US Xinjiang Imports Ban Takes Effect, Further Darkening Trade Relations

US LEGISLATION BANNING the import of products made in Xinjiang unless the importer can prove the product was not created with forced labour went into effect today.

The Uyghur Forced Labour Prevention Act was passed last December and presumes that goods from Xinjiang are made with forced labour. That flips on its head the burden of proof required under existing US bans on importing products made with forced labour.

The act has been roundly condemned by Beijing.

Given the near impossibility of US importers verifying their Xinjiang supply chains on the ground as independent auditors are being denied access, the law will become as good as a blanket ban. How it is implemented, particularly the rigour with which US authorities pursue the diffusion of Xinjiang products throughout supply chains in the rest of China and the region, will determine how dampening the blanket is on trade.

Xinjiang produces more than 90% of China’s cotton, which is used by the textile and apparel industries across the country. Thus the impact of the law will be widespread in those sectors.

According to the South China Morning Post, stocks of unsold cotton are piling up at Xinjiang mills as US importers get their supply chains into compliance. With the next harvest less than three months away, half the cotton harvested last autumn has yet to be sold.

Xinjiang is also a grower of tomatoes for export and a producer of solar-grade polysilicon and electronics components.

The act will further harm China-US relations, regardless of any cosmetic changes the Biden administration may make to Trump-era tariffs on Chinese imports of consumer goods, semi-manufactures and raw materials.

Xinjiang Gets A New Party Boss, And Subtle Shift In Emphasis On Stability

THE NEW PARTY secretary in Xinjing, Ma Xingrui, promises no change in the region’s ‘stability’ policy, implying the human-rights confrontations between China and the United States and the EU will continue.

However, his early remarks touched on the development of Xinjiang’s supply chains and the need to integrate the region into the Belt and Road Initiative, suggesting an attempt to develop export routes through Eurasia to the EU to drive a commercial wedge between Washington and Brussels.

On December 25, when his appointment was announced, Ma pledged to maintain his predecessor Chen Quanguo’s focus on stability and implement President Xi Jinping’s blueprint for Xinjiang.

Two days later, during his first appearance in Urumqi, Ma shifted tone, saying Xinjiang should become more integrated with the Belt and Road Initiative and called for the region’s supply chains to be modernised and the climate for international business made more welcoming, including through tax breaks. He also said that development and security in the region had to be balanced and that maintaining stability was a long-term general goal.

Ma, 62, (left), has a commercial and trade background. He was most recently governor of Guangdong province, a post he took up in 2017 after a couple of years as Party boss in Shenzhen. A similarly short spell as a vice-minister of industry and information technology had followed six years running China Aerospace Science and Technology Corp., the main contractor for China’s space program, from 2007 to 2013 (Ma is an aerospace engineer by profession).

He also has security experience. When governor of Guangdong, Ma was a member of the central coordinating group on Hong Kong and Macau affairs as Beijing brought Hong Kong more tightly under its control through the crackdown on dissent via the National Security Law. Providing he does not blot his copybook in Xinjiang, Ma looks set for a seat on the Politburo following next year’s Party Congress.

Chen, four years Ma’s senior and under US sanctions concerning the treatment of the Uighur minority in Xinjiang, is moving to a yet unnamed new position. In his outgoing comments, he praised Xi’s ‘helmsmanship’ — a phrase popping up a lot of late — for what, according to state media, he called ‘the general social stability, high-quality economic growth and a happy and peaceful life for the region’s residents’.

China has repeatedly denied human rights abuses against Uighurs, saying its policies in Xinjiang address extremism and poverty.

On December 25, the regional government ran through the standard arguments of Beijing’s position in response to the bill that US President Joe Biden signed into law that bans imports of goods from Xinjiang unless companies can prove no forced labour is involved. Intel and Walmart are the latest US multinationals ensnared in this aspect of the dispute.

Even with the lures that Ma may dangle, US multinationals will not find it any easier to bite while the current mood in Washington prevails.

China Provides Afghan Aid Modestly And Cautiously

CHINA’S OFFER OF 200 million yuan ($31 million) worth of aid to the new Taliban government in Afghanistan is modest and cautiously given. Much of it will take the form of grain and other food supplies and vaccines and medicines.

