Category Archives: Trade

Plain Talk On Taiwan Overshadows Wooliness of IPEF

NOT FOR THE first time, US President Joe Biden has said that the United States would defend Taiwan militarily in the event of China using force to take control of the island. Nor is it the first time that his diplomats have had to walk back his comments, even before the inevitable condemnation from Beijing. 

At the same time, Biden, who was responding to a question during a press conference during his visit to Tokyo, said there had been no change in US policy towards Taiwan. The US One China policy holds that Washington maintains formal diplomatic relations only with Beijing and none with Taiwan and exercises’ strategic ambiguity’ over Beijing’s One China principle that Taiwan is an inalienable part of China to be reunified one day. Part of that ambiguity is not to say publicly that the United States would defend Taiwan militarily.

It has always been an illusionary fudge. The same year that Washington and Beijing established formal diplomatic ties (1979), setting the intractable Taiwan issue to one side, the US Congress passed the Taiwan Relations Act. The act guarantees US support for the island and specifies that the US must help Taiwan defend itself. It has been the basis on which the United States has continued arms sales to Taipei.

As regional leaders watch China build up its armed forces and demonstrate prowess in the skies around Taiwan and the waters of the East and South China Seas, concern about military action against Taiwan has increased. Pressure has been quietly mounting for the United States to be explicit about its military support for Taiwan in such an event. 

Recently, former Japanese Prime Minister Shinzo Abe said it was time for the United States to state clearly that it would defend Taiwan. Our man in Tokyo tells us that the incumbent, Fumio Kishida, has passed on the same view. 

Opinion in Washington splits between officials and politicians taking a more assertive posture towards Beijing and those who fear provoking Beijing into advancing its plans for reunification. Russia’s invasion of Ukraine has made the question of whether something similar could happen in Taiwan more prominent in Washington discussions.

Beijing’s view, repeated after Biden’s latest remarks, is that the Taiwan question and the Ukraine issue are fundamentally different. Foreign ministry spokesman Wang Wenbin said that to compare the two is absurd. 

Biden was speaking a truth hiding in plain sight as his administration seeks haltingly to mould a China policy that incorporates the direction set by his predecessor Donald Trump, but without the idiosyncratic rhetorical toxicity and disregard for diplomatic process. 

His comments on Taiwan overshadowed the announcement of his administration’s Indo-Pacific Economic Framework (IPEF). The IPEF aims to fill the vacuum of US economic engagement in the region left by Trump’s withdrawal from the US-initiated Trans-Pacific Partnership (TPP) in 2017 and cold-shouldering of its successor, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

At this point, the IPEF is little more than a bare framework and far from a conventional trade agreement that most of the 13 US allies that have signed up for it would prefer. The trade-agreement adverse Biden administration may cast it as a trade arrangement for the 21st century. However, it reflects domestic US political realities, including needing to satisfy Biden’s organised labour constituents and the groundswell of anti-China economic nationalism in Washington, as it does the promotion of regional economic integration.

Many of the South and Southeast Asian participant countries will be uneasy about the way the IPEF is being portrayed within the United States and among Washington’s closest regional security allies as a way of containing China’s growing economic sway over the region. China’s closest neighbours want deeper economic relationships with both powers.

The IPEF has four pillars:

  • fair and resilient trade, encompassing seven subtopics, including labour, environmental, and digital standards; 
  • supply chain resilience; 
  • infrastructure, clean energy, and decarbonisation; and 
  • tax and anti-bribery and anti-corruption.

Participants in the IPEF can pick and choose from that menu as they wish. Even though this should eliminate some of the horsetrading that so often stalls conventional trade deals, negotiating agreements for each IPEF pillar will neither be quick nor easy.

The target deadline is likely the Asia-Pacific Economic Cooperation (APEC) Leaders’ Meeting in November 2023, which the United States will be hosting.

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April’s Trade Figures Stiffen The Headwinds China’s Economy Faces

Longtan Container Terminal of Nanjing Port seen on May 6, 2022. Photo credit: Xinhua/Li Bo

THE TRADE REPORT for April brings further evidence of the headwinds facing the economy.

China’s General Administration of Customs reported today that goods exports grew by 3.9% year-on-year in April in dollar terms, the slowest pace since June 2020, while imports showed no growth year-on-year.

