China trade: Xinjiang’s US exports down 90 per cent in February, 8 months after ‘forced labour’ law came into effect

INTERNATIONAL DESK: Exports to the United States from China’s far west Xinjiang region tumbled to below US$1 million for the first time on record in February, eight months after a law effectively banning American imports over forced labour concerns came into effect.

Companies from the Xinjiang Uygur autonomous region exported US$497,440 worth of goods to the US last month, representing a drop of almost 90 per cent compared with the same month last year, according to Chinese customs data.

The reading was the lowest since 2017 – the earliest available data from China’s customs portal.

Apparel, which was once the region’s top export to the US, disappeared in February’s data.

Along with cotton, tomatoes and polysilicon, apparel had been identified by US Customs and Border Protection as one of four “high-risk” sectors to be scrutinised.

Enacted in June, the Uygur Forced Labour Prevention Act effectively banned American imports of all products from Xinjiang unless conclusive evidence shows that no forced labour was involved in their production. Beijing has repeatedly denied the allegations of forced labour.

Exports from Xinjiang to the US initially surged in the first three months after the law came into effect, but have since declined for five consecutive months.

In January, the value of exports from Xinjiang to the US dropped by 18 per cent, year on year, to US$6.98 million.

Overall, China’s exports to the US continued their downward trend in February, dropping by 31.6 per cent, year on year.

In contrast, Xinjiang’s total exports in February almost doubled compared to a year earlier, with countries in central Asia the main destination. The region, though, relies on domestic investment and aid from the central government rather than exports to support its economy.

US customs has recently further enhanced scrutiny over products from Xinjiang, with all shipments manufactured in China required to submit the postcode of the factory starting from Saturday.

In a blog post published on the agency’s website in January, officials said that administering the act has become more difficult because Chinese firms are hiding the origin of goods.

As of March 3, the agency said it had stopped 3,237 shipments, valued at US$961 million, that were subjected to review or enforcement action according to the act.

A total of 424 shipments have been denied and 1,090 shipments were released into the US, with the remaining shipments pending.

The data showed that electronics; apparel, footwear, and textiles; and industrial and manufacturing materials are the top three industries impacted by enforcement actions.

The top five countries of origin for shipments subject to enforcement actions relating to the act were Malaysia, Vietnam, China, Thailand and Sri Lanka. (SCMP)