products, cosmetics, flavouring essence, spicery, hops, beet sugar, oligosaccharide, gemstone, jade and articles of ethnic minorities. Good momentum is kept in the development and production of milk wine, fermented mares milk, kendir tea, grape seed oil, pear pectin, food and drinking with Uygur medicinal materials as raw materials.

Xinjiang is one of the world’s regions most suitable for the growth of tomatoes. Tomatoes produced here have high content of haematochrome and are fine materials for making tomato products. So far, 137 production lines have been built for tomato products, producing more than 500,000 tons of tomato products a year. The output of tomato products by Xinjiang is in the third place in the world, ranking after the US and Italy. The tomato product yield of Xinjiang makes up more than 90% of China’s total and 21% of the world’s total, transforming Xinjiang into the largest tomato base in China.

 (iii)Business Data

Foreign Trade

The 2005 combined volume of imports and exports was 7.94 billion USD. In this figure, exports make up 5.04 billion USD and imports 2.9 billion USD. In 2005, Xinjiang ranked the fourteenth place in China in combined volume of import and export. Of the GDP of Xinjiang, 24.3% originates from foreign trade. Xinjiang has established economic and trade ties with 147 countries and regions. The trade volume of Xinjiang with central Asian nations and Russia reached 5.87 billion USD, accounting for 74% of its total foreign trade volume.

2005 年新疆商务运行情况单位：                                             亿美元

Business Operation in Xinjiang (2005)                                Unit:100 million USD

利用外资

截至 2005 年，新疆累计批准外资项目 1,439 个，合同外资金额 20.2 亿美元，实际利用外资 5.8 亿美元。

Utilization of Foreign Investment

By 2005, 1,439 foreign investment projects had been approved by the government of Xinjiang, with total contract amounts reaching 2.02 billion USD, and actually 580 million USD of foreign capital had been utilized.

Foreign Economic and Technological Cooperation

In 2005, the business volume of contracts for overseas construction projects and labor service cooperation rose to 137.35 million USD, and 744 laborers worked abroad at the end of 2005. Xinjiang received 20 million USD of international free aid.

Outbound Investment

In the past, outbound investment made by Xinjiang investors mainly took the form of running trade companies. Now the form of outbound investment has gradually transformed into processing materials, technology export, resource exploitation and establishment of sales network. Some Xinjiang enterprises make outbound investment by participating in exploration and exploitation of oil and mineral resources in surrounding countries, production of electronics, agricultural products and food, and forestry operation. By the end of 2005, the outbound investment of Xinjiang had amounted to 52.58 million USD.

Technology Import

In 2005, the local government of Xinjiang approved 19 contracts for technology import totaling 49.11 million USD. Of the total amount of these contracts, 18.98 million USD were spent on technology introduction, covering agriculture, livestock husbandry, manufacturing, aviation, IT, education, scientific research, petrochemical industry and greatly increasing strength of the sectors of petrochemical, oil exploration, iron and steel and civil aviation.

Commodity Circulation

In 2005, the retail volume of consumer goods came to RMB 63.78 billion yuan, of which 50.98 billion yuan was business volume of wholesale and retail sector and 9.05 billion yuan was business volume of catering industry. The retail sales of consumer goods in urban areas reached 44.24 billion yuan and that in rural areas was 19.54 billion yuan.

Ports

In 2005, 12.83 million tons of goods passed through ports in Xinjiang, of which 11.20 million tons were transported through the Port of Ala Tav Pass Port (Alashankou Port).

Sino-Kazakhstan Horgos International Border Cooperation Center

In July, the two governments of China and Kazakhstan signed an offi cial agreement to launch the construction of Sino-Kazakhstan Horgos International Border Cooperation Center. Chinese government decided to allocate a land of 3.43 square kilometers on the Chinese side for the Cooperation Center and the part of the Cooperation Center on the Chinese side shall be administrated in accordance with the mode of“ inside China, outside the Customs”. The Chinese government granted the following special policy to the Center. Inside the Cooperation Center, goods from China for infrastructure development and equipment for Xinjiang use shall be deemed exports, and tax shall be refunded; and goods from Kazakhstan for infrastructure development and equipment for Xinjiang use shall be exempted from tariff and import linkage value-added tax. Every person entering China through the Cooperation Center shall be exempted from tax for goods brought with him or her as much as RMB 8000 yuan every entry a day. Chinese government also decided to allocate a 9.73 sq.-km land in the Chinese side near the Cooperation Center as the supporting zone, and this part of land shall be used for development of industries oriented towards the Cooperation Center, and the following preferential taxation policy is granted for it: goods entering the zone from abroad shall be bonded; goods entering China from the zone shall be treated as imports; goods entering the zone from China’s regions other than Xinjiang shall be treated as exports and tax shall be refunded for them; goods trade between local enterprises of Xinjiang shall be exempted from value-added tax and consumption tax.