Since importers are paying significantly higher prices for commodities, this implies substantially lower import volumes than last year.

Lockdowns in big cities have severely disrupted global supply chains. At the same time, global demand for goods, especially electronics, is starting to weaken in the face of inflation squeezing consumers’ disposable incomes, and services recovering the share of spending lost to good goods during the pandemic.

The purchasing managers’ index for April showed that manufacturers’ employment intentions declined. That was also true in services, but it was the eighth drop in nine months for manufacturing. Premier Li Keqiang has promised to intensify efforts to stabilise the job market and expressed concern about the ‘grave’ outlook. The dotted line between unemployment and social instability always looks to top leadership to be short and threatening.

As Li indicates, monetary and fiscal policy is being selectively loosened, and there is likely more to come. Yet the latest trade figures add weight to arguments that the economy may grow little in the second quarter and might even contract.

The bind authorities find themselves in is that meeting the target of 5.5% GDP growth this year depends on the lockdowns easing substantially by the middle of the year. Under- and ineffective vaccination and the political dynamics of doubling down on the zero-Covid policy make that an impossibly tight deadline.

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China-Russia Trade Slows In March

THIS BYSTANDER ALWAYS cautions against drawing too-firm conclusions from one month’s economic data. Yet, preliminary March trade data released by China’s General Administration of Customs suggests that Chinese companies have been cautious about trading with Russia since the invasion of Ukraine.

In March, China’s exports to Russia at $3.8 billion fell 7.7% year-on-year, their lowest level since May 2020, when global trade was tanked by Covid-19.

At $7.8 billion, imports from Russia rose 26.4% year-on-year, but rising commodity prices would have inflated the value of the underlying volumes. Even then, the dollar figure was below the record $8.3 billion recorded last December.

China mainly buys energy and agricultural commodities from Russia and sells it machinery, vehicles and electronic equipment. Product category breakdowns are not available with the preliminary data. We shall have to wait until later in the month for that detail.

In February, at their meeting during the Beijing Winter Olympics, President Xi Jinping and his Russian counterpart Vladimir Putin agreed to boost annual bilateral trade to $250 billion. In 2021, it was worth $147 billion.

Xi has been put in something of a quandary by his friend’s war in Ukraine, although China’s self-interest was always going to determine its economic support, overt or otherwise.

This and concern about possible risks of Western sanctions may have made Chinese firms proceed warily following the invasion of Ukraine. However, other factors could have contributed to March’s bilateral trade slowdown, most notably the Omicron surge disrupting supply chains.

April’s data may bring more clarity.

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Omicron’s Challenge To China’s Zero-Covid Strategy Hits Global Shipping

SUPPLY CHAINS, ALREADY under heightened stress because of the Ukraine conflict, face a new challenge from the latest Covid-19 lockdowns. 

Congestion in the Yantian and Shekou container terminals at Shenzhen and the terminal in Hong Kong is at its worst in five months, leading to further delays in shipping to export markets. 

Approximately 174 container ships are anchored or loading in Shenzhen and Hong Kong, the most since October 21 last year in the aftermath of Typhoon Kompasu.

The same is shaping up in Shanghai. In the north, the lines of vessels waiting to get into Qingdao port in Shandong were double the length mid-month that they were at the end of February. 

The Omicron variant’s challenge to China’s zero-Covid strategy is making the congestion worse than that typically seen around Chinese ports after the Lunar New Year. The delays will have a ripple effect as shippers re-route cargo and loadings to other ports. Longer delays will also push up freight rates.

As well as affecting port operations, lockdowns have hit production, with factories being temporarily shuttered or allowed to operate under strict restrictions.

While Shenzhen has just eased its lockdown, Hong Kong is battling a fearsome outbreak of the Omicron variant. Shanghai, which handles more tonnage than either of the two southern shipping hubs, is still seeing a rise in infections. Although denied by authorities, rumours of a coming complete lockdown are circulating.

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US Reminds China It Is Still Taking Care Of Business

JUST BEFORE FORMER US President Donald Trump left office, he signed into law the Holding Foreign Companies Accountable Act (HFCAA), which allows the delisting of any foreign — for which read Chinese — company publicly traded in the United States that does not let US regulators inspect its finances to the same extent required of US companies.

US-listed Chinese companies must disclose their non-US operations’ audits, which Chinese regulations prohibit auditors from sharing.

