In October 1954, the Central People's Government ordered most of the PLA units in Xinjiang to be transferred to local civilian work by the unit, and be separated from the setups of national defense forces to form a production and construction corps, whose missions were to carry out both production and militia duties, andcultivate and guard border areas. Starting from May 1956, the XPCC was subordinated to the dual leadership of the Ministry of State Farms and Land Reclamation and the Xinjiang Uygur Autonomous Region.

China has a centuries-old tradition of developing and protecting its border areas by stationing troops to cultivate and guard the frontier areas. According to historical records, all thedynasties in Chinese history adopted the practice of stationing troops to cultivate and guard frontier areas as an important statepolicy for developing border areas and consolidating frontier defense. The beginning of this practice by the central authoritieson a massive scale in Xinjiang can be traced back to the Western Han Dynasty, to be subsequently carried on from generation to generation. This policy had played an important historical role inuniting the nation, consolidating frontier defense and promoting social and economic development in Xinjiang. The decision of the Central People's Government of the People's Republic of China in 1954 to establish the Xinjiang Production and Construction Corps represented a continuation and development of this historical experience in the new historical conditions.

The XPCC grew in strength through arduous pioneering efforts. Since its founding, the XPCC has taken it upon itself to reclaim land, guard the border areas and work for the well-being of the people of all ethnic groups in Xinjiang. It has followed the line of combining the efforts of workers, farmers, merchants, students and soldiers; overall development of agriculture, forestry, animal husbandry, side line production and fisheries; and comprehensive operation of industry, communications, commerce, construction and services.