US targets five Chinese firms over alleged forced labour in Xinjiang

The move has implications for solar's supply chain and could force US companies to find material elsewhere.
The move has implications for solar's supply chain and could force US companies to find material elsewhere.PHOTO: REUTERS

WASHINGTON (REUTERS, XINHUA) - The Biden administration imposed trade bans on five Chinese companies over forced labour allegations in Xinjiang, the White House said on Thursday (June 24), citing the Group of Seven’s recent pledge to clean up the global supply chain.

It ordered a ban on US imports of a key solar panel material from Chinese-based Hoshine Silicon Industry and separately restricted exports to Hoshine, three other Chinese firms and the paramilitary Xinjiang Production and Construction Corps (XPCC), saying they were involved with the forced labour of Uighurs and other Muslim minority groups in the Chinese province.

The US Department of Labour also added polysilicon produced with forced labour in China to its “List of Goods Produced by Child Labour or Forced Labour”.

“These actions demonstrate our commitment to imposing additional costs on the People’s Republic of China for engaging in cruel and inhumane forced labour practices and ensuring that Beijing plays by the rules of fair trade as part of the rules-based international order,” the White House said.

Beijing has dismissed accusations of genocide and forced labour in Xinjiang as lies.

The three other companies added to the US economic blacklist were Xinjiang Daqo New Energy, a unit of Daqo New Energy Corp; Xinjiang East Hope Nonferrous Metals, a subsidiary of Shanghai-based manufacturing giant East Hope Group; and Xinjiang GCL New Energy Material, part of GCL New Energy Holdings.

At least some of the companies are major manufacturers of monocrystalline silicon and polysilicon used in solar panel production.

The White House, in its statement, said the companies’ practices not only ran counter to American values but also tipped the scales against US workers “by exploiting workers and artificially suppressing wages”. It noted the Biden administration’s push to boost the US solar industry.

Having the US Customs and Border Patrol seize imports from Hoshine was “based on information reasonably indicating that Hoshine used forced labour to manufacture silica-based products”, it added.

Hoshine Silicon Industry earlier said on an interactive investor platform that it does not export industrial silicon to the United States directly, which would limit the ban’s impact.

Xinjiang Daqo New Energy, in an e-mail to Reuters, said it had zero tolerance towards forced labour, and does not directly sell or buy from the US so there would be no significant impact on its business.

The other companies or their parent firms, including XPCC, did not respond to requests for comment, or could not be reached.

At a regular media briefing in Beijing on Thursday, Chinese foreign ministry spokesman Zhao Lijian strongly condemned the sanctions.

Mr Zhao said China will take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies.

“China strongly condemns the United States imposing sanctions on Chinese companies based on lies and false information,” Mr Zhao said.

“The so-called ‘forced labour’ and ‘genocide’ in Xinjiang are the biggest lie of the century. The United States abused its 'entity list' to suppress Xinjiang’s photovoltaic industry, based on fabrications," he said. "Such actions not only violate international trade rules and the principles of the market economy, but also undermine the global industrial and supply chains."

From cotton to the photovoltaic industry, and from agriculture to industry, the US uses human rights as a disguise to do all it could to cripple the industrial development in Xinjiang, Mr Zhao said.

“What the United States does is detrimental to Xinjiang people’s rights to subsistence and development, and also exposes that what they are after is not facts, truth or Xinjiang people’s well-being, but to create ‘forced unemployment’ and ‘forced poverty’ to mess up Xinjiang and contain China’s development,” he added.

Mr Zhao also said that US politicians should reflect more on the country’s history of genocide against Native Americans and African Americans in Tulsa, and think more about how to solve human rights problems such as racial conflicts and forced labour in the US.