In China, using your bank, cash or atm card, you can usually obtain local currencies at a bank machine in Beijing. This is usually the easiest and most accesible way to obtain local currency for the trip to Kashgar and pay expenses while you are there.
In Kashgar, both traveler's checks and credit cards are accepted at counter 1 of the Bank of China (weekdays 9:30am-1pm and 4-7pm) on the west side of the Peoples' Square. There is no ATM as of yet.
ATM locations are growing surely but steadily in the more sizeable cities. Credit cards are also gaining ground in China, with Visa, MasterCard, American Express (branches in Beijing, Shanghai, Guangzhou and Xiamen), JCB and Diners Club the most common. Cards can be used in most mid to top-range hotels, Friendship and department stores.
Foreign currency and travellers cheques can be changed at the main branches of the Bank of China,Friendship Stores and some department stores. Hotels usually charge the official rate and also most likely only accept local currency cash. You will need to keep your exchange receipts if you want to change any of your remaining RMB at the end of your trip. Travellers cheques are a fair option because they are safer and the exchange rate is more favourable than that for cash; Thomas Cook, American Express and Visa are most commonly accepted.