“Industry is necessary for the Corps to achieve exceptional, bounding development,” said Chen Demin, political commissar of the Xinjiang Production and Construction Corps (XPCC). To further consolidate industrial development, the Corps must properly manage the relationship between industrialization and commercialization; as well as the relationship between industrialization and diversification of investment by property owners. It should integrate industrialization with economic structural adjustment. The Corps’ policy is: “Relying on agriculture to promote industry; encouraging growth in enterprise-scale through integration; and promoting the processing industry by extending the industrial chain.”
Launching an “enterprise aircraft carrier” led by agriculture is the first stroke of the Corps. Starting from 2000, the Corps initiated joint-stock reform to meet the requirements of a modern enterprise system. Suntime International Group used to be a small wine workshop. Now it produces 55,000 tons of dry wine annually; and has become China’s largest modern winemaking enterprise. In 1995, Xinjiang Tianhong Paper Industry Company Ltd. could only produce 10,000 tons of paper products. In 2002, its output grew to nearly 40,000 tons. As of December 10, 2007, the Corps will have 11 listed “aircraft carrier” companies, raising more than three billion yuan in funds.
The second stroke is deepening and enhancing agricultural product processing. Xinjiang Chalkistomato Co. Ltd. used to only produce tomato sauce. During the reform, they began to process peeled tomatoes and quick-freeze tomato cubes that are preferred by European and US consumers. Moreover, the company did everything possible to extend their tomato processing chain, such as extracting red pigment from tomatoes and producing medicines. Today, the company produces more than 50 kinds of tomato-based products. As a result, the company has rapidly expanded its scale of production. Its production capacity has now reached 180,000 tons. As the world’s third largest tomato products manufacturer, the company occupies 70% of the tomato market in Europe.
From closed to open
A few years ago, a well-known national economist described the Corps as an “isolated island in the vast ocean of the market economy.” If the Corps cannot integrate its economy into the greater market economy, it will be broken down. In 1999, the Corps’ GDP only accounted for 1/7 of the entire autonomous region. During the “Ninth Five-Year” period, the average growth of GDP of the Corps reached 8.7%.
While recalling its history, Corps Commander Zhang Qingli pointed out that the Corps system can never replace a market economy. Only by combining the special nature of the Corps with the popularity of the market economy; accelerating institutional and mechanical innovation; and pushing forward market-oriented reform, can the Corps walk out of the doldrums and achieve leapfrogging development.
The Corps’ party committee, in a rather timely manner, brought up the policy of “broadening agricultural sectors, opening the regiment’s door, and, exploring more profit channels.” It decided to intensify foreign investment attraction; while accelerating the development and construction of Wujiaqu, Alar, Tumushuke, and attracting foreign investment into these new towns.
A few years ago, the Shihezi Economic and Technological Development Zone contained only a few buildings. During a recent visit to the Zone, quite a few skyscrapers could be seen. Wide, straight roads extended in all directions. Just a few years later, a group of well-known companies opened offices here: the Ting Hsin International Group, the United States Pricesmart Company, Japan’s Mitsubishi Heavy Industries Ltd., TCL, and the Wahaha Group, were among them. So far, 308 enterprises have registered in the Shihezi Economic and Technological Development Zone, including 25 foreign-invested enterprises. In the last two years, the Shihezi Economic and Technological Development Zone has attracted foreign investment amounting to 1.5 billion yuan – equal to the total amount in the first eight years. The No. 8 Division Shihezi party secretary, Song Zhiguo, expresses excitement and gratification when talking about this.
The Corps’ work in summoning trade in new towns is also impressive. Wujiaqu City alone has signed 58 project contracts in the first six months, introducing more than 400 million yuan in funds. Tumushuke introduced 14 projects with a total of 100 million yuan of funds. Alar signed more than 30 project contracts, involving nearly 200 million yuan. Just a few years ago, the new towns had a blank record for foreign investment.
During the China Urumqi Foreign Economic Relations Trade Fair that recently concluded, the Corps signed contracts involving over 500 million USD of capital. It also signed nine project contracts with foreign investors; internal trade turnover reached 1.85 billion yuan, and 22 contracts were signed totaling more than 5.5 billion yuan.