Beijing has come under fire for a network of detention centres which mostly house Muslim minorities.
But a new document says millions of workers have benefited from "education and vocational training".
The US has likened the centres to concentration camps.
It has placed sanctions on Chinese politicians allegedly involved and earlier this week blocked some exports it said had been made with "forced labour".
A new Chinese government white paper, however, says "vocational training" is increasing job opportunities and combating poverty.
"Xinjiang has built a large knowledge-based, skilled and innovative workforce that meets the requirements of the new era," the report reads.
It says the training provided includes written and spoken Mandarin, labour skills and "knowledge of urban life". The report says people from rural areas have started their own businesses or got jobs in factories after receiving state support.