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KASHGAR, Xinjiang, July 28 -- In the eyes of Thomas J. Sargent, 2011 Nobel laureate in economics, Kashgar as a post along the Silk Road Economic Belt is no less important now than in ancient times.

Sargent has visited many countries along the Silk Road, but it was his first time in northwest China's Xinjiang Uygur Autonomous Region over the weekend, as he attended a two-day international forum on the Silk Road Economic Belt. The forum focused on the development of central Asia.

There has been an increase in the number of terrorist attacks in the region this year and this has naturally led to concern among locals, businessmen and tourists.

"I did some checks on Kashgar before coming here, and I think the city is fine," Sargent told Xinhua. "I feel that there are many other places in the world that are more dangerous than here."

He said distance, language, law and terrorism are all trade barriers, with the last one potentially being a big issue on the Silk Road.

As one of the founders of the rational expectations model, Sargent said when people make decisions, one has to have a view of the world and predict what is going to happen.

"Las Vegas is located in the middle of desert, I would never have expected anyone would want to live there," Sargent said, mentioning the Westward Movement in the United States. "You want to move people, you pay more."

Kashgar borders a desert and faces similar challenges.

According to Sargent, to meet the challenges, the central government set up a special economic zone in Kashgar, along with 10 categories of favorable policies ranging from tax exemptions, subsidized electricity and transportation, low-interest loans for infrastructure to the development of better rail and air links with neighboring countries.

Sargent believes Kashgar and New York have a lot in common in terms of ethnic composition. "We call New York a 'melting pot' because almost everyone there is a minority, which forces tolerance, both religious and ethnic."

He continued, "And it has to apply to Muslims because there are lots of diversities in the world. When people trade with each other, go to school with each other, they will like each other. That cuts down barriers."

He added the Silk Road Economic Belt is a great phrase. "Whoever made or said it is very smart," Sargent said. "I'm optimistic about the future of Kashgar."