新疆对外开放口岸一览表

Opened Ports of Xinjiang

III . Investment

(i)Policy and Administrative Rules

Catalogue of Related Laws

Foreign Trade Law of the People’s Republic of China

Customs Law of the People’s Republic of China

Law of the People’s Republic of China on Import and Export Commodity Inspection

Law of the People’s Republic of China on Chinese-Foreign Equity Joint Ventures

Law of the People’s Republic of China on Chinese-Foreign Contractual Joint Ventures

Law of the People’s Republic of China on Foreign-Capital Enterprises

Company Law of the People’s Republic of China　

Law of the People’s Republic of China on the Entry and Exit Animal and Plant Quarantine

Law of the People’s Republic of China on Control of the Entry and Exit of Aliens

Law of the People’s Republic of China on the Control of the Exit and Entry of Citizens

Securities Law of the People’s Republic of China

Income Tax Law of the People’s Republic of China for Enterprises with Foreign Investment and Foreign Enterprises

Individual Income Tax Law of the People’s Republic of China

Law of the People’s Republic of China on the Administration of Tax Collection

Environmental Protection Law of the People’s Republic of China

Law of the People’s Republic of China on Evaluation of Environmental Effects

Law of the People’s Republic of China on Promotion of Cleaner Production

Law of the People’s Republic of China on Prevention and Control of Desertifi cation

Marine Environment Protection Law of the People’s Republic of China

Law of the People’s Republic of China on the Prevention and Control of Atmospheric Pollution

Law of the People’s Republic of China on Prevention and Control of Environmental

Pollution by Solid Waste Law of the People’s Republic of China on Prevention and Control of Water Pollution

Law of the People’s Republic of China on Prevention and Control of Environmental Noise Pollution

Law of the People’s Republic of China on Prevention and Control of Radioactive Pollution

Frontier Health and Quarantine Law of the People’s Republic of China

Labour Law of the People’s Republic of China

Trade Union Law of the People’s Republic of China

Searching Website for the Related Laws

1. Searching System of Lawsand Regulations of China (website of National People’s Congress of China)

http://law.npc.gov.cn:87/home/begin1.cbs

2. China Legislative Information Network System

http://www.chinalaw.gov.cn/jsp/jalor/ index.jsp

3. Ministry of Commerce

http://www.mofcom.gov.cn

The above-mentioned websites are for reference only.

Regulations and Measures for Environment Preservation

It is stipulated in the Regulations of Xinjiang Uygur Autonomous Region on Environment Protection that governments at different levels shall, taking into consideration of local natural resources reserves and ecological environment, and in accordance with the policy of attaching equal importance to exploitation, conservation and adding value, formulate policies concerning economic development, safeguard the stability and sound circle of ecological system, protect and improve environment.

So long as exploitation of natural resources is concerned, we must adhere to the principle that he who exploits shall conserve, he who damages environment shall be responsible for restoration and he who exploits resources shall provide compensation.

Agricultural environment protection shall be strengthened. Ecological agriculture shall be developed and cultivated land be conserved. Techniques for comprehensive prevention and control of damage by disease, insect and mouse will be spread. We will provide scientific management of the application of chemical fertilizer, agriculture chemicals, agricultural film and plant growth regulator and prevent the pollution of soil, agricultural products, desertifi cation, salinization and impoverishment of soil.

Waters and water quality shall be protected and improved. It is prohibited to dump wastes into or discharge oil, acid liquor, alkaline liquor and virulent waste liquid to rivers, lakes, reservoirs and other waters.

In the Grade I protection zone for potable water source, it is prohibited to construct production facilities that cause pollution or to conduct other activities that cause pollution to source of potable water.

Pollution of underground water shall be prevented. It is prohibited to discharge toxic and pollutant waste water, sewage containing pathogen as well as other wastes by overfl ow, sink hole or any other way that may cause pollution to underground waters.

