Building Dubai in China: The story of Karamay

The glitz and glam of China’s most prosperous cities can now rival any in the world; take anyone to Shanghai, Beijing, Shenzhen or Guangzhou for the first time and it is likely they will be astounded by the level of development. Yet surprisingly, none of these cities takes the title of China’s richest city on a per capita basis. What’s more, not many people would give much time to finding said city in one of China’s most underdeveloped provinces…Think again! For years, a small city in China’s Xinjiang Uyghur Autonomous Region by the name of Karamay (克拉玛依/قاراماي) holds the title of China’s richest city by GDP per capita. One example of the wealth that the city was able to accumulate throughout the past decades is the development of water-transfer canals, which redirects the stream of the Irtysh River that also flows through Kazakhstan and Russia. This water is now flowing through artificial canals of the city and gives its industries and inhabitants a completely new outlook on life in the Junggar Basin.

Given that Karamay is home to the largest oil fields in China, it is not hard to identify the source of its wealth. Locals describe the myth of the city’s success in one sentence: “A while ago an old man with a donkey discovered oil fields in the desert and the rest is history”. His statue is now carefully watching above the same fields that are now frequented by tourists.

Just like Dubai, Karamay is using its new-found wealth to bolster its tourism sector. As Karamay’s local government puts it, “boundless deserts, magnificent mountains, beautiful lakes, vast grasslands, and even the otherworldly Yadan rock landforms are just some of the attractions drawing tourists to Karamay the world over”. In 2015, 3.5 million visitors came to the city, more than doubling the figure from five years prior and creating over 50,000 jobs for local people.

While prospects for tourism are good, if Karamay is to aspire to Dubai’s levels of development then greater industry diversification is necessary. Here, many of the signs point in the right direction.

The city’s location in the far North-West of China permit it to benefit greatly from China’s Belt & Road Initiative (BRI). Xinjiang province has already been dubbed as a gateway into Central Asia, and from our conversations with Karamay’s local officials, the city understands this unique positioning in time and place in the context of the BRI. Large technology and communication giants such as China Mobile and Huawei are already investing in Belt and Road data centres in Karamay, along with other communication infrastructure and technology. Major state-owned energy providers such as New Energy Ltd. have set their eyes on the city. In August 2016, The Silk Road Economic Belt- Xinjiang Karamay Forum, also known as the “Davos Forum in West China”, was held in Karamay and saw the city sign 28 BRI contracts with estimated valued of 62.57 billion yuan ($9.43 billion).

It remains to be seen how Karamay can create closer economic ties to Central Asian countries or whether the city is able to fully convert its wealth from mineral resources into the right education infrastructure and technologies. However, should it be able to continue to lay the groundwork now and benefit from the BRI, then it might not need a fortune teller to see that this otherwise inconspicuous place could become China’s own Dubai over the coming decades.