At the sprawling marketplace at the centre of Urumqi's old town, a sense of history hangs heavily. For generations, ethnic Uighurs — the ethnic Turkic-speaking group native to China's far west Xinjiang autonomous region — traded silk and gems here, which reached the Urumqi oasis from the old Silk Road, and made their way to markets in China's far corners. But on a recent hot summer's afternoon, the stalls of the expansive Erdaoqiao marketplace all stood empty. Fear is keeping the customers away.

On July 5 last year, Erdaoqiao was the scene of heavy rioting, as Uighur mobs went on the rampage in Urumqi, ransacking shops, setting fire to buildings and attacking members of China's majority Han Chinese ethnic group. Two days later, Han Chinese mobs exacted revenge, attacking Uighurs in their shops and neighbourhoods. Over four days of bloody ethnic violence, the worst in the People's Republic of China's (PRC) six-decade history, at least 197 people, mostly Han Chinese, were killed. Another 1,700 were left injured.

One year on, calm has returned to the streets of Urumqi, which is Xinjiang's prosperous capital. But tensions between the two ethnic groups still linger. Twelve months after the violence, an already segregated city is getting further divided. Han Chinese residents, who have for long settled in Uighur neighbourhoods surrounding Erdaoqiao, are moving out. “We don't feel safe here anymore,” said one Han Chinese woman, who makes a living selling scarves from Afghanistan and Pakistan. “Hans don't trust Uighurs. Uighurs don't trust Hans.”

Ms Zhang — she asked to be identified only by her last name — moved to Xinjiang 15 years ago from Xian, the central Chinese city famous for its terracotta warriors. In her family's journey to Urumqi is the story of Xinjiang's own development since it came under the PRC's rule in 1949. Ms Zhang's uncle moved to Xinjiang in the 1960s, part of the first generation of Han settlers. Exhorted by Mao Zedong to help develop their country's ‘new frontier' (or xin jiang, in Chinese), droves of young Chinese set out west, looking to make their fortune. Most of them, however, like Ms Zhang's uncle, arrived to find a depressing reality far removed from Mao's depictions of a land of promise — a life of back-breaking farm work in a barren, undeveloped and inhospitable terrain. Since the first batch of migrants, Xinjiang's Han population has continued to steadily rise along with its development — from 6 per cent in 1949 to 40 per cent in 2004, with more than 20 million Han settlers. The migration of Hans has intensified since the 1990s, when the government began encouraging small businesses and entrepreneurs, like Ms. Zhang, to help accelerate the development process.

The changing demographics have become an increasing source of anxiety for Uighurs, as the attacks on July 5 targeting Han businesses suggest. Resentment is particularly high in Urumqi, where Hans now outnumber Uighurs, and disparities between the two groups are most evident. Among young Uighurs is a widely prevailing sense that the best jobs go to Hans, and that those who don't speak Mandarin Chinese are relegated to second-class lives. Outside Erdaoqiao on a weekday afternoon, a group of young Uighurs sit idly, crowding around a small television set and watching a popular Uighur comedian obliquely poke fun at the simmering social tensions. None of them had jobs. “Without Mandarin, you can't find work,” one of them complained. “And if you are Uighur, Han businesses will prefer not to hire you. That is the reality here.” Many of those who rioted in Urumqi's streets last July were unemployed Uighur migrants from Xinjiang's less-developed south, who moved to the city seeking work.

‘Go West' development drive

In 2000, the Chinese government unveiled a massive plan to accelerate development across Xinjiang and bridge internal disparities, through a ‘Go West' development drive. A decade on, it has had mixed results at best. Incomes are rising, and so is the region's GDP. But the development has been largely driven by large State-owned companies who have tapped the region's vast energy resources. It has also brought rising inflation and fuel shortages, prompting many locals, Uighur and Han, to question where the benefits of development were really going. “If Xinjiang is so rich, then why don't we have gas for our cars?” asked one Uighur taxi driver in Urumqi, who, along with hundreds of others, went on strike in October protesting increases in fuel prices. “All the oil and gas is going to Beijing and Shanghai. This development is not for us.”

