May 24 (Bloomberg) -- Energy and chemical makers based in Xinjiang rose in Shanghai on a report saying China plans to spend 50 billion yuan ($7.3 billion) to expedite coal, power and pipeline projects in the province three times the size of France.
Xinjiang Tianfu Thermoelectric Co. surged by the daily limit of 10 percent to 11.75 yuan while oil and gas supplier Xinjiang Guanghui Industry Co. advanced 5.2 percent to 28.66 yuan at 11:29 a.m. local time. Xinjiang Urban Construction Co., a builder of roads, bridges and water facilities, jumped 10 percent. The benchmark Shanghai Composite Index rose 3.1 percent.
The government in Beijing plans to increase energy investment in Xinjiang over the next three years, China National Radio reported May 22, citing Wu Yin, a deputy director at the National Energy Administration. The province, roiled by ethnic violence last year, will also move to taxing resources by price than by volume to boost government revenue and spur development.
“It’s a very sensitive region politically and the government wants to make Xinjiang richer and more stable,” said Wang Aochao, head of China energy research at UOB-Kay Hian Ltd. in Shanghai. “There’s a question mark over whether all companies operating there will benefit. Oil and gas companies could be affected by the resources tax, but infrastructure companies will probably benefit from this investment.”
Social stability in landlocked Xinjiang has been a priority since the provincial capital of Urumqi suffered China’s deadliest rioting in decades in July 2009 when clashes between ethnic Uighurs and Han Chinese left at least 197 people dead. The country’s President Hu Jintao pledged last week to raise per capita gross domestic product in the region to the national average by 2015.
Rich in Resources
In Shenzhen trading, Xinjiang Goldwind Science & Technology Co. rose 3.4 percent to 23.42 yuan. Xinjiang Zhongtai Chemical Co. gained 4.6 percent to 23.06 yuan in the southern city, while Xinjiang Zhundong Petroleum Technology Co. advanced 3.6 percent to 26.89 yuan.
Xinjiang holds 15 percent of China’s oil reserves of 2.89 billion tons, according to the latest figures available from the National Bureau of Statistics. The province has the biggest reserve of natural gas, accounting for 22 percent of total reserves of 3.4 trillion cubic meters. It also has the fifth-largest reserves of coal.
China has discovered 360 million metric tons of heavy-oil deposits in Kelamayi in Xinjiang, the official Xinhua News Agency said today, citing a unit of PetroChina Co., the nation’s biggest oil producer.
PetroChina gained 2.1 percent to 11.07 yuan in Shanghai trading, while its smaller rival China Petroleum & Chemical Corp. rose 2.4 percent. China Shenhua Energy Co. advanced 3 percent.
To contact the reporter on this story: Ying Wang in Beijing at email@example.com
To contact the editor responsible for this story: Amit Prakash at firstname.lastname@example.org.