Comparative advantage

We were guests of the Changi City government which showed us their special light industrial zone in the sand-swept plains of Xinjiang, officially Xinjiang Uygur Zixhigu, an autonomous province in the northwestern border of mainland China. Xinkiang is predominantly populated by the Uighurs, a hardy tribe different in race from the Hans who have dominated this vast and most populous nation on earth for centuries.

It took us five and a half hours to fly from Shanghai where we landed to reach Urumqi, capital of Xinjiang province which was 4,500 land kilometers away, from East to West. Xinjiang is the Chinese province which borders Kazakhstan, Mongolia, Turkmenistan, Khyrgystan, Tajikistan, Afghanistan and Pakistan, from its north through its west.

Urumqi is populated by both Hans who have settled there for the past four generations, to the native Uighurs who now speak Mandarin as well as the Hans, but have maintained their distinct culture and traditional practices rooted in their Muslim faith. It is a city still struggling with the modernity that has swept most every other capital and province in China, as much as its neighboring Mongolian Autonomous Region or Nei Mongol Zixhigu, and the Tibetan Zizang Zixhigu. But while there are some ethnic rumblings in Xinjiang, the situation is far removed from the ferment in Lhasa, the Tibetan capital, where China’s hegemony over the Lamas has been of relatively recent vintage compared to the centuries of assimilation that Xinjiang has had from the time the Hans subdued the Muslim pashas.

After discussions with the Changi City officials including the resident Communist party secretary (the real political power in every Chinese province) who showed us the world-class infrastructure that they had set up in what looked like barren wastelands, we were impressed at the tenacity by which Beijing pursues its economic development. In Denq Xiao Ping’s time, emphasis was on developing world-class infrastructure and industrial centers in a few Eastern capitals, notably Shanghai, Shenzhen, Guangdong, Fuzhou and Hangzhou. With that, in a short period of less than two decades, China has become a global economic power, with international reserves of more than 2 trillion US dollars. Now, it is aggressively pursuing development in the countryside, for food security in its central plains, and export-based industries in its heretofore under-developed provinces like Mongolia, Xinjiang, Yunnan, Guangxi and Heilongjiang borders with Central Asia, Korea, India, Pakistan, Myanmar and the indo-Chinese countries of Laos and Vietnam.

Economists call it the law of comparative advantage, which means that nations possess an advantage in resources or people greater or lesser than others, and development efforts must center on optimizing such advantage. Xinjiang province is one-sixth of China’s total land area. It is six and a half times bigger than the Philippines. But most of this land is arid or mountainous, which makes it so difficult to cultivate. Which also explains why it is, along with the Mongolian autonomous region, China’s least populated. Because of this, Xinjiang has been among the least developed of China’s 33 provinces.

But Xinjiang has oil and gas, and minerals to boot. It is one of China’s depositories of coal, which is used both for energy and the production of steel. And in the few arable areas where rain is so rare and water is impounded from dams which catch the melting snows from the Karakoram, Tian and Altay mountain ranges to irrigate their farms, the Uighurs produce the sweetest grapes, melons, pomegranates and apricots in the Central Asian region. One is hard put to explain how their Han Chinese tutors coaxed the nomadic Uighurs to farm land so rocky and the topsoil so thin. But they do.

We used to say the Philippines is so blessed with land so fertile that you could throw seeds into the land and let nature take its course. So true, yet it is pathetic to think that the Philippines has to import fruits, and grains, and almost everything else. The hardy Xinjiang people maximize their comparative advantage in gas and minerals, yet still force their thin soil to produce the best fruits in all Cathay.

Now they are going industrial, with plenty of help from the central government, Everywhere you go, wide highways are being built. Every city is building a new airport that would put our un-opened Terminal 3 to shame. Why all this flurry of activity?

Because the new republics like Kazakhstan, Kyrgystan, Turkmenistan, Tajikistan, since separated from the once monolithic USSR, constitute a new market for manufactures that they can produce, from food to clothing, to appliances. This time, proximity to the emerging markets becomes Xinjiang’s comparative advantage. And they are preparing for it with feverish pace and singular direction.

Recall what Napoleon Bonaparte once said of China, in his time a backward nation torn by internecine strife among warlords and tribes. "Let China sleep, for when it awakes, the whole world will tremble." the great French leader said.

China has awakened. The world has begun to tremble. Wait till it starts running at full pace.

It makes you feel sad and depressed that a country so resource-blessed, with climate so kind and water so abundant, could be poor like the Philippines.