The law also targets alleged Chinese government control of such companies and was part of Trump’s broader strategy to limit Chinese companies’ access to US capital and technology.

On March 8, HFCAA was used for the first time. The US Securities and Exchange Commission provisionally listed five Chinese companies that it said were not in compliance — biotech firms BeiGene and Zai Lab, Yum China, which runs KFC and Pizza Hut fast food outlets, ACM Research, a semiconductor process equipment manufacturer, and pharma firm HutchMed China.

As the accounting scandal involving Luckin Coffee in 2020 showed, there are legitimate investor reasons for HFCAA, and its wheels turn exceedingly slowly. Delisting will not necessarily follow. The firms have opportunities to come into compliance. Even if they do not, 2024 is the earliest delisting would occur.

So the timing may be coincidental, but this Bystander doubts it.

Concern about Russia using China to end-run Western sanctions over Ukraine is growing within the Biden administration. The SEC’s announcement follows warnings by US Commerce Secretary Gina Raimondo that the US could ‘essentially shut down’ any Chinese companies that defy US sanctions by continuing to supply chips and other advanced technology to Russia.

Semiconductor Manufacturing International Corp, a chipmaker Raimondo mentioned, could become a new Huawei.

Delisting the five companies named would not necessarily impact US efforts to isolate Russia technologically. and certainly not in time to disrupt wartime supply lines.

However, the threat adds to the signals to China and its companies to tread carefully when it comes to US sanctions (and Chinese firms will be careful not to put their exports to the US and EU at risk by overtly violating them), or exploiting the situation created by the war in Ukraine.

This week, Bloomberg reported that some of China’s state-owned energy and commodities giants, including China National Petroleum Corp, China Petrochemical Corp, Aluminum Corp of China and China Minmetals Corp, are considering the opportunities for investment in Russian counterparts such as Gazprom and Rusal.

As well as providing economic support to a strategic partner, any deals would bolster Beijing’s efforts to improve its energy and food security. China is already the leading market for Russia’s exports, taking 13.5% of the total. That will only grow as Western sanctions that China has no intention of honouring bite on Russia.

Trade deals announced shortly before the invasion of Ukraine when Russian President Vladimir Putin was in China for the Beijing Winter Olympics last month now seem even more like a prelude to the future.

That future will be about trade deals in which Russian commodities fulfil China’s needs for energy and food, and China meets Russia’s needs for technology and advanced manufactures containing it like aircraft.

Update: Reuters news agency reports that discussions between Washington and Beijing on resolving the audit issue are progressing ‘relatively smoothly‘, although it sounds as if there is still a fair way to go to bridge the gap between the two sides.

Footnote: Around 250 Chinese companies listed on US exchanges could fall foul of HFCAA, according to another little-known Trump-era agency, the US-China Economic and Security Review Commission, which advises on the US national security implications of China’s bilateral economic activities. A steady addition of small batches to the SEC’s provisional list would accelerate the relocation of listings from the United States to Hong Kong.

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CIPS Replacement Of SWIFT Will Not Be Swift

Screenshot of page from SWIFT website captured February 27, 2022

THE DECISION BY Western nations to sanction some Russian banks by excluding them from the SWIFT messaging system that underpins international bank payments will spur Beijing to accelerate the adoption of its alternative.

At its core, SWIFT is a secure messaging system, as its full name — Society for Worldwide Interbank Financial Telecommunication — implies. Thus there is no reason that its functionality cannot be replicated.

China and Russia have had rivals since 2015, the Cross-Border International Payments System (CIPS) and the System for Transfer of Financial Messages (SPFS), respectively.

However, SWIFT’s power comes from its near-universal usage by more than 11,000 financial institutions across 212 countries, conducting 42 million transactions a day on average worth some $5 trillion.

By comparison, CIPS is in its infancy. It embraces only 80 foreign banks, including some Russian ones, but most of its 1,200 participant banks are Chinese or their overseas subsidiaries.

CIPS is mainly used domestically and for transactions between Hong Kong and the mainland. There is some regional use (8% of total CIPS transactions in 2020), but take-up is marginal in Africa, Latin America, and Europe.

In 2020, CIPS handled 2.2 million payment transactions across the year, with a total value of $7 trillion. However, that represented an increase over the previous year of about one-fifth for transaction volumes and approaching one-third for values.