Industrial production facilities polluting environment may not be built in natural reserves, places of scenic interests, cultural relics reserves, living communities and other areas that need special protection. If other facilities are to be constructed in these areas, the pollutants discharged may not be higher relevant standards concerning discharge of pollutants.

Environment impact assessment must be conducted for development projects that have impact on environment. The developers shall submit reports on environment impact to administrative departments of environment protection for examination and approval. Only after approval can the development projects be launched.

Catalog of Encouraged Foreign Investment Industries in Xinjiang (See Xinjiang Investment Promotion Net)

1. growing and fine-processing of quality tomato and medlar

2. industries following up national key ecological projects such as returning cultivated land to forest and grassland, and the conservation of natural forest

3. development and application of water-saving irrigation technology

4. beet sugar production and comprehensive utilization of byproducts

5. growing and processing of natural perfume and edible fungus

6. construction of base of quality winemaking grape and making of fine grape wine

7. fine processing of cotton seed, sunfl ower seed and saffl ower oil

8. growing of flax and production of fl ax products

9. upgrading of high class cotton and wool products

10. exploration and exploitation of nonferrous mines such as copper, lead, zinc and nickel

11. multi-purpose development of nonmetal minerals such as vermiculite, nitratine, mica, asbestos and bentonite

12. development of technology for processing coal and production of coal products

13. manufacturing of high class leather products

14. development of end product of ethene and development of fine chemical products

15. production and development of end products of natural gas

16. growing and processing of Uygur medicines and development of new technology of pharmacy

17. development of bio-drug with internal organs of cattle as raw materials

18. production of goods, artistic articles, materials of packing container and glass articles of daily use for local ethnic minorities

19. construction and management of urban gas and heat supply pipes, water supply and drainage pipes (holding by Chinese side in large and medium-sized cities)

20. development, conservation and management of scenic areas (spots)

21. Highway passenger transport

Relations concerning Import and Export

Unitary policy of China is implemented for foreign trade of Xinjiang. Border trade with neighboring countries is regulated in accordance with border trade policy of the country. Based on the realities of China’s border trade and by reference to international practices, China regulates border trade in the following two ways.

Mutual trade between border inhabitants, which means that residents of the border areas trade goods in amount not more than the ceiling prescribed by the government and at fairs designated by the government within 20 km from the borderline. Goods imported by residents through this form of trade shall be exempted from import duty and import linkage tax if the trade volume of every trader is not more than RMB 3,000 yuan a day; import duty and import linkage tax shall be levied on the business volume above the ceiling of 3,000 yuan if the trade volume of every trade is more than RMB 3,000 yuan a day.

Border trade, which refers to trading activities between enterprises entitled to border trade in border counties (Banner, an administrative area at the county level) and cities along the land border approved by the State and enterprises and other trade institutions in border areas of the neighboring countries.

Foreign Exchange Control

Foreign exchange in the border trade of Xinjiang with neighboring countries is administrated in accordance with Measures for the Administration of Foreign Exchange in Border Trade. Border trade enterprises may open border trade account with banks in the border areas of China and the border trade account can be settled in currencies of the neighboring countries. Trade institutions abroad may, with banks in the border areas of China, open current foreign exchange account and border trade account in currencies of the neighboring countries. For current foreign exchange account, border trade account in currencies of neighboring countries and special RMB account for border trade opened by trade institutions abroad with banks in Chinese border areas, declaration formalities shall, in accordance with relations of China concerning foreign exchange control, be gone through for receipts and payments related to foreign trade transactions conducted outside China. In Chinese border areas where RMB accounts are settled in large amount, trade institutions may, with banks in Chinese border areas, special RMB account for border trade.

Earnings made by border trade enterprises in convertible currencies, if the amount is under the ceiling prescribed by the Foreign Exchange Administration for current foreign exchange account, may be settled or kept under current foreign exchange account; if the amount is above the ceiling, the earnings shall be settled in accordance with relevant regulations.

(ii)Procedures For Establishing Enterprise

Conditions for establishing enterprise

Foreign companies, enterprises, other economic organizations and individuals may make investment in running enterprises and other projects in Xinjiang Uygur Autonomous Region.

Relevant Laws

The establishment of foreign-funded enterprises shall be governed by Law of the People’s Republic of China on Chinese-foreign Joint Ventures, Law of the People’s Republic of China on Chinese-foreign Contractual Joint Ventures and Law of the People’s Republic of China on Foreign-Capital Enterprises.

