Chinese tourist Lanzhen Tang is unimpressed. “I like it but it’s a bit small. There aren’t many people,” she says before posing for photographs beside a stretch limousine.

Traders say visitor numbers collapsed a couple of months ago after the Chinese tightened import controls and restricted the movement of people between the two sides. This was ostensibly done to crack down on corruption, but ethnic discrimination and political tension may be a bigger factor.

On the walls of every shopping mall on the Chinese side are posters forbidding entry to any man with a long beard or any woman with a hijab. Visitors must pass through a metal detector and have their bag checked by security guards. On the streets outside, there are CCTV cameras and the police presence is striking. This is due to tensions in the Xinjiang Autonomous Region. Several cities there have witnessed ethnic riots, terrorist attacks and fierce repression by state security forces, who have blocked all public displays of Islamic faith.

This threatens to undermine Khorgos. Most traders are Muslim and unhappy at restrictions on their co-religionists. As businessmen, they are also troubled by the frequent regulatory changes.

It is clear China is calling the shots, but its heavy-handedness has not halted corruption. Businessmen in the neutral zone say they can bribe customs officials to ensure their goods get through, that illegal casinos and brothels operate inside the shells of half-completed buildings, and that there have been secret bare-knuckle boxing tournaments, where spectators could gamble on two teams formed of 10 Chinese and 10 Kazakh fighters.

But Khorgos is more than a bizarre bazaar. The entire region around it is being transformed. Construction will soon begin on an airport. Work is already under way on an industrial centre, which will offer a rent holiday and zero taxation until 2035. Eventually the region’s planners hope to attract IT and robotics companies. By 2025, they aim to create 25,000 jobs.

Zhasulan Khamzin cheerfully admits he had never heard of Khorgos before moving here five years ago to manage the world’s biggest dry port and the installation of three 41-tonne gantries to move containers across flatbed trains on the different gauge tracks on the two sides of the border. “We are developing an area where there was nothing before,” he says. “We are pioneers.”

The first train passed through in July 2015. A year later, the facility handled 45,000 containers. This year, it is set to exceed 150,000. Meanwhile, a new dormitory town – Nurkent – has been built from scratch and is home to 4,000 families. Khamzin predicts this too will become a city.

“Nurkent is still just a baby, but it will grow. This will be one of the biggest cities in Kazakhstan. By 2035, we expect 100,000 people will live here,” he says.

The climate is not exactly welcoming. In winter, residents put up with thick snow and temperatures as low as -36C (-32F). In summer, they bake in 40C (104F) heat. But relatively high salaries, no tax and free accommodation are bringing people in.

“I didn’t want to come but I had no choice, because my previous company went out of business,” says crane operator Osipova Galina, as she sits down after a 12-hour shift. “My first impression wasn’t good. Just very ugly shopping malls surrounded by a barbed wire fence.”

But she has warmed to this place on the corridor into central Asia. “The people here are very committed. They are invested in this,” she says.