Xinjiang: will the West’s sanctions on China force the issue or unravel?

South China Morninng Post. 16 April 2021

Below is an article published by South China Morning Post. Photo:Lau Ka-kuen.

Since 2019, dozens of Chinese officials and companies have been sanctioned or blacklisted by the West over alleged human rights abuses against Uygurs and members of other minorities in China’s western Xinjiang region.In January, alleged widespread use of forced labour in Xinjiang prompted the United States to ban imports of cotton and tomato products from the region, and Canada and Britain to announce similar bans.The latest sanctions in March from the European Union, the US, Britain and Canada mean that specified Chinese officials will be unable to travel to the sanctioning countries, and their assets there will be seized. They will probably have difficulty maintaining bank accounts, even Chinese ones. 

As international pressure on Beijing increases, it remains to be seen whether blacklisting firms and banning imports of Chinese products connected to Xinjiang will have a substantial economic impact. Some observers see the sanctions as merely symbolic objections to growing claims of repression in the region, which are unlikely to be heeded by Beijing.

According to Nick Marro, global trade lead at the Economist Intelligence Unit in Hong Kong, the sanctions would probably not have a discernible macroeconomic impact on China because they were “quite targeted” and carried “more symbolic than economic weight”. The real economic impact also depended on how stringently they would be enforced, he said.“The cotton industry is notoriously complex, and it could be difficult to clearly trace cotton items back to production in Xinjiang – a lot of this could ultimately come down to regulatory discretion by US authorities,” Marro said. Even if broad bans risked more consequences for US consumers rather than the Chinese economy, it would force compliance from companies looking to sell in the US market, he said. 

“In effect, these companies had little choice but to disavow the use of Xinjiang cotton in their supply chains,” Marro said. “And that doesn’t even touch on the potential ethical and reputational risks that Western firms might face among their home market consumers.”

There have been mounting accusations of mass detention of an estimated 1 million Uygurs and members of other mostly Muslim minorities in Xinjiang since reports first emerged in 2018. The US and Canada have labelled China’s policies there genocide.

Multiple international media, think tanks and non-governmental organisations have published photographs, documents and analysis showing claimed forced labour in Xinjiang. In December, an analysis of Chinese government documents by the Washington-based Centre for Global Policy found that in 2018 “at least 570,000” people had been forcibly mobilised to pick cotton there.

Beijing has dismissed the accusations against it, calling for evidence and repeating its combative rhetoric that Western countries should not intervene in Chinese politics. It has repeatedly accused Western governments of raising concerns about human rights in Xinjiang to destabilise China, and has defended its camps in the region, calling them “re-education” or “vocational training” centres for counterterrorism purposes, whose success it says is proven by an absence of terror attacks in the past four years.

During a visit to Xinjiang that coincided with the introduction of the latest sanctions, Minister for Public Security Zhao Kezhi, the country’s police chief, said Beijing would oppose “attempts to use Xinjiang to contain China” and “attempts to use terrorism to contain China” – lines used in Chinese state media to refer to the sanctions.

Hans Dietmar Schweisgut, who was the EU’s ambassador to China until 2019, said the bloc had a responsibility to respond. Its sanctions on four individuals and one entity accused of human rights abuses in Xinjiang were the bloc’s first against China since the bloody Tiananmen crackdown of 1989.

“I do not think anybody in Europe was under the illusion that this would change China’s position immediately,” he said. “But the EU could not fail to make its position clear without losing its credibility.” 

Leaked state documents describe repressive operations at China’s detention camps in Xinjiang

Although unable to quantify the amount of tomato products imported from Xinjiang specifically, US Customs and Border Protection said in January that US$10 million worth of tomato products had been imported from China into the United States in the previous year. About a quarter of the world’s supply of tomato ketchup is sourced from Xinjiang, according to Chinese state media reports.

Xinjiang’s cotton industry is more significant, producing a fifth of the world’s cotton and more than 80 per cent of China’s domestic cotton output.

