US ban on imports from Xinjiang province disrupts China's supply chain

The United States is rallying its allies against forced labour as it begins implementing an import ban on goods from China's Xinjiang region, where it says Beijing is committing genocide of the Uyghur population.

US Customs and Border Protection (CPB) on 21 June began enforcing the Uighur Forced Labour Prevention Act, which US President Joe Biden signed into law in December.

As per new rules all goods from Xinjiang, where Chinese authorities established detention camps for Uighurs and other Muslim groups, are made with forced labour and barred from import unless it can be proven otherwise.

"We are rallying our allies and partners to make global supply chains free from the use of forced labour, to speak out against atrocities in Xinjiang, and to join us in calling on the government of the PRC to end atrocities and human rights abuses immediately," US State Secretary Antony Blinken said in a statement, referring to China by its formal name, the People's Republic of China.

"Together with our interagency partners, we will continue to engage companies to remind them of US legal obligations," he said.

Xinjiang has a booming industrial, mining, and agricultural sector. Everything from peppers and walnuts to electrical equipment and polysilicon, a key material for making solar panels, ships to the US from the region. It also accounts for 20 per cent of the world's cotton and 80 per cent of China's domestic production.

Britain's Sheffield Hallam University released a report in mid-June documenting the use of forced labour in Xinjiang to manufacture polyvinyl chloride, a core component in floor tiling.

Academics and media organisations have published reports detailing the systematic use of forced labour among Uighurs in what critics describe as internment camps. China, which initially denied the existence of such facilities, later said they were vocational training centres are designed to combat the rise of religious and separatist extremism in the region.

A sweeping crackdown in Xinjiang over the past few years has repressed cultural and religious practices and prompted allegations of forced sterilisation and arbitrary imprisonment conditions that some western governments say amount to genocide.

Rights groups have urged for years that companies and brands linked to shirts, trousers and other Xinjiang-made goods be held accountable for labour conditions in the region.

However, China denies the claims of forced labour as "big lie concocted by anti-China forces" and has warned of retaliatory measures. However, the ban intensifies pressure on Beijing as the Foreign Ministry Spokesman Wang Wenbin said earlier in Beijing that "with this so-called law, the United States is trying to create forced unemployment in Xinjiang and to push for the world to decouple with China".

While Chinese companies and retailers are bracing for chaos as US Customs begins to enforce a ban on imports Xinjiang region. These companies are scrambling to gauge how the new rules could affect their business and supply chains, with Asian clothing suppliers, international retail chains, US solar-panel makers and Chinese floor tile material makers among scores of groups that could see US-bound shipments seized.

The Uighur Forced Labor Prevention Act entails that all US-bound imports traced to Xinjiang, from cotton and tomatoes to floor tile and solar panel materials, were made using forced labour and brands them as "high priority" for seizure.

More than 900 shipments from the region were seized in the last quarter of 2021 by US authorities under earlier trade restrictions. But trade and business groups said the new legislation's vague wording threatened to put the bulk of China's USD 500billion in annual shipments bound for the US at risk.

US customs said it would strictly enforce the rules, which threaten to aggravate already tense relations between Washington and Beijing. "If the act is implemented, it will severely disrupt normal co-operation between China and the US, and global industrial and production chains," said Zhao Lijian, Chinese Ministry of Foreign Affairs spokesperson, the week before the ban. "If the US insists on doing this, China will take robust measures to uphold its own rights and interests as well as its dignity."

There are reports of detainees being moved out of Xinjiang to work in other parts of the country, while components produced in the region have been traced to US-bound exports shipped from elsewhere in China. The law could heap more pressure on pandemic-hit China's supply chains.