Thursday, May 26

The Battle for Xinjiang Cotton | International

The confrontation between the US and its Western allies and China has moved from technology to the agrotextile industry. Human rights and the use of forced labor among the Uighur minority in the Xinjiang region are the new banner driving the latest round of sanctions against Beijing by the United States, Canada, the United Kingdom and the European Union. Companies are being forced to rethink, and even duplicate, their supply chain amid successive calls for a boycott of their products from China. One more step in the decoupling of the global economy.

China boasts that its textile industry is the largest in the world and that it is the world’s leading exporter of clothing. According to the page of the Chinese Cotton Textile Association, the textile industry accounted for 14% of Chinese GDP in 2018 and was the second most important sector for the economy, only surpassed by the information technology industry. Within China, Xinjiang is the region that produces the most cotton in the whole country, representing by itself one fifth of all world production. With these data, it is easy to understand that China is not going to let the attacks on Xinjiang cotton pass just like that.

Over the last year, reports from various institutions and organizations in defense of human rights – from Australian Strategic Policy Institute, Human Rights Watch o la Stanford University, among others – have been denouncing the transfer of citizens of Uighur ethnicity and other minorities, some directly from the so-called re-education camps, to factories and technological, textile and automotive plants throughout the country in conditions that experts do not doubt in qualifying as forced labor. The echo of these reports in leading global media put pressure on the large textile chains and some, such as H&M, Nike or Burberry, decided to veto the use in the manufacture of their cotton garments from Xinjiang.

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Mario Esteban, researcher at the Elcano Royal Institute and a professor at the University, he has traveled several times to Xinjiang, has visited some of its factories and the stores that some of these same chains have in the region. It does not detract from the veracity of the reports, but asks to put the complaints into context. “With a territory three times the surface of Spain and a powerful business and industrial structure throughout the region, we must be careful not to generalize and consider that the entire cotton and textile industry in Xinjiang uses forced laborers, because clearly this is not the case. ”, He assures.

Just before leaving the White House, the still president of the United States Donald Trump approved a regulation in mid-January that prohibited the importation of cotton from that region. It is not such a simple measure. The latest global data, corresponding to the 2019-2020 campaign, put India at the forefront of global cotton production with 6.4 million metric tons, followed by China (5.9 million) and the United States (4.3 million) and, far behind, Brazil, Pakistan and Turkey. Despite its high production, China not only does not export cotton as a raw material, but, given the power of its textile industry, it is the world’s leading cotton importer, with 1.55 million metric tons, above Bangladesh (1 , 52 million) and Vietnam (1.41 million).

At 5,688 kilometers from Xinjiang, in the German city of Bremen, the controversy surrounding cotton produced in the Chinese northwest is being followed with extreme attention. The capital of the State of the same name is the seat, since 1872, of the Bremen Cotton Bag, an international arbitration body to resolve disputes over contracts and qualities in the cotton sector. The Bremen Stock Exchange is also a defender of the interests of the textile industry and warns that compared to a country, China, which is a net cotton importer and given the complex structure of global supply chains, it is not so easy to ban all cotton from Xinjiang. “On the one hand, cotton from that region can be easily absorbed by Chinese consumers, so the US ban would not affect them. But it is that Xinjiang cotton once processed can be exported, either in the form of thread or as a fabric to third countries to transform it in the most diverse ways before entering the US market. In this way, it is very difficult to trace the cotton of the finished products to Xinjiang ”, explains Elke Hortmeyer, director of the organization.

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Added to the US restrictions were sanctions approved together with Canada, the United Kingdom and the European Union against senior Chinese officials and organizations for their involvement in human rights violations against the Uighur minority in Xinjiang. Beijing accused Western powers of “seriously damaging Chinese interests and sovereignty, and maliciously spreading lies and misinformation.” use of Xinjiang cotton. “The boycott has always been a fundamental tool for China, its 1.4 billion consumers and its ascendancy over many countries in the region make it difficult for companies to ignore this call,” explains Esteban. As a curiosity, Bank of America analyzed in a recent report of perspectives on the luxury sector the times that the name of Burberry – one of the companies affected by the campaign – was quoted on Chinese social networks, but refused to share its estimates on the real damage to the sector.

Countries like Germany go further and consider requiring an audit of textile companies (due dilligence in slang) of their supply chains. “The employers have already presented a protest against the bill, precisely now that the pandemic has weakened the situation of the companies and that the law is already demanding changes to comply with strict environmental and social criteria,” says Hortmeyer. “From the strict point of view of cotton we hope and hope that there will be more discussions and that a large number of producing countries be included in the negotiations,” he concludes.

“Companies are once again affected by geostrategic tension. They can hardly give up on the Chinese market and will have to invest there in a double supply chain, one for the domestic market and the other for export. This is only going to exacerbate the process of decoupling and bipolarization towards which the global economy is advancing ”, underlines Mario Esteban.

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