Reading notes | 27 November 2013, by Martin Saxer

Notes on Karrar’s Merchants, Markets, and the State

Karrar, Hasan H. 2013. Merchants, Markets, and the State. Critical Asian Studies 45 (3): 459-480.

Karrar’s writes that the “appropriation of the Silk Road imaginary by the state” has two short comings:

First, state imaginaries of the Silk Road are hegemonic ones that posit the state as the regulator of trade, and second, they ignore the informal economy that runs parallel to the formal economy. {Karrar 2013@462}

Karrer argues that the informal trade between Xinjiang and Central Asia/Pakistan is not a result of the “retreat of the state” and but tolerated by the state. Like formal trade in raw materials, oil, and gas, informal trade remains embedded in state infrastructures: roads, passports, open crossings, etc. are essential vehicles without which nothing would work.

Karrar quotes Li Donghui, vice chairman of Xinjiang, saying 23 January 1995: “A quick and effective way to promote local economic development and help minority nationalities overcome poverty is to encourage prosperous border trade” {Karrar 2013@467}. Because trade is seen as ultimately beneficial for the development of the region and thus its stability, entrepreneurship is even then encourages when it bypassed or ignores certain state regulations, at least for a while. The author mentions a Xinhua article typical for this official view, which portrays poor herders that became traders thanks to border trade with Kyrgyzstan {Karrar 2013@472}.

Karrer outlines the history of this interlocking between state efforts and private, often informal endeavours. It started already in the 1980s, years before the collapse of the Soviet Union. Trade tentatively resumed in 1983 as a confidence building measure between USSR and PRC. Commercial border trade between Kazakhstan and Xinjiang was allowed in 1986, the same year the Karakoram Highway opened. The big boost, however, came with the 3-day visa-free entry regime for Central Asian’s in 1993, which greatly increased shuttle trade in the early 1990s {Karrar 2013@466-467}. However, shuttle trade has since been largely replaced by wholesale and the visa-free regime was abolished again.

The author notes that post-cold war informal trade shares many similarities with erstwhile Eurasian trade and that its contemporary form is mapped onto old commercial structures. Is this the case because memories of former trade are still alive? Or, “do deserts, steppes, and mountains retain residual commercial structures that can be revived?” {Karrar 2013@478}. Karrar tends towards the second explanation:

The physical geography retains the residual commercial structures that are revived, more than people. The topography where inter-Asian trade crisscrossed, the deserts, steppes, and mountains, were seemingly inhospitable places where the frontiers of empires were knotted together. But this same topography allowed for the movement of people and goods, with the physical space generating economic specialization which we today remember as Silk Road trade. {Karrar 2013@479}

Karrar’s article brings some new detail to the debate – also because he is approaching Sino-Central Asian trade mainly from a Xinjiang perspective. The Chinese state is much more present in his text than Pakistan or Kyrgyzstan. However, according to my own observations, the presence and posturing of the state in China contrasts sharply with a certain absence of state authority on the other side of the border. This greatly complicates matters of “formal” and “informal” business practices. For example, very often goods are “formally” exported from China but “informally” imported into Central Asia. While the state has certainly not retreated in Xinjiang (on the contrary), it is clearly less present in Central Asian’s border regions than it was during Soviet Times. This imbalance of presence and posturing on one side and relative absence on the other, I would argue, is a structural hallmark of the contemporary trade between China and many of its neighbours.