Regulations concerning employment

According to Labor Law of the People’s Republic of China and Regulations on Labor Management of Enterprises with Foreign Investment, enterprises with foreign investment may, in accordance with needs of production and operation, decide the setup and staff size, and recruit employees on their own. Enterprises with foreign investment may employ human resources through multiple channels. For instance, they may entrust intermediate institutions recognized by local labor department with recruitment, or they may recruit employees through talents fairs, or carry want ads through mass media. If foreign-funded enterprises recruit employees in China, the foreign-funded enterprises and employees shall sign labor contracts in accordance with laws and regulations of China. In the labor contract, relevant matters shall be clearly stipulated, such as employment, dismission, wages, welfare, labor protection and labor insurance. Enterprises with foreign investment may not employ child laborer. Enterprises with foreign investment shall be responsible for training of employees and set up examination system so that employees meet needs of production and development of enterprises.

(iii)Living Environment

Regulations on Entry and Exit

For entry into China, aliens shall apply for visas from Chinese diplomatic missions, consular offices or other resident agencies abroad authorized by the Ministry of Foreign Affairs. Aliens holding letters or telegrams from authorized organizations in China and ordinary passports issued by countries that have diplomatic of official trade contact with China may apply for visas to port visa agencies authorized by the Ministry of Public Security in cases of an urgent need to travel to China and a lack of time to apply for visas to the above-mentioned Chinese agencies abroad, for the following reasons: (1) being invited at short notice by the Chinese side to attend a trade fair in China; (2)being invited to China to enter a bid or to formally sign an economic or trade contract; (3)coming to China under contract for supervision over export shipment, import commodity inspection or checked on the completion of a contract; (4)being invited to install equipment or make rush repairs; (5)coming to China at the request of the Chinese side for settling claims; (6)being invited to China for providing scientifi c and technological consulting service.

Transit visas are not required for those aliens who are in immediate transit through China on continued international fl ight, who hold connecting fl ight tickets and have seat booked and who stay for not more than 24 hours within the airport of the in-transit city. Aliens wishing to leave the airport shall apply to the border check-posts for stopover permits.

For exit, aliens shall submit for examination their valid passports or other valid certifi cates as well as visas or residence certifi cates permitting their stay in China.

Work and Residence Permits

The employer shall apply for the employment permission if it intends to employ foreigners and may do so after obtaining approval and The People’s Republic of China Employment License for Foreigners. Foreigners seeking employment in Xinjiang shall hold the Employment Visas for their entry（In case of agreement for mutual exemption of visas，the agreement shall prevail）, and may work within Xinjiang only after they obtain the Employment Permit for Foreigner, and the foreigner residence certificate Foreigners who have not been issued residence certifi cate (i.e. holders of F，L，C or G-types visas)，and those who are under study or interim programs in China and the families of holders of Employment Visas shall not work in Xinjiang．

Foreigners may be exempted from the Employment License and Employment permit when they meet any of the following conditions：（1）foreign professional technical and managerial personnel employed directly by the Chinese government or those with senior technical titles or credentials of special skills recognized by their home or international technical authorities or professional associations to be employed by Chinese government organs and institutions and foreigners holding Foreign Expert Certificate issued by China’s Bureau of Foreign Expert Affairs；（2）foreigners who conduct commercialized entertaining performance with the approval of the Ministry of Culture and hold“ permit for Temporary Commercialized Performance”.

Foreigners may be exempted from the Employment License and may apply directly for the Employment Permit by presenting their Employment Visas and relevant papers after their entry when they meet any of the following conditions:（1）foreigners employed in China under agreements or accords entered into by the Chinese government with foreign governments or international organizations for the implementation of Sino-foreign projects of cooperation and exchange；（2）chief representatives and representatives of the permanent offices of foreign enterprises in China.

Any foreigners seeking employment in Xinjiang shall meet the following conditions： （1）18 years of age or older and in good health（2）with professional skills and job experience required for the work of intended employment；（3）with no criminal record；（4）a clearly-defined employer;（5）with valid passport or other international travel document in lieu of the passport

The public security organ may issue certificates of long-term residence status valid for one to five years to aliens who, in compliance with Chinese laws, find it necessary to establish prolonged residence in Xinjiang for the purpose of investing in Xinjiang or engaging in cooperative projects with Xinjiang enterprises or institutions in the economic, scientific, technological and cultural fi elds, or for other purposes and may issue certificates of permanent residence status to those with meritorious performance.

