1.7 Trillion Investment: Why Energy Layout Bets on Xinjiang

Question AI · How do central enterprises’ investments in Xinjiang help buffer international energy supply risks?

When the Strait of Hormuz conflicts persist and international oil prices surge past $120 per barrel, a major signing has shaken the energy sector: 170 billion yuan in investments, 18 energy giants deploying 92 high-end projects, with Xinjiang becoming the “ballast stone” of energy layout.

On March 13, the Xinjiang Uygur Autonomous Region and the Xinjiang Production and Construction Corps held a 2026 central enterprise industrial Xinjiang development work symposium in Beijing with the State-owned Assets Supervision and Administration Commission of the State Council. Before the symposium, the autonomous region and the corps signed cooperation agreements with 18 central enterprises, involving 92 projects across energy, minerals, computing power, equipment manufacturing, and other fields, with an estimated industrial investment of about 170 billion yuan in Xinjiang.

The large-scale deployment of central enterprises in Xinjiang reflects its unique position in China’s energy map. Xinjiang holds over 22% of the country’s land-based oil reserves, 28% of natural gas reserves, leading in solar energy resources, and second in wind energy reserves. This resource structure, combining coal, oil, gas, and clean energy, makes it no exaggeration to call Xinjiang China’s “ballast stone” of energy.

According to estimates by Société Générale, even if the Strait of Hormuz blockade causes supply disruptions, China’s vast crude oil reserves could buffer the risk of supply interruption for nearly 300 days. Xinjiang is a key strategic reserve to ensure China’s energy supply is not solely dependent on imported oil.

Xinjiang’s strategic value lies not only in its abundant resources but also in its “strategic depth” for China’s energy security. For a long time, China’s energy imports have heavily relied on maritime routes like the Malacca Strait. Located in the heart of the Eurasian continent, Xinjiang is the starting point of the “West-East Gas Transmission” project and a crucial hub for future land-based energy corridors. When tensions rise in the Strait of Hormuz and maritime energy transportation faces geopolitical risks, Xinjiang becomes an important domestic strategic buffer and solid support for energy supply.

During the 14th Five-Year Plan, central enterprise investments in Xinjiang have exceeded 1.1 trillion yuan, with a single-year investment of 265.7 billion yuan in 2025. Behind these figures is an accelerating national energy strategic pivot. From oil and gas exploration and development to new energy base construction, from advanced coal chemical industries to the “East Data West Computing” project layout, Xinjiang is transforming from a traditional energy exporter into a modern energy economic hub.

This intensive deployment of central enterprises in Xinjiang aligns closely with the top-level design of the “14th Five-Year Plan” regarding energy security and green development. China’s energy strategy is undergoing a profound structural transformation.

The first change is shifting from single energy development to a modern energy system with multiple energy sources complementing each other. Among the 92 projects signed, there are traditional oil and gas projects as well as emerging fields like new energy and computing power. This layout reflects an energy system transformation—moving away from isolated development of various energy types toward integrated, complementary energy systems. Xinjiang’s abundant coal resources can form an optimized “coal power + new energy” combination with wind and solar resources. Pumped storage projects can provide regulation capacity for renewable energy absorption, and computing projects can develop in synergy with energy sources through “source-grid-load-storage” integration.

The second change is moving from resource extraction to industrial chain extension. Past energy development often involved “dig and leave,” with resource-rich areas and processing/consumption zones severely separated. The notable feature of this deployment is the extension and high-end development of the industrial chain—covering energy extraction, local conversion, primary processing, high-end manufacturing, and energy production to computing services. This shift means Xinjiang is transforming from an “energy warehouse” into an “energy industrial base.” Economically, this allows resource-rich regions to share more of the value added from the energy industry. Strategically, it shortens the energy supply chain, enhancing system resilience. Large-scale green electricity integration also helps reduce dependence on fossil fuels, providing low-cost, sustainable energy for stable economic operation.

The third change is moving from passive risk response to proactive safety shaping. As global energy geopolitical risks intensify, energy security has evolved from merely price stability to systemic challenges involving route security, supply chain resilience, and reserve capacity. Future energy layouts will increasingly emphasize domestic capacity strategic reserves, land-based energy corridors, and emergency response capabilities. Xinjiang’s resource endowment and geographic advantages will play an irreplaceable role in this strategic transformation.

The 170 billion yuan investment is not the end but the starting point of a new round of energy strategic layout. It represents not only an optimization and reshaping of China’s spatial energy distribution but also a new path for regional economic coordination from “point breakthroughs” to “full-area linkage.” With the advancement of the “Belt and Road” energy cooperation, Xinjiang is becoming an important energy hub connecting Central Asia and South Asia, capable of energy exchange via land pipelines with neighboring countries, forming a diversified international energy cooperation network. Whoever seizes the energy lifeline will hold the initiative for development. Xinjiang is actively helping China gain this initiative.

(Author: Li Xiaodan)