It is increasingly urgent to promote economic development and improve the living standards of people of all ethnic groups in southern areas of Northwest China's Xinjiang Uyghur Autonomous Region, now that the situation in the region has stabilized.

The China-Pakistan Economic Corridor, a key part of the "One Belt, One Road" initiative proposed by China's top leadership, will offer a historic opportunity to boost the economy in southern Xinjiang.

To break the bottleneck in local economic development, the less-developed southern part of Xinjiang needs to create innovations in its economic system and find new ways in which it can receive support from other areas. Previously, other provinces supported southern Xinjiang mainly through government-led land development.

However, relying on tax revenues from land development is no longer the best way for southern Xinjiang to capitalize on the policy advantages from the "One Belt, One Road" initiative.

Currently, other provinces are busily improving their local investment and financing systems through mixed-ownership reform. Southern Xinjiang should also speed up mixed-ownership reform because it receives a large amount of funding from the central and local governments. Local governments should not only introduce private capital into infrastructure construction projects in their jurisdiction; they should also jointly launch franchise projects with private sector firms and introduce public tenders to help with the construction of the China-Pakistan Economic Corridor.

In this way, local governments in southern Xinjiang could help expand investment and create more jobs.

Meanwhile, economic system innovation should also include developing a framework to improve the investment environment for companies from all sectors. The prosperity of the China-Pakistan Economic Corridor will ultimately depend on the efforts by companies from all sectors. In addition, the corridor should not serve only as a way to promote trade but also as a means for enhancing the cooperation between different industrial sectors in countries along the "One Belt, One Road" route in order to improve the quality of China's overseas investment.

The city of Kashi is the starting point of the corridor, and it should create a sound investment environment for enterprises and attract firms that can engage in cooperation in industrial sectors across the border.          

The "One Belt, One Road" initiative can also give the rich agricultural and mining resources in Central Asia access to the global market through cooperation with China's manufacturing industries.

Chinese industrial enterprises can set up joint ventures with their counterparts in Central Asia to serve Europe and inland Asian markets.

This would help in attracting global investors.

Centrally administered State-owned enterprises should be the pioneers in cross-border cooperation.

Therefore, the China-Pakistan Economic Corridor can help make Kashi an industrial cooperation hub for Central, South and West Asia.

The author is chief economist of AVIC Securities. bizopinion@globaltimes.com.cn