US expands China forced-labour embargo, banning two new firms

WASHINGTON – 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 labour 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, were added to the list “for working with the government of Xinjiang to recruit, transport, transfer, harbour or receive forced labour” involving Uighur and other ethnic minorities, the US Department of Homeland Security (DHS) said in a statement on Friday.

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

“These enforcement actions send a clear message to the importing community,” Mr 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 are looking into the potential impact of the US move. Ninestar said it complies with all applicable laws and regulations and abides by international labour protection standards, while Zhongtai Chemical said it does not expect a major impact on its operations as exports accounted for just 6.6 per cent of revenues in 2022.

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

The Uighur Forced Labor Prevention Act, which came into force in June 2022, bars imported goods partly or wholly made in China’s Xinjiang, unless companies can prove the products have no ties to forced labour.

More companies may be added to the list, Mr 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 north-western China that’s home to millions of Uighurs. 

Some $1.3 billion in shipments were subjected to special inspections since summer 2022 because of indications that they might be the product of forced labor, Mr 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 labour, he said.

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

A 2022 report by the Helena Kennedy Centre for International Justice at Sheffield Hallam University in the United Kingdom 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. BLOOMBERG