1. Northwest China
General Overview
The provinces that comprise northwest China occupy a large chunk of China’s land territory yet
constitute only a small fraction of the country’s population; its population density resembles that of
neighbouring Siberia and Mongolia far more than the crowded eastern half of China. A scattered
population, combined with a hardscrabble landscape, have presented enormous logistical challenges
to northwest China in the past. In terms of per capita GDP, the residents of Xinjiang, Tibet, Gansu,
Ningxia, and Qinghai Provinces significantly lag behind their coastal Chinese counterparts. Yet the
region’s abundant natural resources and proximity to several foreign countries have made it a
significant component of China’s overall economic strategy.
The northwest region plays a pivotal role in China’s relationship to its central Asian neighbours to
the west. Beijing has signed accords with Kazakhstan to build an oil pipeline and Turkmenistan to
pump natural gas into China. Both will traverse northwest China and head into more populous
markets to the east. Much of China’s domestic reserves of these vital energy resources lie in the
northwest, only adding to the region’s role in supplying the country’s energy needs.
Logistical Overview
Logistics and transport networks have much room for improvement in northwest China. Within
Xinjiang, the region’s largest province, the use of third party logistics providers is anaemic, and
comprehensive service and information networks are lacking. The situation elsewhere in the region
is scarcely better, though government investment in modern logistics centres in Ningxia and Tibet
are positive signs that capabilities will increase in the future.
Transport links within the region are also improving; of particular interest here are links to Central
Asian countries to the west. At present, only one rail line exists between China and Central Asia.
Feasibility studies and plans exist to rectify this situation. Kashgar, home of China’s westernmost
railway station, may soon have direct rail links to destinations in Kazakhstan, Uzbekistan, and
Pakistan, allowing for cheaper transport of vital goods across the region.
Likewise, the railway line linking Golmud, Qinghai with Lhasa, Tibet has already brought some
logistical development to China’s poorest region. A new logistics centre in Nagku County, Tibet—the
world’s highest in elevation—could stimulate Tibet’s economy and well as provide access to
Qinghai’s mineral reserves.
The importance Beijing places on its relationship with central Asia underscores northwest China’s
potential for economic development. In order for this to happen, though, the region has to realise
greater logistical efficiency.
Key Dynamics
 Economic cooperation with Central Asia; China’s thirst for natural resources means that the
northwest is poised to become the nexus of an increasingly important trade relationship

2.  New investment in logistics centres could significantly reduce logistics costs in a region beset by
great distances and inhospitable terrain
 Kashgar, a historically significant trading centre along the Silk Road, could become a major
central Asian rail hub linking China to emerging markets to its West
 New rail links emanating from Qinghai Province could unleash its economic potential after
centuries of isolation