CIPS has been getting more policy attention since the introduction of Hong Kong’s National Security law, which heightened concern over financial sanctions from the West. This has slightly shifted the focus from CIPS’s original goal of supporting yuan internationalisation to creating a SWIFT alternative should one become necessary.

SPFS, too, is used mainly domestically, accounting for around one-fifth of domestic financial payments. However, only a handful of international banks have signed up.

Neither system is anywhere near challenging SWIFT, even though Iran, which was kicked off SWIFT, in 2019, has declared it may soon be able to circumvent Western sanctions by using a combination of the Chinese and Russian alternatives to get around its own sanctions problems.

Its optimism is based on talks between Presidents Xi Jinping and Vladimir Putin in December. According to the Russian side, the two leaders agreed to develop a joint financial messaging and clearing system that would recruit numerous international banks. That will not happen overnight.

It is not a question of building out the systems. It is getting financial institutions to use them. SWIFT has more bells and whistles than CIPS and SPFS and can be used for capital transactions. Yet they are both still clearing and settlement systems, not rocket science. They just have to be reliable, efficient and cheap.

Usage has an element of chicken and egg. As long as so few global transactions are conducted in yuan, a Chinese clearing system will not attract many foreign adopters. Yet, if the system is little used, there is scant incentive for trade to be denominated in yuan.

Further, the strong network effects SWIFT enjoys also mean high user stickiness and substantial switching costs. This Bystander has read estimates that of the banks on CIPS and SPFS, only 10% of their transactions go through one or other of the services.

SWIFT is not a dollar-based system per se or even a US entity. It can clear in 26 currencies, operates from Belgium under Belgian law, and is overseen by Belgium’s central bank.

Yet SWIFT’s geopolitical power accrues to the United States as it is one of the critical props of the dollar’s centrality as a global currency. The dollar and euro have swapped primacy back and forth as the most used currency for international payments.

Yet, at around 40% each, both overshadow the yuan’s share of barely 3%, making it difficult for China to circumnavigate the Western financial system. The dollar’s use is the root of its global influence.

China would like the yuan to break the dollar’s hegemony over international trade. It has been actively pursuing bilateral currency swaps, such as its rolling three-year arrangement with Russia so that more trade can be settled in yuan. However, even its Belt and Road contracts tend to be dollar-denominated, and the bulk of China’s international trade is conducted in currencies other than the yuan.

Once that changes, which will likely require more relaxation of capital controls, CIPS is in place to facilitate that trade. But the cart can’t pull the horse.

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China Will Help Russia Economically But On Its Own Terms

Wheat infected by dwarf bunt virus. Photo credit: Peggy Greb, USDA Agricultural Research Service, licenced under Creative Commons Attribution 3.0 License.

THE TIMING OF the announcement by China’s customs authorities that they would approve all Russian wheat and barley imports — just hours after Russia launched its invasion of Ukraine — seems barely coincidental.

It also underlines how China is acting in its national interest as much as supporting its neighbour.

Presidents Xi Jinping and Vladimir Putin agreed to the end of the import ban when the latter attended the Beijing Winter Olympic Games earlier this month.

State media is suggesting that shows there is no connection between lifting the import ban and the invasion of Ukraine. However, that line raises more questions than it answers about how much Xi and Putin discussed Russia’s plans in advance.

Russia is the world’s largest wheat exporter, with around an 18% global market share. It has been excluded from the Chinese market because of concerns about introducing dwarf bunt fungus (seen in the photograph above) — a disease that can stunt wheat and other crops, reducing yields by up to three-quarters.

China often cites phytosanitary reasons to justify non-tariff barriers to trade, but the fungus is a serious threat; hitherto, China had zero tolerance for dwarf bunt spores in imported grain. Putin agreed that Russia would suspend wheat shipments to China if the contaminants were found.

For Russia, the agreement offered the reassurance of a secure buyer to mitigate possible Western sanctions. For China, it will mean a supply of cheap wheat to offset the looming shortages caused by flooding that disrupted last year’s sowing season across one-third of the country’s wheat acreage. Food security is a priority concern for Xi.

