BEIJING, (Reuters) — China has set up a 20 billion yuan ($3.2 billion) fund to boost the textile industry in its western Xinjiang region, state media said on Friday, in an effort to enhance stability where unemployment is seen as fueling ethnic tension.

Xinjiang, home to the Muslim Uighur people, has been beset by violence for years, blamed by the government on Islamist militants and separatists who want to establish an independent state called East Turkestan.

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