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China to boost financial help for troubled Xinjiang
February 12, 2015 / 11:23 AM / 3 years ago

China to boost financial help for troubled Xinjiang

BEIJING, Feb 12 (Reuters) - Four of China’s top financial regulators vowed on Thursday to step up policy support for the poorer southern portion of the troubled western region of Xinjiang to boost economic development and ensure stability there.

Hundreds of people have been killed in resource-rich Xinjiang, strategically located on the borders of central Asia, in violence in the past two years between the Muslim Uighur people who call the region home and ethnic majority Han Chinese.

The government has also blamed attacks elsewhere in China, including Beijing, on Islamist militants from Xinjiang.

Authorities have employed a carrot and stick approach to bring Xinjiang under control, massively ramping up security but also pumping in money, in a recognition of the economic roots of the unrest, especially in the poorer southern portion.

In a joint statement, the regulators, including the central bank, said they would deepen indirect fund-raising, expand direct financing, encourage financial innovation and step up infrastructure projects.

Favourable monetary policies, such as differentiated required reserves, will be used to spur financial institutions to increase the amount of credit available for southern Xinjiang region, particularly for agriculture and small companies.

Banks should “improve tolerance” of non-performing loans, as long as risks are well controlled, and set up branches in poorly served areas, the regulators added.

But authorities will also have to increase efforts to fight terror-related money laundering, they said.

Many Uighurs complain that only the Han benefit from Xinjiang’s economic growth, as a result of discrimination and the poor educational levels of Uighurs, including lack of fluency in Mandarin, the national tongue.

Xinjiang is crucial to China’s growing energy needs, but foreign experts and rights groups say the bulk of the proceeds from sales of its resources has gone to majority Han Chinese, stoking resentment among Uighurs. (Reporting by Ben Blanchard)

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