How the US’ Xinjiang labour law has crippled China’s cotton industry before even entering effect
- Chinese traders in Xinjiang say losses have been mounting for months, with vast inventories unsold as buyers shun what was once the world’s most expensive cotton
- Far-reaching implications from Uygur Forced Labour Prevention Act are expected to keep clouding trade relations between US and China, even as President Biden mulls tariff cuts
With the next harvest a mere three months away, cotton mills in China’s far west Xinjiang region are currently sitting on about 3 million tonnes of unsold inventory – a massive stockpile more than a million tonnes larger than it usually is this time of year.
That means more than half of the cotton harvested last autumn has yet to be sold.
“Xinjiang cotton used to be the most expensive cotton in the world. Now it has become the cheapest, and still no one buys it,” said the owner of a cotton-ginning mill in southern Xinjiang, who spoke on condition of anonymity. “Now I would lose 2,000 yuan (US$300) selling each tonne of cotton.”
This is owing to the impact of the Uygur Forced Labour Prevention Act – a United States law that effectively bans American imports of all products from Xinjiang unless conclusive evidence shows that no forced labour was involved in their production.
Even though the new law does not take effect until Tuesday, it is already having the intended effect on China’s cotton and textile industry.
“Downstream clients, especially those focusing on foreign markets, basically dare not use [Xinjiang cotton] any more, so they won’t buy,” the mill owner said.