The Chinese government has denied that its development policies, and rising disparities between Hans and Uighurs, were a reason for last year's unrest. It blamed exiled Uighur separatist groups for organising the violence. What sparked the riots? The violence began after hundreds of Uighurs gathered in Urumqi's People Square — now permanently under the watchful eye of a battalion of the People's Armed Police Force (PAPF) — to protest the deaths of two Uighurs in a factory brawl in southern China. It still remains unclear how the initial protest turned violent. Hours after the first protest, mobs of Uighurs, armed with clubs and knives, and seemingly organised, rampaged through the city's streets. Three Uighur students, who were present at the initial protest, which they said had been organised by local universities, said rumours that a young girl had been killed by police-firing — this could not be verified — had sparked the violence. One official of the PAPF, who was on duty that day and spoke to The Hindu on the condition of anonymity, admitted there were serious lapses in response. “Some of the officers sent out to face the mob were trainees!” the official said. “There were serious miscommunication between the government and the police, and we severely underestimated the scale of the violence. We simply were not prepared.”

The scale of the violence shocked the city. “I saw dozens of Han Chinese bodies being dumped in the gutter in just one street,” said one woman, the daughter of a Han father and Uighur mother. “They came running at me with clubs to attack me, thinking I was Han, but because I spoke the Uighur language I was saved. It is difficult to believe that only 200 people died. There were hundreds of bodies lying everywhere.” The violence, mainly targeting Han Chinese, has left Han residents seething at the local government. Many in interviews accused the government of “appeasing” Uighur rioters and allowing them to vent their anger unchecked, for almost six hours, on the evening of July 5. “Where were the police?” asked one Han businessman in Erdaoqiao. “People were left at the mercy of the mobs. There was no help.”

The riot has left deep scars on both communities. It has also prompted increasing calls, from both groups, for Beijing to reassess its development policies. The ruling Communist Party's highest leaders met in Beijing in May to chalk out a new development plan for Xinjiang. Some important signs of change emerged from the meeting. Significantly, Beijing has, for the first time for any province or region in China, introduced a resource tax in Xinjiang. This will now force energy companies, who have gotten rich off Xinjiang's resources at little cost, to pay the local government for access to oil and gas. This is expected to substantially boost the government's revenues, which officials said would go to development projects.

More significantly, the Communist Party's powerful Xinjiang chief, Wang Lequan, who has directed the region's policies for over two-decades and is known for his hard-line views, has been sacked. He was replaced by a Party boss from Hunan, Zhang Chunxian, known by some as the “Internet secretary” for being technology-savvy and forward-looking. Soon after he took over, restrictions on access to the Internet, in place since last year, were removed. For almost 10 months, Xinjiang's residents and businesses were left with no access to e-mail and allowed to view only 30 government websites in an unprecedented information black-out. Other controversial policies, however, legacies of Mr. Wang's rule, still remain in place. Among them is an emphasis on bilingual education, which requires Uighur school-children to learn Mandarin. Some Uighurs fear the emphasis on Mandarin, required for most high-paying jobs, will eventually result in the marginalisation of the Uighur language and culture.

At Erdaoqiao, business has been badly hit, and many small businesses, Uighur and Han, face bankruptcy. Han Chinese tourists, who drive Xinjiang's once-prosperous tourism industry, have stayed away this year. Erdaoqiao's bylanes are deserted, even though the tourist season has already begun. Ms Zhang's scarves, in a glittering array of blues, reds and greens, gather dust on the shelves. “There is an atmosphere of fear,” she said. “These days, the only people buying my scarves are the riot police.”

The riots have left deep scars on both — Hans and Uighur — communities. They have also prompted increasing calls for Beijing to reassess its development policies.