Mei Xinyu, an economist and researcher at the Chinese commerce ministry, declined to say how China’s cotton production supply chain would shift if companies abandoned Xinjiang, but insisted China was too strong to be affected.

“The price of cotton will depend on supply and demand of the entire market,” Mei said. “Even if there are price fluctuations, we are still very resilient. Last year, even with increasing pressure from the US [previous sanctions over Xinjiang], and the pandemic, there was still growth in Xinjiang cotton exports.

“All we have to do is keep up the good quality of Xinjiang cotton production. I believe a lot of companies will still want to use Xinjiang cotton. Businesses are very smart; they will find ways to solve this problem,” Mei said, without specifying how. “The ones who suffer will be US companies and consumers.”

In recent months, multinational brands have been scrambling to unwind their supply chains from the region. Every year, US companies import about 1.5 billion garments that contain Xinjiang cotton, worth more than US$20 billion, according to Washington-based labour rights organisation Workers Rights Consortium.Major companies such as Swedish retailer H&M and US brand Nike have stated they will not source their products from Xinjiang, putting them in the crosshairs of state-led consumer boycotts in China.US customs authorities already moved last December to block imports of products made anywhere in the world that contained raw cotton harvested by the quasi-military Xinjiang Production and Construction Corps, which is responsible for a third of China’s cotton production and accounts for 17 per cent of Xinjiang’s economy.

Chen Daoyin, a political commentator and former professor at the Shanghai University of Political Science and Law, said he saw little possibility of China changing its approach towards Xinjiang regardless of cost, given the issue has escalated to become an important part of Chinese President Xi Jinping’s nationalism campaign.

“Relations between China and the world have fundamentally changed, and the Chinese government appears not to take Western democracies’ standards into consideration when it makes moves,” Chen said. 

“As long as the Communist Party keeps pushing the narrative of achieving the ‘Chinese dream’ … foreign sanctions will have no impact on China’s internal policies.”

Achieving what it calls “social stability” in Xinjiang, a region riddled for years by ethnic conflicts and violence, has become central to the party’s ruling legitimacy as China grows in stature on the world stage and its leaders try to present an alternative to Western ideals.

Activists and political figures argue there is scope to increase the pressure on China to make meaningful changes to its policies.Zumretay Arkin, advocacy manager at the World Uygur Congress, an international organisation of exiled Uygur groups, said sanctions on Xinjiang were a “step towards accountability”. She said more could be done, including calls to boycott the Beijing 2022 Winter Olympics.

“China can no longer hide,” she said. “The international community has been aware now of all the atrocities they’re committing, and I think we’re going to move towards even more concrete action in the coming months.

“I think [Beijing is] now focused on combating that narrative with its own propaganda and misinformation. In the eyes of the international community, [China has] become a country that doesn’t accept any sort of legitimate criticism. Retaliatory attacks have proven our point and made it easier to advocate for Uygur human rights, because we don’t really have to prove how China will behave … the world already knows.”

Although there was room for further sanctions to be placed on China – such as on more agricultural products, on imports and even financial sanctions – François Godement, senior adviser for Asia at think tank Institut Montaigne in Paris, doubted the West was ready to do so.

“Naming and shaming might impose a reputational cost – I think it already does – on China’s actions in Xinjiang, but [pressuring China is] a long, drawn-out process,” he said. “It’s very clear that the Chinese leadership is extremely determined not to give in to any form of material or moral pressure.”But Schweisgut, the former EU ambassador to China, said Chinese counter-sanctions on members of the European Parliament had put ratification of the China-EU Comprehensive Agreement on Investment in doubt.

“It is likely to be delayed, and is also linked to China’s commitment to ratify two International Labour Organization conventions on forced labour. This will now come under increased scrutiny,” he said.“Hopefully, the Chinese leadership will eventually accept meaningful access by independent experts to Xinjiang, in particular by the UN’s High Commissioner for Human Rights, Michelle Bachelet, and live up to its own proclaimed standards of openness and transparency.”