Foreign Minister Wang Yi announced the assistance during a meeting of counterparts from Afghanistan’s neighbours, Pakistan, Iran, Tajikistan, Uzbekistan and Turkmenistan, thus distancing China from unilateral action.

Beijing established contact with Taliban officials even before the final US pullout from Afghanistan to ensure stability in the new emirate and prevent any spillover of militant Islamic radicalism into its restive Uighur population in Xinjiang.

Beijing’s continuing belligerent rhetoric towards the United States, critical of its 20-year presence in Afghanistan, may encourage Taliban hopes that China will provide the investment to rebuild the economy of their re-established but war-torn emirate.

However, China’s priority will be to ensure Afghanistan does not become a staging post for terrorists headed eastwards, followed by protecting Chinese businesses already operating there.

That was its strategy with its aid to the previous Kabul government. Providing anything more to its Taliban successor will be regarded with great caution in Beijing until it is clear how the situation in Afghanistan is developing.

Wang’s suggestion at the neighbours’ meeting that the United States and its allies ‘are more obligated than any other country to provide economic, livelihood and humanitarian assistance to the Afghan people, and help Afghanistan maintain stability, prevent chaos and move toward sound development’ only confirms that cautious stance.

Update: Taliban spokesperson Suhail Shaheen has told the Global Times that there is no place in Afghanistan for the East Turkestan Islamic Movement (ETIM) or any other terrorist group ‘with a foreign agenda’, to train, recruit or fundraise, and that many ETIM members had left the country, begging the question of where they have gone.

Shaheen also added to the things Beijing would like to hear by saying said that the Taliban was keen for Afghanistan to participate in the Belt and Road Initiative.

China Will Move Cautiously But Purposefully In Afghanistan

BEIJING HAS PROBABLY been as taken aback as the rest of the world by the speed with which the Taliban has resumed control of Afghanistan — and created an American-sized power vacuum in the region.

China will, however, be in no hurry to rush in to fill it, even as its leaders take private delight in what they will regard as further evidence of the global decline of the United States.

In the near term, Beijing will happily profess its philosophy of non-interference in another country’s domestic affairs. At the same time, it will buy as much peace and stability from the Taliban as it can while keeping the Wakhan Corridor tightly bottled up.

The eastern end of the Wakhan Corridor, a remote mountain valley on the ‘roof of the world’, forms China’s short (less than 100 kilometres) horseshoe-shaped border with Afghanistan. An ancient trade route spilling into Xinjiang through the Wakhjir Pass, it has long been closed at the Chinese end for fear of the drugs, Uighur separatists or other extremists that might flow through it. Tajikistan and Pakistan, to the north and south, respectively, also provide a physical buffer between Afghanistan and China.

Beijing provided modest military and economic support for the now-collapsed Kabul government for the past several years — including training some of the police who melted away in the face of the Taliban advance. Yet, it will have no compunction about pivoting to deal with the Taliban.

It has probably already used its influence in Pakistan to build connections with the new regime. It can offer security and economic assistance in return for protecting Chinese commercial interests and assurances that the Taliban will not support Uyghur militant forces or allow them to use the country as a base or transit route.

As a secondary objective, it will also seek the use of the Taliban’s influence in assuaging its growing security concerns for Chinese citizens and interests along the China-Pakistan Economic Corridor.

The ‘March West‘ policy since the mid-2010s has led Beijing to be increasingly involved in West Asia and the Middle East, not only deepening its relationships with Iran and Pakistan but expanding engagement with other regional powers such as Saudia Arabia.

However, what should have been a serious complication for China’s regional relationships — its treatment of the Uighurs — has been notably buttoned down by Beijing. Few Middle Eastern leaders have spoken out publicly on this — a sign of the importance of the growing ties in other areas plus Beijing’s ability to use its economic clout to dampen international criticism of its domestic policies.

The March West is, however, a journey of influence and transactional relationships, not empire. Beijing knows full well that Afghanistan is a graveyard of empires.

The issue that Beijing will eventually have to face in Afghanistan is the one that has confronted other outside powers before it: it is difficult to maintain a neutral position in a part of the world where there are so many overlapping and longstanding rivalries and conflicts.

It will be even more challenging when the time comes, as it surely will, for Beijing to step up its diplomatic and security engagement beyond the purely mercantilist.

