The ancient Silk Road city of Kashgar has been given state level approval to establish itself as an economic development zone, the first in Western China.

Kashgar, in China’s far west Xinjiang Province, is close to borders with Pakistan, Kyrgyzstan, Afghanistan, Uzbekistan, and Tajikistan and already hosts Central Asia’s largest market. The city effectively links China and Central Asia and is to be developed into a major trading and logistical bridge.

The EDZ will be based on the existing Kashgar Central and Southern Asia Industrial Park, which is close to the airport and downtown areas. Although only 5 square kilometers, the park will initially be expanded to 8.5 square kilometers and is expected to reach 160 square kilometers.

Kashgar is already a major market for retailers from Central Asia. Every Sunday, traders from across the region congregate at the world’s largest open air market to trade – everything from carpets to horses and from hair clips to plastic sandals. About 65 percent of products exported from Kashgar are garments, while daily essentials make up 30 percent.

The development of Kashgar is expected to have a significant impact on the region, and although much improvement in road infrastructure needs to be made – the route to Pakistan is the Karokoram Highway and is prone to landslides and collapse – the potential for rail links to be developed heading south into Gilgit and beyond to link up with Pakistan’s main railway infrastructure would significantly enhance trade. Comparisons are already being made with the development of Shenzhen, which borders Hong Kong and has been converted from a sleepy fishing village to a major import-export hub.

"We have long been interested in Xinjiang Province and commissioned a feasibility report to look at investing in the area two years ago," said Chris Devonshire-Ellis, principal of Dezan Shira & Associates. "The potential for a massive increase in cross-border trade is definitely there, and this news is very positive for Kashgar and for the stability of the region as a whole. We would encourage traders familiar with Central Asian culture to seriously look at Kashgar. We have been stressing the importance of the recent developments on China’s borders, and Kashgar is another example of the business opportunities that exist along China’s frontier regions."