China launches extensive gas pipeline project

Natural gas is at the center of the government's investment in China's far west

Initiative to spur development in western provinces

In this story: Construction under way 'Distribution of wealth' RELATED STORIES, SITES

KASHGAR, Xinjiang (CNN) -- Fearing possible dissatisfaction and social unrest in the western provinces, Chinese officials are making regional investment an economic priority.

VIDEO CNN's Rebecca MacKinnon reports on the economic changes taking place in China's westernmost provinces Play video (QuickTime, Real or Windows Media)

The key to the plan is natural gas.

Chinese leaders are planning to construct a 40 billion yuan ($5 billion) pipeline to transfer to China's east coast the natural gas from beneath the deserts of Xinjiang province in the country's west.

In 1997, Chinese officials signed a deal with Kazakhstan to construct pipelines to move Xinjiang's oil, which is believed to be in abundance, to eastern China and Kazakhstan.

The old section of Kashgar, a city in the far western Xingjiang province, looks about the same as it has for centuries

"The government's main purpose in tapping Xinjiang's natural gas is to push the economy forward and raise living standards," Xinjiang Gov. Abulait Abdurexit told CNN.

"It will generate a lot of jobs for (suppliers of) building materials and (builders of) supporting infrastructure," the governor said.

Construction under way

Beijing has long been worried about a large-scale Muslim uprising in Xinjiang, and in 1997 asked Kazakhstan to stop providing refuge to Uighur separatists.

Infrastructure construction is under way in Kashgar, one of Xinjiang's cities. High-rise apartments are being built, a new railroad line is already open and roads linking that line to the city are under development.

Women in the old section of Kashgar make a few extra yuan by embroidering hats

Otherwise, the city, where China, Central Asia and India converge, has not changed much from past centuries. Kashgar is like a huge bazaar, a trading spot along the ancient Silk Road. Hordes of people -- on camels, horses, donkeys and old buses -- have for years arrived at the city's street market.

Local Muslim women still embroider traditional hats of the Uighur minority to make a few extra yuan, which is the local currency.

Unemployment has long been a problem for Uighur men. They have charged that the government only gives jobs to ethnic Chinese. Uighur men lost a large number of jobs in the mid-1990s to ex-convicts relocated by Beijing.

Between 1994 and 1997, Chinese authorities resettled in Xinjiang more than 40,000 people released from "re-education camps" as reformed laborers and farmers.

The widening economic gap within China has prompted the government to make investment in China's western provinces an urgent economic priority

'Distribution of wealth'

The Xinjiang Production and Construction Corps -- a semi-military group for former Chinese soldiers, convicts and frontiersmen -- has developed much of the province.

In addition to oil wells and highways, they have built irrigation systems that have used melting snow to turn desert into farmland.

Experts, however, say the success of the current development initiative could depend on whether problems like corruption and carpet bagging can be controlled.

"The problem in Xinjiang is really not so much investment and economic development," Dru Gladney, of the University of Hawaii, told CNN.

"It's distribution of wealth. And there the Chinese government has not convinced the local population that they're getting their fair share," Gladney said.

CNN Beijing Bureau Chief Rebecca MacKinnon, Time Asia and Reuters contributed to this report.