With 1.4 billion mouths to feed and rising use of wheat for animal feed, China is already the world’s largest wheat market, accounting for shy of one-fifth of the world’s consumption. It has somewhat opaque import quotas established when it first joined the World Trade Organization in 2001 that were intended to open up the market. Imports are running at well below allowable volumes. There is headroom to expand imports from Russia.

Some reports suggest that this new trade will be settled in yuan, not the dollars customary in commodities trading. That will be easier as some of the imported wheat will come from Chinese-owned farms in Russia’s Far East that up until now could only sell their produce in the domestic Russian market.

The two countries’ central banks agreed a three-year $24 billion currency swap in 2014 to facilitate trade financing in yuan. This has been renewed twice since. One effect has been to reduce the dollar’s share of financing of Russia’s exports to China from almost all of it in 2013 to around 40%.

In January, Russia’s state-owned Gazprom signed a 30-year contract to supply natural gas to China’s northeast from the Russian Far East. This will be priced in euros to avoid using dollars. Beijing insisted on favourable terms given Moscow’s desire to diversify its export markets for its energy since the sanctions imposed for Russia’s annexation of Crimea in 2014, which also produced a cut-price supply contract.

Russia has been building up its reserves of euros and yuan at the expense of the dollar since the imposition of the sanctions for annexing Crimea. Since 2017, the yuan’s share of Russia’s foreign-currency reserves has risen to 13% from 3% and the euro’s share to 32% from 22%, while the dollar’s share has fallen to 16% in 2021 from 46% in 2017.

The two countries’ central banks agreed a three-year $24 billion currency swap in 2014 to facilitate trade financing in yuan. This has been renewed twice since. One effect has been to reduce the dollar’s share of financing of Russia’s exports to China to around 40%, against almost all of it in 2013.

When they met earlier this month, Xi and Putin said they aimed to raise their countries’ bilateral trade to $250 billion from $140 billion last year. China will dictate the terms with a hard head more than a friendly heart.

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Walmart Put On Notice In China

THERE IS NO ambiguity in the message the Central Commission for Discipline Inspection, the Party’s anti-graft watchdog, has sent to US retailer Walmart: put products from Xinjiang back into its Sam’sSam’s Club stores in China or face a consumer boycott.

The need for foreign multinationals to choose which of their major markets to prioritise — China or the United States — is being ratcheted up another notch by Beijing.

In late December, Chinese social media lit up over allegations that Walmart had stopped selling items from Xinjiang at its members-only Sam’s Clubs, which, unlike their US incarnation, are upmarket hypermarkets in China. Netizens claimed they could no longer buy Xinjiang-sourced items such as apples and dates on the Sam’sSam’s Club app that were previously available, and that the groceries had been de-stocked by Walmart. Typical Xinjiang produce such as cantaloupes and apricots were available, but they were not from Xinjiang.

The flare-up emerged two days after US President Joe Biden signed into law a bill banning companies from selling goods from Xinjiang or containing Xinjiang-made components unless they can prove forced labour was not involved.

The Central Commission for Discipline Inspection’s statement pulls no punches in dismissing suggestions that this was the result of inventory management:

Removing all products from a region without a valid reason hides an ulterior motive behind it, exposes stupidity and short-sightedness, and is bound to suffer its own evil consequences…Suppressing and boycotting Xinjiang products is another “card” played by Western anti-China forces, which is doomed to failure… From H&M Group’s boycott of Xinjiang cotton, to Intel’s letter to suppliers demanding that Xinjiang labour and products be banned, to the removal of all Xinjiang products from Sam’s Club, these Western companies that once flaunted no political interference have punched themselves in the face with their own actions.

The anti-graft watchdog also noted the expected patriotism of consumers in such circumstances:

Chinese consumers expressed strong dissatisfaction and resisted with the action of returning cards, expressing their position of resolutely safeguarding national interests.

If the remedy required of Walmart — to back down — is not forthcoming, then, the Commission says, Chinese consumers will ‘respond resolutely with practical actions’.

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RCEP Arrives

THE CHINA-STEERED Regional Comprehensive Economic Partnership (RCEP) will come into effect on January 1, bringing together China, Japan, South Korea, Australia, New Zealand and the ten ASEAN nations in the world’s largest free trading agreement (FTA).

The 15 nations account for more than half the world’s exports and almost one-third of its GDP and its population. More significantly, they will likely account for most of the world’s economic growth in the coming decades.

