Xinjiang's Qiemo county government announced an annual cash reward of 10,000 yuan (USD 1,627) for five years for mixed marriage couples besides welfare benefits but skeptics argued that it may not work.
"We are no longer publicising the policy, but we will still go ahead with it," an official from the county's government office told state-run Global Times.
The policy offers family members of mixed marriage couples privileged access to housing, education, employment and welfare benefits.
Their children will also be exempted from school fees within the county until high school, while an annual 5,000 yuan scholarship will be given to those who reach university. Their parents will also be eligible for housing and medical benefits if their marriage lasts longer than three years.
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The scheme was announced as Xinjiang witnessed a spate of attacks, which China blames on the East Turkestan Islamic Movement, an al-Qaeda backed outfit fighting for independence of the province.
"The intention of the policy is good, but it has to be carefully implemented," said Li Xiaoxia, a professor with the Xinjiang Academy of Social Sciences.
Li said such mixed marriages are rare in Xinjiang and are not likely to spread.
The new move, mirroring similar cash incentives offered in Tibet, is believed by some to be a measure to ease social conflicts amid increasing incidence of terrorist attacks in the region.
However, analysts believe the policy will remain limited to the single county and is unlikely to spread across Xinjiang.
"I put a call into a Xinjiang official immediately after I heard the news, and he said he disapproves of the policy," said Pan Zhiping, a research fellow with the Xinjiang Academy of Social Sciences.