Human Rights Drives Deeper Wedge Between Beijing and Washington

BEIJING IS LIKELY to bat aside as false and hostile the latest annual human rights report issued by the US State Department on March 30 as readily as it did a statement of concern by the UN Working Group on Business and Human Rights the day before about allegations of the forced labour of Uighurs in Xinjiang.

The US State Department’s reaffirmation of its designation of China’s treatment of Uyghurs as ‘genocide’ will do nothing to reduce tensions in the China-US relationship. If anything, these have increased under the new Biden administration, not eased as expected.

Announcing the report, US Secretary of State Antony Blinken also signalled a broadening of the US human rights focus from the previous Trump administration’s narrow concern with individual freedom and religious rights.

Further US economic sanctions and visa restrictions against Chinese officials are likely with Washington looking to act in concert with its allies.

Commensurate retaliation can be expected from Beijing, along with more rhetoric about Western nations’ hypocrisy over their domestic civil rights issues and Trump-like denigrations of Western media for not reporting the party line at face value.

More trouble for Western businesses seems likely as Beijing experiments with expanding consumer boycotts‘ scope to apply leverage on the US and other Western governments through their multinational companies.

However, Blinken made clear that human rights were ‘front and centre’ of the Biden’s administration’s foreign policy, and Beijing will find that US business does not have Biden’s ear in the way that it did Donald Trump’s.

Retaliation against European companies will also do little to encourage European countries to ratify the EU and China’s investment agreement that Beijing rushed to conclusion ahead of Biden taking office and which it saw as a potential wedge issue it could drive between Brussels and Washington.

The Hard Edge To The Soft Power Of Chinese Patriotism

WESTERN COMPANIES ARE not the first multinationals to suffer the power of a ‘patriotic’ Chinese consumer boycott when they get caught in the crosshairs of a political dispute.

US and European apparel retailers such as Nike, Adidas, H&M, Tommy Hilfiger and Burberry are now getting the same treatment that South Korea’s confectionary-to-hotels conglomerate Lotte and Japanese carmaker Toyota were subjected to in the past.

They are being abandoned by Chinese consumers and celebrity endorsers, and ‘disappeared’ from social media marketing and retail outlets. Their own-brand stores may remain open, but they are empty of customers, who are turning to indigenous brands.

In this case, the core dilemma for Western firms is whether they should continue to use cotton from Xinjiang in their products and face Western consumers’ censure for condoning the use of forced labour and other human rights abuses against Uighurs. Or should they stop using it and face the loss of their lucrative Chinese markets through boycotts by Chinese consumers whose shopping patriotism is being whipped up by the government?

In January, the United States banned the import of cotton from Xinjiang, and the United Kingdom told domestic firms doing business in China that they would be fined if they cannot show their products are not linked to forced labour in the region. Then, earlier this month, those two countries were joined by Canada and the EU on sanctioning Chinese officials over Xinjiang.

China has retaliated with countersanctions and knows that turning the economic screws on Western companies is a potentially more powerful way to silence its critics, as evidenced by how it has bought the silence of Islamic governments over the treatment of the Muslim Uighur minority in Xinjiang.

Western technology companies could be the next to be drawn into this as Xinjiang is a significant high-tech manufacturing sector feeding into global supply chains.

Beijing is defiantly maintaining in the face of international condemnation that accusations of cotton picked by forced labour and other charges of human rights abuses in Xinjiang are false. It describes its repression in Xinjiang as a campaign against terrorism, separatism and religious extremism.

This Bystander can allow that authorities are sincere in their view. Many governments view the violent repression of terrorism, separatism and religious extremism as legitimate. Some take their expression within ethnic minorities as evidence of them as being inherent in ethnic identity, as Beijing does with Uighurs.

Its policy response now abandons any pretence of affirmative action and accommodation of ethnic sensitivities towards the Uighurs and instead actively and often forcibly promotes their assimilation into the culture and society of China’ majority ethnic group, Han Chinese.

This justification of its near-total elimination of the Uighurs’ traditional ethnic identity appears a disproportionate policy response from the perspective of liberal democratic values. However, Beijing has no ideological qualms about repression and is restrained in its use only by its assessment of what is feasible and effective in pursuing its goals. Hong Kong provides another case in point.

Similarly, it calculates that Western sanctions and criticism over Xinjiang are unlikely to approach a severity that would force it to change course. It is betting that many Western companies will self-censor and quitely press their governments not to censure Beijing over Xinjiang and only criticise Beijing when they judge they will pay a higher price in their home market for not doing so.

