US’ Xinjiang law puts Chinese businesses in crosshairs, forcing them to take sides in political maelstrom

Exporters and factory owners in China’s manufacturing hub of Guangdong are bearing the brunt of the new law, which looks to have sweeping implications on global trade

Experts say law will strangle exports in various Chinese industries, forcing some foreign companies to leave Xinjiang, or even China altogether

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With cotton farming in Xinjiang at the centre of forced-labour accusations, a new US law will ban imports from the Chinese region. Illustration: Lau Ka-kuen

Ji SiqiandHe Huifeng

Published: 12:00am, 20 Jan 2022Updated: 9:35am, 20 Jan 2022

Ever since US President Joe Biden signed the Uygur Forced Labour Prevention Act into law last month, the apparel industry in China’s manufacturing hub of Guangdong province has been engulfed in a haze of uncertainty and, for some, panic.

Even though they are located about 3,300km (2,000 miles) away from Xinjiang – the far-west region of China that has become embroiled in international controversies in recent years – exporters and factory owners in the southern coastal province are already bearing the brunt of the new law, which looks to have sweeping implications on global trade.

The ban is an outlier among US import restrictions, which typically limit goods based on specific product types or individual suppliers, rather than entire regions.

Apparel exporters told the South China Morning Post they have received, or were at least expecting, requirements from their foreign customers to provide a paper trail documenting the entire supply chain of their goods – from the origin of the cotton at the bale level to the final production of the finished product.

The requirements also include showing proof that the supply chain does not involve forced labour in Xinjiang, which the US government will require the American importers to disclose after the ban on Xinjiang imports takes effect in June.

If we don’t request such certification, we will face great uncertainties on the US side too

E-commerce company manager

“If we ask the upstream suppliers for such proof, it would seem like that we are endorsing the law, and we would face great public pressure in China if we were to be reported or exposed, so no one wants to do it,” a cross-border e-commerce company manager based in Guangdong said, on condition of anonymity because of the sensitivity of the matter.