URUMQI, China, May 7 (Reuters) - Hundreds of migrant workers from distant corners of China pour daily into the Urumqi South railway station, their first waypoint on a journey carrying them to lucrative work in other parts of the far western Xinjiang region.

Like the columns of police toting rifles and metal riot spears that weave between migrants resting on their luggage, the workers are a fixture at the station, which last week was targeted by a bomb and knife attack the government has blamed on religious extremists.

"We come this far because the wages are good," Shi Hongjiang, 26, from the southwestern metropolis of Chongqing, told Reuters outside the station. "Also, the Uighur population is small. There aren't enough of them to do the work."

Shi's is a common refrain from migrant workers, whose experience finding low-skilled work is very different to that of the Muslim Uighur minority.

Employment discrimination, experts say, along with a demographic shift that many Uighurs feel is diluting their culture, is fuelling resentment that spills over into violent attacks directed at Han Chinese, China's majority ethnic group.

The apparent suicide attack on the station, which killed one bystander, was the latest violence to hit Xinjiang, despite a pledge from China's President Xi Jinping to rain "crushing blows against violent terrorist forces".

Many of the nearly 80 people wounded in the incident were likely to have been brought to Xinjiang, where Uighurs once formed the majority, by Han-controlled businesses to be construction workers or cotton-pickers.

That made the Xinjiang capital's southern station a "powerful symbol", said Nicholas Bequelin, a senior researcher at New York-based Human Rights Watch. "In any colonial setting you have people amongst the colonised who are ready to use violence against the coloniser," he said.

RESOURCE POWERHOUSE

Resource-rich and strategically located on the borders of central Asia, Xinjiang is key to China's growing energy needs.

Estimates put Xinjiang's coal reserves at about 38 percent of the national total, while it already produces 13 of China's crude oil output and 30 percent of the country's natural gas.

But despite the vast mineral wealth and billions of dollars of investment, analysts say much of the proceeds have flowed to Han Chinese, stoking resentment amongst many Uighurs.

Han Chinese make up about 88 percent of the settlement controlled by the Xinjiang Production and Construction Corps, a state-run, semi-military organisation that dominates cotton production and is involved in a raft of other industries in the region ranging from tomato growing to mining and construction.

In oil and gas investment, led by China National Petroleum Corp, many job opportunities also remain closed to Uighurs.

"Over the decades of oil development in Xinjiang, many workers have been brought in from all over China," said Barry Sautman, a professor at the Hong Kong University of Science and Technology. "The number of Uighurs who have enough engineering skills is very restricted, so the majority of positions are still being filled by the Han Chinese."

"LOTS OF OUTSIDERS"

Ali, a Uighur father-of-three who runs a stall selling trinkets close to the train station, said sentiment towards the incoming workers ranges from resignation to bitter resentment.

"There are a lot of outsiders here," said the 37-year-old, who did not want to give his full name to a foreign reporter. "They are here to work, but there are few jobs for the locals."

The region has for years been beset by violence blamed by the Chinese government on Islamist militants and Uighur separatists who they say want to establish an independent state called East Turkestan.

More than 100 people have been killed in unrest in the past year, prompting a security crackdown in the region.

On Tuesday, a knife-wielding assailant wounded six people at a railway station in the southern city of Guangzhou. Police gave no reason for the attack, but for many it had echoes of the March stabbing to death of 29 people at another station in Kunming, in the southwest, which was blamed by the government on militants from Xinjiang.

A Xinjiang-based academic who declined to be named for fear of putting ongoing research at risk, said navigating ethnic tensions is more palatable to authorities than dealing with anger directed at the government's westward expansion policy.

"China would like this to be an issue of separatism," the scholar said. "You can roll a tank in to solve a separatist issue. How do you ask the Chinese government to solve this kind of policy grievance without fundamentally reforming itself? It can't happen."

That policy of encouraging economic development in the far west explains the allure of the region to migrant workers.

Xinjiang enjoys the fourth highest minimum wage among the country's provinces, regions and municipalities at 1,520 yuan ($240) per month, on a par with eastern industrial hubs such as Shandong and Guangdong provinces, and well above Beijing.

Many of the migrants work in construction. Others head south to Aksu, an agricultural hub between the country's western border with Kyrgyzstan and the Taklamakan Desert on the east. Aksu was the home of one of the two bombers killed in the Urumqi blast, according to police.

"UIGHURS DON'T COME HERE"

The vision of China's urban planners is on display in Toutunhe, a northern district of Urumqi, where high-rise apartments, massive government buildings and office parks are rising above the rugged Xinjiang landscape.

Plans for the development zone include software centres and wind power factories. On a recent trip to the area by Reuters, there were few signs of Uighur workers.

"Actually, the Uighurs don't come up here. I don't know why, they just don't," said Zhao Fuping, a 20-year-old construction worker.

Zhao, who graduated from middle school in Gansu province, earns a seasonal wage as high as 200 yuan a day. "It's very simple. The wages are better here," he said.

Others in the area, from migrant workers to a college educated grocery store owner, had similar views of Urumqi's ethnic boundaries.

"This place is not for Uighurs. We don't like it. We just come to deliver products," said a lone Uighur man, hurrying to board a bus to Erdaoqiao, the heart of the city's remaining predominantly Uighur neighbourhood.

"MUST SPEAK MANDARIN, NO HALAL FOOD"

China vehemently denies that Uighurs are unfairly marginalised, and says it is addressing underdevelopment and lack of jobs in heavily Uighur areas such as southern Xinjiang.

In February, the government said it would pump an extra 61.66 billion yuan ($10.17 billion) into the region this year to improve housing and employment.

The latest plan is to add 800,000 textile industry jobs in a region that grows more than half of the country's cotton.

But that may do little to address Uighur resentment if many of the jobs are filled by imported Han labour.

Overt discrimination in job advertisements has become rarer in recent years, but activists say it persists.

Where some ads might once have openly discouraged Uighurs from applying, now it is not uncommon for them to make more subtle demands for native Chinese language skills, or to remind applicants that onsite lunch options do not include halal fare.

One Uighur from Urumqi, who asked not to be identified, said he had been rejected for a marketing position by an electronics company that cited the extra administrative burden of hiring Uighurs, which he said included special registration procedures and filing monthly reports to the public security bureau.

"They said if they wanted to hire me they would have a lot of extra work and they were worried about the hassle," the 24-year-old man with fluent Chinese told Reuters. "It's not like this thing has only happened once or twice. It's happened to me before and my girlfriend has had this problem before."

At a recent auto show at Urumqi's new exhibition centre, few Uighurs came to inspect the new Audis, Volkswagens, Fords and Nissans. Visitors had to pass through two rounds of bag searches and metal detectors while armed police patrolled the grounds.

An Long, a Han university student working part-time as a car salesman, was frank about the gap between Han and Uighur.

"Why are there so few Uighurs here?" he said. "Because they can't afford to buy the cars." ($1 = 6.2455 Chinese Yuan)