Pompeo Determines ‘Crimes Against Humanity’ and ‘Genocide’ in Xinjiang

ON THE TRUMP administration’s final full day, the US Department of State has designated China’s actions against the Muslim minority Uighurs in Xinjiang as crimes against humanity and genocide.

The United States is the first country to make this determination officially. Beijing’s response is likely to be fierce, and especially caustic towards outgoing US Secretary of State, Mike Pompeo, whose name is on the determination and is scarcely beloved in Beijing. (Update: it was, on both counts.)

Pompeo’s decision does not trigger sanctions but will carry moral weight with allies and potential legal implications for companies directly or indirectly conduction business with Xinjiang.

The US Congress passed legislation on December 27 calling for the State Department to determine within 90 days whether forced labour or other alleged crimes against the Uighurs and other Muslim minorities are crimes against humanity or genocide. By getting his department’s ruling out in less than one-third of that time, Pompeo has made sure that the incoming Biden administration will have an immediate point of conflict with Beijing to deal with from day one.

President-elect Joe Biden has used the term ‘genocide’ about Xinjiang, and human rights abuses are a more significant issue to Democrats than Republicans (save perhaps when it comes to China). Still, campaign-trail rhetoric carries a different weight to what is said once in office.

The United States has already banned cotton and tomato product imports made in Xinjiang. Calls for companies selling to Western markets to extricate themselves from Xinjiang-based supply chains are increasing. The Trump administration has also put several Chinese companies on its Entity List, and thus subject to export controls, due to their involvement in Xinjiang. It also imposed sanctions on senior Party leaders and state-run enterprises it accuses of being involved in repression in Xinjiang.

This Bystander suspects that the US Congress will follow-up with legislation imposing further penalties.

Beijing Measures Its Response To US Xinjiang Sanctions

BEIJING’S RESPONSE TO the Trump administration’s sanctions on four Chinese officials held to be responsible for human rights abuses against Uighurs in Xinjiang is about as proportionately reciprocal as it gets.

China says it will bar entry to two Senators, Marco Rubio and Ted Cruz, one Congressman, Chris Smith, and the US State Department’s religious freedom ambassador, Sam Brownback. The grounds are the quartet’s criticism of Beijing’s treatment of people of faith.

Rubio co-chairs the Congressional-Executive Commission on China, a US government agency that monitors human rights and rule of law issues in China, which is also sanctioned.

Foreign Ministry Spokesperson Hua Chunying was similarly restrained in responding to a question from the Global Times at her daily briefing today:

It must be stressed that Xinjiang affairs are purely China’s internal affairs. The US has no right and no cause to interfere in them. The Chinese government is absolutely determined in its resolve to safeguard its sovereignty, security and development interests, to combat violent terrorist, separatist and religious extremist forces, and to oppose any external interference in Xinjiang affairs and China’s internal affairs.

Her restraint slipped moments later, however, in response to a different question about a tweet by the US State Department alleging the use of Uighur slave labour in the making of some products:

I also have some Uighur friends who I know are very happy in Xinjiang, breathing freely and enjoying their life, living in a completely different way than African Americans like George Floyd. We sincerely hope that those American politicians will really care about the serious racial issues in their own country and make efforts to protect the human rights of their ethnic minorities.

Hua also left open the door for further sanctions “as the situation develops”. That could be around the TikTok video-sharing app that Trump’s trade advisor, Peter Navarro, has hinted may be banned in the United States, where it is hugely popular, because of its Chinese ownership.

Separately, the US State Department has expanded its travel advisory for China to warn US nationals that they are at heightened risk of arbitrary arrest and of detention and exit bans. An e-mailed version sent on July 11 to US nationals in China said, “Security personnel may detain and/or deport US citizens for sending private electronic messages critical of the PRC government.” Both the new internet law and Hong Kong’s national security law can be applied extra-territorially and to non-Chinese citizens.

None of which suggests much interest in Washington in repairing tattered ties, even if there is any substance to the suggestions that Beijing would like to prevent relations sinking even lower than they have.

Update: China has imposed sanctions on the US defence manufacturer Lockheed Martin in response to Washington’s approval for Taiwan to buy parts to refurbish its Lockheed Martin missiles.

