A model of the 280-meter-tall twin towers, part of the Kashgar Development Mansion. Zhao Ge / Xinhua

Tariff-free zone

The Kashgar SEZ will also feature a tariff-free zone, which is due to be fully operational by October, according to Mutalif, the commissioner from Kashgar.

"The TFZ, managed by the customs authorities, is also a storage and logistics center where Chinese and foreign companies can trade freely," he said, noting that more than 16 enterprises have built manufacturing and logistic facilities in the zone.

Chang Liang, director of the TFZ, said it serves four land ports, a rare situation in China: "Kashgar's neighbors and their transport systems are at a lower stage of development at the moment, which has affected trade a lot. Also, some of the countries are unstable occasionally. For example, Irkestam, a land port in Kyrgyzstan, had to be closed temporarily in 2010 after a riot broke out in the nearby city of Osh."

Despite the challenges, Kashgar has decided to start providing duty-free shopping from 2015: A 100,000-square-meter shopping area will be opened in the 280-meter tall twin towers that are currently under construction as the first part of a development called the Kashgar Development Mansion.

Visitors to Kashgar will be allowed to buy duty-free goods in the shopping area, as long as they are in possession of valid plane tickets and travel documents, according to the administration of Kashgar SEZ.

To be as successful as Shenzhen, the Kashgar SEZ needs to place itself effectively in the national strategy, said Li Yan, director of the School of Economic Studies at the Xinjiang Regional Party School.

"Kashgar needs to learn to maximize the advantages inherent in the policies prescribed by the government. China is in a different phase compared with when the Shenzhen SEZ was established, so Kashgar needs to fulfill the responsibilities the government has laid down for it," she said.

Economic growth in China's eastern region has begun to slow and the country desperately needs to explore the markets in the western regions and Eurasian countries to sustain development. The Kashgar SEZ could act as a platform to attract businesses specifically seeking new opportunities in the west, Li said.

"Technological innovations and logistics are not things at which Xinjiang excels, but the region shares similarities in culture and religion with neighboring countries. We have the advantage of understanding their market needs, so we can point businesses in the right direction," she said.

Re-establishing links

Setting up SEZ in China's far west will not only benefit the region, but also help neighboring Central Asian countries by re-establishing historic links between former Silk Road cities, allowing the flow of people, goods and funds to begin again, she added.

For Yuan Kaifang, an entrepreneur from Shaanxi province who has been doing business in Kashgar city for about 25 years, many businesspeople are looking at the western region from the wrong perspective, employing a "glass half-empty" approach which prevents them from recognizing the area's huge potential.

"My friends always say Kashgar is the westernmost city as a way of emphasizing that it's such a long way from Beijing, but I keep telling them to look at it from the point of view that it's also the closest city to the Eurasian countries. I've been encouraging them to invest now, before it's too late," he said.

Yuan recalled that when he first arrived in Kashgar in 1989, the tallest building in the city was just three-stories high. He was one of the first businessmen to pre-buy a suite of offices in the twin towers.

He added that it's perfectly normal for new investors to be concerned about the effects of unrest and terrorist attacks, but was keen to reassure those harboring doubts: "The truth is that opportunities won't disappear because of such attacks, and they won't affect the core social and economic development. If the government wasn't confident about the situation in Kashgar, it wouldn't have established an SEZ here.

"When the SEZ was first established in Shenzhen, no one could have foreseen just how successful that little fishing village would become. Who knows what Kashgar will look like in 30 years?" he said.

Gao Bo in Urumqi contributed to this story.