Aliens residing permanently in Xinjiang shall, once every year and at a prescribed time, submit their residence cards for examination to the pubic security bureau at their place of residence.

Urban Living Environment

There are 22 cities and 68 county towns in Xinjiang. Major cities include Urumqi, Karamay, Shihezi, Yining, Kashgar and Turpan. The city of Urumqi is the capital of Xinjiang Uygur Autonomous Region. Good living environment exists in Xinjiang where the urbanization rate reached 37.2% and forest cover rate 2.94%, the urban population density was 230 persons per sq .km, the gas penetration rate in cities stood at 89.3%, the green area of per 10,000 people covered 43.1 hectares at the end of 2005. Every year, 3.44 million tons of home refuse is collected. 18 home sewage plants were built, with daily treatment capacity reaching 1.327 million cubic meters. Air quality in Xinjiang has been improved, and the number of days when urban air quality is above Grade II accounts for 73.9% of a year..

Education and Health Care The undertaking of education develops steadily. There are 7426 schools of different types and at different levels, with a student population of 4.055 million, 59.6% of which are members of ethnic minorities. 262,000 full-time teachers work for these schools. 1516 hospitals have been built in Xinjiang. 39.7 sick beds are provided for every 10,000 people. 117,000 medical personnel work in the health care sector of Xinjiang. Complete public health regime has been built, and disease prevention and control centers are part of the regime.

Driver’s License

In accordance with Road Traffic Safety Law of People’s Republic of China and Rules Governing Application and Use of Motor Vehicle Driver’s License, traffic administration department under public security organ shall, on the principle of diplomatic reciprocity, issue motor vehicle driver’s license to personnel of foreign embassies and consulates , and personnel of representative agencies of international organizations if they apply for motor vehicle driver’s license. Aliens who apply for motor vehicle driver’s license shall apply to traffic administration authorities in the residing place. Holders of foreign driver’s license, if applying for motor vehicle driver’s license, shall fill Application Form of Motor Vehicle Driver’s License and submit the following certifi cates: (1) identifi cation certifi cate of the applicant; (2) health certifi cate issued by medical institution at or above county level; (3) motor vehicle driver’s license held by the applicant. If the driver’s license held by the applicant is in a non-Chinese language, the applicant shall present the Chinese version text.

Personnel of foreign embassies and consulates, and personnel of representative agencies of international organizations, if holding foreign driver’s licenses, shall fill Application Form of Motor Vehicle Driver’s License and submit the following certifi cates: (1) identification certificate of the applicant; (2) motor vehicle driver’s license held by the applicant. If the driver’s license held by the applicant is in a non-Chinese language, the applicant shall present the Chinese version text. Holders of foreign driver’s license, if applying for motor vehicle driver’s license, shall take Test Subject I. Those who apply for driver’s license for large-sized bus, towing vehicle, medium-sized bus and largesized truck shall take Test Subject III. Aliens who temporarily entering China drive motor vehicles shall apply for temporary driving license of People’s Republic of China to vehicle administration departments of public security organs of the place of entry or the place of departure.

(iv)Reference Prices of Basic Elements

新疆各主要城市城市供水价格表单位：

Water Prices in Major Cities in Xinjiang

元 / 立方米

                                                                     Unit: yuan/m³

 新疆电力价格单位：                                                     元 / 千瓦时

Electricity Prices in Xinjiang                                               Unit: yuan/kwh

新疆劳动力价格单位：                                                        元 / 月

Price of Labor Power in Xinjiang                                           Unit: yuan/month

新疆土地租价单位：                                     元 / 平方米

Land Rent in Xinjiang Unit:                                 yuan/m2

注：（1）商业、服务业、房地产业用地价格，通过拍卖、挂牌决定。

（2）熟地指：乌鲁木齐六通一平，其他地州市五通一平，县（市）四通一平。

Note: (1) Rent of land for business and service project and for real estate project shall be decided through auction and nominal quotation.

(2) Ready land refers to land equipped with infrastructure facilities.