RCEP was signed on November 15, 2020, having been hurried forward by Beijing. Ratification by the required nine signatory nations was achieved on November 2, and the agreement will come into effect in the minimum stipulated 60 days. Indonesia, the Philippines, Malaysia and Myanmar are the only four nations left to ratify it.

About 90% of goods will be traded tariff-free within RCEP, although that is largely the case already as ASEAN has FTAs with Australia, Japan, New Zealand and South Korea. The bigger benefit will likely come from dismantling non-tariff barriers.

This will bolster China, Japan and South Korea by strengthening their supply chains in the region. Regional supply chains are likely to become more China-centric, and, as the largest economy, China will be well-positioned to dictate terms and technical standards.

RCEP’s less industrially advanced nations such as Cambodia and Laos will benefit less substantially and have been given extensive phase-in periods to ease the transition. (Long transitions, exceptions, exclusions and non-enforceability of many of its 20 chapters are quite a feature of RCEP.)

The raw materials, machinery, motor vehicles and consumer products sectors are likely to benefit most, but trade in agricultural products, always contentious, is not covered under RCEP. RCEP also ducks other controversial issues such as subsidies for state-owned enterprises and labour rights.

Trade in services will be liberalised along two tracks. One group of countries — China, Myanmar, Thailand, Cambodia, Laos, Vietnam, the Philippines and New Zealand — will open selective service sectors on a ‘positive list’ basis. The others will open all service sectors unless expressly excluded.

RCEP’s membership has considerable overlap with that of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The latter addresses indirect barriers such as state-owned enterprises, subsidies, labour rights, environmental protections and climate change.

It also provides stronger intellectual property rights protections than RCEP. This may steer investment to RCEP members who are also part of CPTPP.

RCEP should help drive economic recovery in Southeast Asia in the short term as the region battles through the latest surge of Covid-19.

In the medium term, it should increase trade and investment within the region. Estimates vary widely, but there is agreement that it will be material and in part at the expense of other parts of the world.

This will accelerate the emergence of a China-centric regional economic sphere that has been occurring for some years and is distinct from markets in the West and the supply chains that feed them.

The shift of the world’s centre of economic gravity to the region would be slowed if the United States and the EU were to join one of the two groupings. Prospects for either are dim, with an increased number of bilateral trade agreements more likely, especially with security partners.

In the longer term, as RCEP’s member countries develop, they will have to address the structural, protectionist issues that the agreement has parked to the side. That will bring political tensions.

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Walmart Gets Ensnared In US-China Dispute Over Xinjiang

NOW IT IS Walmart. Chinese social media has lit up over allegations that Walmart has stopped selling items from Xinjiang at its members-only Sam’s Clubs in China.

Netizens claimed they could no longer buy Xinjiang-sourced items such as apples and dates on the Sam’s Club app that were previously available, and that the groceries had been de-stocked by Walmart. The nationalistic state media, Global Times, said it had found typical Xinjiang produce such as dates, cantaloupes and apricots available, but they were not from Xinjiang.

There has not yet been a formal response from Walmart.

The flare-up comes a day after US President Joe Biden signed into law the bill Congress passed last week, banning all imports of Xinjiang products into the United States without pre-authorised clearance following proof that forced labour was not involved.

The law has already escalated tensions between Washington and Beijing, which denies all allegations of human rights abuses in the province, and is increasingly dragging multinationals into the fray.

Walmart is only the latest Western company to face the Sisyphean task of balancing reliance on Chinese suppliers and markets with the need to comply with US sanctions and maintain its reputation in Western markets.

US semiconductor maker Intel ran into a storm earlier this week after it apologised to China for reminding its suppliers that they had to comply with the US sanctions over Xinjiang. Its apology, posted on its Chinese social media accounts, that its commitment to avoid supply chains from Xinjiang was an expression of compliance with US law, rather than a statement of its position on the issue, was criticised for being insincere at best and duplicitous at worst in both China and the United States.

The stakes are higher for Walmart because it is an easier target for a direct Chinese consumer boycott than Intel, whose products go into other manufacturers’ products.

Sam’s Club is positioned as a premium grocery in China, unlike in the United States, where it is a bulk discount club. It has been a rare success story for Walmart in China. The US retailer is struggling online and offline against domestic rivals in the highly competitive retailing sector.

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