Jun 9, 2023

US Expands China Forced-Labor Embargo With Ban on Two New Firms

Bloomberg News, Bloomberg News

HETIAN, CHINA - SEPTEMBER 4: (CHINA OUT) Uigur women weave carpets in the Hetian Carpet Factory on September 4, 2007 in Hetian of Xinjiang Uygur Autonomous Region, China. Hetian, nicknamed in China as "Carpet Country," has a 3,000 year history of carpet weaving. Xinjiang has been noted in ancient times along the old silk road as a political and commercial centre. It is the hub of an important commercial region, bordering Russia, Afghanistan, Kazakhstan, Tajikistan, Kyrgyzstan and Uzbekistan with Pakistan to its south. (Photo by China Photos/Getty Images) , Photographer: China Photos/Getty Images

(Bloomberg) -- The US expanded a ban on imports from China’s Xinjiang region, placing two more companies on its so-called entity list, the first additions since a law targeting forced labor in the area took effect a year ago.

Printing and imaging company Ninestar Corp. and eight of its subsidiaries, as well as Xinjiang Zhongtai Chemical Co. Ltd., were added to the list “for working with the government of Xinjiang to recruit, transport, transfer, harbor or receive forced labor” involving Uyghur and other ethnic minorities, the US Department of Homeland Security said in a statement Friday.

That widens the list to 22 companies, including solar material manufacturers Xinjiang Daqo New Energy Co. and Hoshine Silicon Industry (Shanshan) Co., Ltd., as well as the state-affiliated Xinjiang Production and Construction Corps.

“These enforcement actions send a clear message to the importing community,” Robert Silvers, the DHS under secretary for strategy, policy and plans, said in an interview. “Companies must know their supply chain.”

The move is certain to anger China, just as the the US seeks to mend deteriorating ties. Secretary of State Antony Blinken is said to be planning an official trip to China in the coming weeks, possibly including a meeting with President Xi Jinping.

Ninestar and Zhongtai Chemical said on Sunday in separate filings that they’re looking into the potential impact of the US move. Ninestar said it complies with all applicable laws and regulations and abides by international labor protection standards, while Zhongtai Chemical said it doesn’t expect a major impact on its operations as exports accounted for just 6.6% of revenues in 2022.

China’s Ministry of Foreign Affairs didn’t immediately respond to Bloomberg requests for comments sent outside normal business hours.

Read more: Forced Labor Dispute Is Completely Redefining US-China Relations

The Uyghur Forced Labor Prevention Act, which came into force last June, bars imported goods partly or wholly made in China’s Xinjiang, unless companies can prove the products have no ties to forced labor.

More companies may be added to the list, Silvers said. “There’s a pipeline of cases,” he said.

Congress passed the law unanimously with support from labor unions and activists. It seeks to put pressure on Beijing for allegedly detaining minorities in Xinjiang, an autonomous region in northwestern China that’s home to millions of Uyghurs.

Some $1.3 billion in shipments were subjected to special inspections since last summer because of indications that they might be the product of forced labor, Silvers said.

No exemptions have been granted because no entity has been able to provide clear and convincing evidence that the goods are free of forced labor, he said.

China has been accused of incarcerating more than 1 million Uyghurs in recent years, and for forcing Muslim citizens into forced labor, including the harvesting of cotton. Beijing has repeatedly denied that it’s committing such human-rights abuses.

A 2022 report by the Helena Kennedy Centre for International Justice at Sheffield Hallam University in the UK mentioned state-owned Xinjiang Zhongtai, saying it had accepted more than 5,000 workers through state-sponsored transfers, more than any company the authors documented.

--With assistance from Amanda Wang.

(Adds company responses in sixth paragraph)