China, US Forced Labor Prevention Act Raises Concerns Over Polysilicon Price Increase

China's Ministry of Commerce Warns of Retaliatory Measures... Global Supply Chains to Face Greater Challenges
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[Asia Economy Beijing=Special Correspondent Jo Young-shin] China's Ministry of Commerce has announced that it will take corresponding measures and warned of retaliation following the enactment of the U.S. 'Forced Labor Prevention Act.' The U.S. Congress passed a bill last year that considers all products produced in the Xinjiang Uyghur region to be made through forced labor, completely banning the import of products from that region. President Joe Biden signed the bill in December last year, and the law took effect on the 21st (U.S. local time).

Photo by Xinhua News Agency Capture

China's Ministry of Commerce stated that the U.S. banned imports of products made in the Xinjiang region citing human rights abuses, which it claims violates World Trade Organization (WTO) regulations. It further emphasized that the U.S. is pursuing unilateralism and protectionism under the guise of human rights to contain China.

The Ministry described the Forced Labor Prevention Act as a typical economic coercion act, pointing out that the law will seriously damage the interests of Chinese and American companies as well as American consumers. It also warned that it will further complicate global supply chains and stimulate global inflation.

The Ministry asserted that there is no human rights suppression against ethnic minorities in Xinjiang and claimed that China is making efforts toward the economic development of the Xinjiang Autonomous Region. It explained that the disposable income of residents in the Xinjiang Uyghur Autonomous Region increased from 23,000 yuan in 2014 to 37,600 yuan last year, and in rural areas, it rose from 8,700 yuan to 15,600 yuan. It also added that 3.06 million people in the Xinjiang region have been lifted out of poverty due to the Chinese government's efforts.

The Ministry stated that the U.S. hopes that the Forced Labor Prevention Act will cause massive unemployment among the Xinjiang Uyghurs and the resulting social unrest, and that it is well aware of the U.S.'s intentions.

The Ministry urged the immediate cessation of political manipulation against China and warned that China will take necessary measures to safeguard its sovereignty, security, and development interests.

Within China, there is speculation that if the U.S. actually enforces the law, the damage to themselves will be significant, so enforcement will be limited. The dominant view is that the U.S., facing an inflation (price) crisis, cannot impose restrictions on Chinese (Xinjiang) products.

Chinese media have cited cotton and polysilicon, arguing that only the U.S. will suffer damage. The Global Times reported that last year the U.S. imported $9 billion (approximately 11.67 trillion KRW) worth of Chinese cotton products. It also explained that Xinjiang supplies 45% of the world's polysilicon used for solar cells.

Professor Bao Zhenyun of Renmin University said, "The U.S. is interfering in the global value chain to achieve political goals," adding, "The U.S. idea of excluding China from the global supply chain with just one law is unrealistic."

Some in China predict that with the formal enactment of the U.S. Forced Labor Prevention Act, there will be side effects such as rising international prices of cotton and polysilicon.

This content was produced with the assistance of AI translation services.