Roving Periscope: With Xinjiang labor laws, the US killing China’s cotton industry
Virendra Pandit
New Delhi: Wars are an inhuman way of achieving objectives. The ‘human’ ways are diplomacy, trade wars, etc. The US has, through its trade war against China since 2018, inflicted terrible damage to the Dragon’s cotton and apparel industry, particularly for the products of the Uyghur Muslim-dominated, restive province of Xinjiang.
For this, America is using the Xinjiang labor law, which has crippled China’s cotton industry before even entering effect, the media reported.
The impact of this law is not restricted to the cotton and textile industry, but to other industries as well. This year, over 30 percent of Chinese traders have lost orders.
The value of China’s textile and apparel exports exceeded USD 300 billion in 2021. It was nearly 10 percent of all Chinese exports, market reports said.
The US law, known as the Uyghur Forced Labour Prevention Act, has led to huge losses to Chinese traders in Xinjiang and they have accumulated vast inventories unsold as buyers shun the product, which was the world’s most expensive cotton until three years ago, and is now the cheapest.
About three million tons of unsold cotton inventory is weighing heavy on China even as its farmers prepare to harvest the next crop in the next three months. The stockpile shows that over half of the cotton harvested last autumn remains unsold.
The US law effectively bans American imports of all products from Xinjiang unless conclusive evidence shows that no forced labor was involved in their production. Even before it became effective on Tuesday, it has already crippled the industry as buyers refused to buy the Xinjiang cotton and textile.
The US passed the law amid the ongoing trade war with China after allegations that the Chinese government forced the Muslims into labor camps in the Xinjiang Uyghur Autonomous Region to produce cotton and textile. US President Joe Biden signed it in December 2021.
In 2021, Xinjiang’s annual cotton output was 5.27 million tonnes, accounting for 91 percent of China’s total production. Xinjiang cotton comprised 67 percent of all cotton consumed in China that year.
Banning Xinjiang cotton means choking the supply chain of China’s textile industry, the media report quoting a cotton mill owner said. The law has become an effective embargo against goods from Xinjiang.
The West, particularly the US, Britain, and Germany, have long been accusing China of violating human rights and perpetrating atrocities over the Uyghur Muslim majority in Xinjiang.
The Southeast Asian nations are taking advantage of the unsold stockpile of Xinjiang cotton and textile. They have resumed their own production capacities this year, making it easier for the US apparel importers.
Although the US Act theoretically applies only to exports to America, the boycott from international garment brands has helped expand the law’s sphere of influence beyond US territories. No international textile brand can afford to annoy the US on Xinjiang cotton.
