US bans imports from 37 Chinese firms over forced labour practices

By Bloomberg News

 

The Biden administration has added 37 companies from China’s mining, solar and textile sectors to its list of those banned from exporting to the US due to alleged forced labor practices in the Xinjiang region. 

The firms include mining giant Zijin Mining Group, and solar companies such as a subsidiary of JA Solar Technology Co., according to a statement from the Department of Homeland Security. The list also includes textile manufacturer Huafu Fashion Co. and 25 of its subsidiaries. 

 

US and European companies have been under pressure to pull away from factories that make clothes and other products in the Xinjiang region. Labor groups have documented alleged forced labor camps and other poor working conditions involving the local Uyghur population. China’s government disputes these claims.

 

The additions represent the largest single expansion of the Uyghur Forced Labor Prevention Act list since the law was passed in 2021, and bring the total number of companies banned to 144, according to the statement. 

 

Zijin has no assets or revenues in the US and the ban will not have a significant impact, the company said in a statement. The miner respects the personal freedom of employees and offers competitive salaries in Xinjiang, it said. 

 

The firm posted its biggest one-day decline since October on Wednesday with a fall of 5.9 per cent in Hong Kong. JA Solar and Huafu Fashion shares were higher.

 

Chinese Foreign Ministry spokesman Guo Jiakun called the law “evil” at a regular press briefing in Beijing on Wednesday, and said the bans on the companies amounted to interference in the country’s internal affairs.

 

He added that Beijing would “take resolute measures to firmly safeguard the legitimate rights and interests of Chinese enterprises.”

 

Major Chinese solar companies have already started switching to more expensive polysilicon from Western countries to eliminate risks linked to the law and import ban. As for JA Solar, the impact of its addition to the US list is expected to be limited as the subsidiary closed in 2024 and didn’t supply directly or indirectly to the US, according to a note by BofA Global Research.

 

“That said, this serves another reminder that Chinese solar will face rising trade headwinds especially in the US,” BofA Global said.

 

JA Solar and Huafu Fashion didn’t respond to requests for comment.