Financial Sanctions Over Xinjiang Will Further Fray US-China Relations

THERE IS NO other way to read the United States’ decision to go ahead with imposing sanctions on a Politburo member as anything but a marked deterioration in relations between the two countries. However, it fits squarely with Washington’s increasingly harsh condemnations of Beijing’s actions in Xinjiang and Hong Kong.

Chen Quanguo, the Xinjiang provincial party secretary, whose position in the Politburo makes him the most senior Party leader to be so sanctioned by the United States, Zhu Hailun, party secretary of the Xinjiang Political and Legal Committee, and the current and former directors of the Xinjiang Public Security Bureau, Wang Mingshan and Huo Liujun, face a range of sanctions. The Trump administration charges them to be responsible for human rights violations against the predominantly Muslim ethnic Uighurs in Xinjiang.

It is now illegal in the United States to conduct financial transactions with the four. Their US-based assets are frozen, although it is unclear how extensive these are. All save for Huo may not enter the United States, a restriction that also applies to their families. US Secretary of State Mike Pompeo says other unnamed Party officials will also be banned from entering the United States. The Xinjiang Public Security Bureau as an institution is also sanctioned. The Xinjiang Production and Construction Corps may suffer the same fate.

The sanctions are being imposed under the 2016 Global Magnitsky Human Rights Accountability Act, which affords the administration broad authority to impose human-rights sanctions on foreign officials. The US president could have imposed the sanctions months ago but was reluctant to do so while they could complicate the completion and implementation of his Phase One trade deal, signed in January.

Beijing has repeatedly rejected international allegations of abuses of Uighurs in Xinjiang and held fast to the line that its policies there and in Hong Kong are internal matters in which the United States has no place to interfere. However, the timing of the sanctions’ announcement, coming in the wake of Foreign Minister Wang Yi calling for better bilateral ties, will be taken as a slap in the face — or perhaps a biting off of a hand holding an olive branch — that cannot be left unanswered.

Next week, the US president is expected to sign into law legislation that will give him sweeping sanction powers over officials accused of undermining Hong Kong’s ‘one country, two systems’ semi-autonomy and over banks and state entities that do business with them. Imposition of them will likely be driven by the US election timetable, but there will be some uncomfortable weeks for bankers in Hong Kong deciding where it will pay for their loyalties to lie.

Uighurs Through The Looking Glass

TO THIS BYSTANDER’S eye, US President Donald Trump’s signing into law of property-blocking and visa sanctions on Chinese officials deemed to have committed human rights abuses in Xinjiang looks more to do with domestic US politics than further fraying of the already tattered relations between Washington and Beijing.

The US Congress passed the Uyghur Human Rights Policy Act of 2020 with bipartisan support, a further example of the hardening attitude of Republican and Democratic lawmakers towards China, a change of direction in US politics in which the president has been in the vanguard. There is no political mileage for him in standing in the way of it.

The White House is also scrambling to limit any damage to the president from a forthcoming book written by the veteran US neo-con diplomat John Bolton, who was Trump’s national security advisor until the two men fell out. Bolton reportedly claims in the book that ‘Trump said that Xi [Jinping] should go ahead with building the camps, which he thought was exactly the right thing to do’.

This Bystander would hazard that, if any such discussion took place, Xi probably couched it in vague terms about interring Muslim terrorists, knowing that the US president, famously disinterested in policy detail, was unlikely to press him further on the topic.

China’s response to the new US law was very much along those lines. According to a statement from the Foreign Affairs Committee of the National People’s Congress:

Xinjiang-related issues are nothing about human rights, ethnicity or religion at all, but about combating violence, terrorism and extremism…The United States has maliciously attacked China’s counterterrorism and deradicalization efforts, attempting to destroy the favorable situation of stability and development in Xinjiang, according to the statement.

The law is unlikely to do anything to alter Beijing’s policies in Xinjiang, and the direct impact of any sanctions is likely to be negligible. Beijing has already ridden out international condemnation over the detentions of up to 1 million people, mostly ethnic Uighurs, in ‘re-education camps’.

Even in this current Alice Through The Looking Glass world of US-China relations, in which the US president condemns China for something he reportedly said it should do, Beijing will regard the law as part of what it sees as Washington’s broader push to weaken it. Thus its response to Trump’s signing will be bombastic, but proportionate and asymmetric.