新疆电信价格

Price of Telecommunication Service in Xinjiang

固定电话

Fixed-line Telephone

注：以上通讯费是电信公司制定的基本通讯费用，采用 IP 通话方式或电信公司设计的优惠套餐业务可大大降低通讯成本。

Note: the costs of communication above are basic charges required by telecommunications. If IP mode or package service is adopted by the subscribers, then the costs for communication will decrease significantly.

新疆煤炭价格单位：                                                          元 / 吨

Coal Price in Xinjiang                                                      Unit: yuan/ton

新疆热力价格

Price of Heat Supply in Xinjiang

新疆天然气价格单位：                                      元 / 立方米

Natural Gas Price in Xinjiang                                  Unit: yuan/m³

 新疆工商注册费

Costs on Registration with Administration of Industry and Commerce

新疆基建成本

Cost of Capital Construction                                      单位：元 / 平方米建筑面积

Unit: yuan/m²(building area)

新疆运输价格

Transportation Service Price

 IV. Development Zones

(i)National Development Zones

1.Urumqi Economic and Technological Development Zone

It was approved by the State Council on August 25, 1994 as a national development zone. The Zone covers a planned area of 16.84 sq. km. We put the Zone mainly to comprehensive development and fineproces sing of abundant resources in Xinjiang; IT industry, biotech industry, new energy, new material, environmental industry and other hi-tech industries, exportprocessing industries targeted at Central and West Asian market and European market; banking, scientific research, trade, tourism, information service and intermediary service. In the Zone, Xinjiang-Peking University Hi-Tech Industry Park has been built, and attracted a number of strong enterprises such as Markor, Guanghui, Shennei Biotech, Jinniu Biotech, Jinfeng Sci-Tech and President Food.

Address : 68 Zhongya Avenue , Economic and Technological Development Zone, Urumqi, Xinjiang Website: http://www.uda.gov.cn

2. Urumqi Hi-Tech Industrial Development Zone

It is one of 53 national hi-tech industrial development zones across China. With establishment approved by the State Council in August 1992, it covers a planned area of 18.75 sq. km. In the Development Zone, efforts are concentrated on developing four major pillar industries that exploit rich resources in Xinjiang: bio-medicine, new materials, new energy, electronics and IT industries.

Address: Torch Hotel, 5, South Beijing Road, Urumqi, Xinjiang

Website: http://www.uhdz.gov.cn

3. Shihezi Economic and Technological Development Zone It is located in the east suburb of Shihezi City and covers an area of 11.2 sq. km. Approved by the State Council in April 2000, the Zone was upgraded to a national development zone. Emphasis is placed on developing pillar industries that use high and new technology and advanced applicable technology such as food, textile, agriculturerelated and building materials industries. Development of papermaking, chemical, energy, medicine and environmental industries will be accelerated.

Address: No.56 Living Zone, Beisilu Road, Shihezi, Xinjiang

Website: http://www.setd.gov.cn

 (ii)Border Economic Cooperation Zones

1. Yining Border Economic Cooperation Zone

In 1992, the City of Yining was approved by the State Council as an open city along border, and in the meantime, the State Council approved that Yining City Border Economic Cooperation Zone be built. The Cooperation Zone covers an area of 10 sq. km. It consists of section of administration and service, section of industries with local characteristics, export-processing section, new and hi-tech industrial section, business and trade section and section of entertainment and tourism.

Address: Liaoning Road, Border

Economic Cooperation Zone, Yining City, Xinjiang

Website: http://www.ynhzq.gov.cn

2. Bole Border Economic Cooperation Zone

Approved by the State Council in December 1992, the Cooperation Zone is located in the east suburb of Bole City. Adjacent to a city and an opened port, it is an ideal place for industrial and commercial development. The Zone covers an area of 78,300 sq. km, and 200,000 sq. m of it has been developed. 220 million yuan has been put to the development of the Zone. In 2005, the industrial outputs of the Zone reached 197.6 million yuan.

3. Tacheng Border Economic Cooperation Zone

Approved by the State Council in June 1992, the Cooperation Zone is in the eastern part of Tacheng City. The Zone is only 6 km from Baktu Port, a national port under Category A, and has a population of more than 20,000. It covers an area of 6.5 sq. km. 65.53 million yuan of investment has been made for the development of infrastructure in the Zone. The work for infrastructure development of the Zone has been mainly completed.

(iii)Regional Development Zones

(iv) Relevant Agencies

Entry and Exit Administration Agencies of Xinjiang

Commercial Agencies