Lake Kokonor, Northwest Tibet near Xining
Business beware China's northwest war zone (Asia Times)

By Xu Yufang, Asia Times, Bangkok May 4, 2001

BEIJING - Businessmen exploring investment opportunities in the northwest of China should be aware of this piece of information: neither local authorities nor the State Council in Beijing have the final say on economic proposals for the region. Indisputably, the real power rests with a military-dominated body called the Lanzhou War Zone National Economy Mobilization Committee (LWZNEMC).

Despite a lack of publicity, several northwestern provinces and autonomous regions (provincial territories with ethnic minorities dominating) are in a state of war in the face of Islamic separatist activities. The troubled areas cover Xinjiang, Ningxia, Qinghai, Gansu and Shaanxi, which constitute the Lanzhou Military Region.

The unstable situation could have a direct impact on investment in the construction of the Qinghai-Tibet railway, which when completed will be the world's highest and longest, linking the southwest Tibet Autonomous Region with the rest of China, extending more than 1,118 kilometers on the Qinghai-Tibet plateau.

The official goal of the railway, extending from Lhasa in Tibet to Gormo in Qinghai province, is to further develop the economy of Tibet, which in turn is expected to benefit the other remote western parts of China.

Among China's various military regions and formations, three units are now at a stage of preparing for war - the Lanzhou and the Nanjing Military Regions, and the Second Artillery (missiles) Force.

There is, however, a basic difference in the stage of mobilization for war between the geographic regions of Lanzhou and Nanjing. Nanjing's war is confined to maneuvers within the armed forces and seldom extends beyond the camps. Lanzhou's war on the other hand is no game - it is a very real battle against terrorist and sometimes guerrilla assaults in towns and streets.

As Lanzhou's war is so real, the whole region is under military mobilization. Most parts of Xinjiang and some parts of Ningxia and Qinghai are considered the frontline. Gansu and Shaanxi appear to be more peaceful, but they make logistic bases for the frontline. The two provinces have also to be prepared for assaults spreading from the frontline. In times of war, everything is subordinated to military targets, and the LWZNEMC was established for liaison with the local civilian authorities to make sure all economic activities within the war zone comply with military objectives.

This means that all plans for major infrastructure projects have to be sanctioned by the LWZNEMC. The list includes airports, ports, railway, highways, postal services, telecommunications, energy transportation and large warehouses. The LWZNEMC has decreed that all major projects in these categories must serve both military and civilian purposes and must involve military representatives during the course of construction.

Smaller investors who do not have the capacity to participate in major infrastructure works may suggest they have nothing to do with the LWZNEMC. However, they may experience the committee's impact if one day the infrastructure service provided to their small investment is deemed incompatible with war zone mobilization needs. The possibility may be slim, but people need to be prepared for such an eventuality.

Investors interested in Xinjiang have also learned that there are in fact two provincial authorities in the territory. Parallel with the Urumqi-based people's government of the Xinjiang Uygur Autonomous Region, there is the even more powerful Xinjiang Production and Construction Corps based at Shihezi, a military unit that oversees numerous agricultural and engineering projects and effectively manages many towns throughout the autonomous region. Investors who seek approval from the Urumqi but fail to address Shihezi will pay the price.

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