US ‘ evil bill’ against Xinjiang wreaks havoc on global supply chains
The US’ so- called Uyghur Forced Labor Prevention Act ( UFLPA), which has been widely described as an “evil bill,” may be aimed at cracking down on products and industries in Northwest China’s Xinjiang Uygur Autonomous Region as part of a broader campaign to contain China, but its implications are global and severe, because Xinjiang is deeply embedded in the global supply chain in many areas, according to a Global Times investigation into the act’s impact on global supply chains.
In interviews with the Global Times, businesses and industry insiders in many countries, including China, Bangladesh, Vietnam and Norway, described the US legislation as wreaking havoc on global supply chains for everything from cotton to mechanical items to solar panels. Essentially, the US bill will create more disruptions to already seriously disrupted global supply and industrial chains, and could even threaten the global green push to tackle climate change, according to the interviews.
While the bill is drafted in a way that seemingly only targets certain Xinjiang products made with so- called “forced labor,” businesses around the world will be essentially forced to prove themselves “not guilty” before being able to export their products. This would cost companies billions of dollars, even if they could prove it, which is nearly impossible, according to businesses and industry insiders.
Such dire consequences have been largely overlooked or intentionally ignored by the US government and many Western media outlets as they relentlessly push forward the
anti- China narrative and crackdown campaign, according to analysts. Moreover, the bill is also hurting certain US businesses and industries, as China’s imports of US products such as agricultural machinery and other equipment have been falling sharply, according to data compiled by the Global Times and industry insiders in Xinjiang.
Damage to supply chains
Xinjiang products are sold in more than 170 countries and regions and there are no cost- effective alternatives to some of the products such as cotton and raw materials for solar equipment, businesses and industry insiders said.
Currently, countries and global companies are grappling with a multibillion- dollar dilemma over the tremendous efforts required to prove that their products are not made with so- called “forced labor” and reorganizing industrial and supply chains featuring many intermediate links and large transaction amounts.
“We are anxious about our supply chain as it is heavily inclined toward China and many of our members are large garment and textile manufacturers. The [ US ban] has put them under huge pressure,” AI Manun Mridha, joint secretary- general of the Bangladesh- China Chamber of Commerce and Industry, told the Global Times.
As the second- largest garment producer in the world, Bangladesh imports 60- 70 percent of its yarn and fabric from China, Mridha said, noting that it is very hard to differentiate which yarn or fabric was or was not manufactured using Xinjiang cotton.
China is the world’s largest exporter of both textiles and clothing, representing 43.5 percent and 31.6 percent of the global total in 2020. Apart from exporting finished goods, the country also sells intermediate products to third countries, which then export finished products to developed countries, including the US and the EU. For example, Vietnam sources over 50 percent of its cotton yarn from China and more than 60 percent of its cotton cloth, Xu Yaguang, an analyst with Huatai Futures, noted in a research report published on the company’s WeChat account.
Do Pham Ngoc Tu, vice chairman of the Vietnam Cotton & Spinning Association, told the Global Times in an interview via email that the UFLPA mostly affects the garment manufacturers in Vietnam, but Chinese investors in Vietnam’s spinning industry also use Xinjiang cotton.
She said the US Customs and Border Protection is urging importers to be proactive and to closely review their supply chains to ensure goods or materials are not sourced from Xinjiang. The manufacturers have to replace the materials or they must fulfill a series of complex documents, such as a list of the entities involved in each step of the production process.
Xinjiang accounts for over 85 percent of China’s cotton output, meaning that it’s hard for global companies to avoid Xinjiang cotton if they produce clothes at factories in Asia.
Among Asian economies, only China has cost advantages in terms of medium- and high- end cotton yarn and some fiber yarns, and the country has the most complete industrial chain and production capacity, according to Xu.
The UFLPA will force Vietnamese firms to wean themselves off raw materials produced in Xinjiang in order to ensure long- term access to the US market, Do Pham Ngoc Tu said, stressing that “finding new sources to replace Chinese fabrics will be challenging.”
“The US’ unreasonable sanctions on Xinjiang cotton and relevant products will further fuel global in