Hi, China Watchers. This week we probe U.S. importer panic about the impending implementation of the Uyghur Forced Labor Prevention Act, check in on the Covid-19 Wuhan lab leak theory and study the career path of Chinese President Xi Jinping’s preferred propagandist. We’ll also spotlight the memoir of a China tech industry whistleblower, who warns that U.S. companies doing business with Chinese firms increasingly face a choice between profit and patriotism.
Scroll down for the results of last week’s favorite China movie survey. And heads up that I’ll be on holiday but we’ve lined up some exciting guest hosts for the coming weeks — stay tuned!
Let’s get to it. — Phelim
American importers are fearing the worst as a law to tackle forced labor in China takes effect next week.
After President JOE BIDEN signed the Uyghur Forced Labor Prevention Act in December, a clock started ticking.
The U.S. government’s Forced Labor Enforcement Task Force, in consultation with the director of National Intelligence and the Department of Commerce, had 180 days to publish a plan for the law’s enforcement.
Trade groups warn that the task force has run out the clock and that key government agencies — Customs and Border Protection and the Department of Homeland Security — have failed to provide timely and adequate guidance to ensure that importers follow the law.
The lack of enforcement clarity — the law requires importers to prove that no element of their product was produced through forced labor — worsens the risk of supply chain disruptions from U.S. seizure of imports.
“Our members are uncertain of what’s acceptable proof to overcome that assumption of forced labor. … We’re not really getting answers [to] a lot of those questions and what we’re hearing is ‘you just have to wait,’’’ said EUGENE LANEY, president of the American Association of Exporters and Importers, a Washington, D.C.-based lobby group. “Our fear is that you’re going to start seeing goods held at the border … only because we haven’t been provided with informed guidance.”
The Uyghur Forced Labor Prevention Act aims to insulate U.S. companies and consumers from complicity in forced labor practices in Xinjiang. The U.S. government has concluded that forced labor is systemic in the western Chinese province — one of many state policies targeting Uyghurs that constitute genocide. A report released Tuesday by Sheffield Hallam University documented the use of forced labor in Xinjiang’s polyvinyl chloride production chain.
Chinese Foreign Ministry spokesperson WANG WENBIN on Wednesday dismissed Xinjiang forced labor allegations as “a big lie made by anti-China forces.”
Customs Catch-22. CBP published an operations guide on Monday specifying how businesses can prove that their products are untainted by forced labor in Xinjiang. Those documents include purchase orders, supply chain maps and “[a]ffidavits from each company or entity involved in the production process.”
The guidance provides specific details for three categories of imports closely associated with Xinjiang: cotton, tomatoes and polysilicon, a key component in solar panels.
U.S. importers say the CBP guidance is inadequate.
“[The guidance] still leaves many unanswered questions,” CRAIG ALLEN, president of the U.S.-China Business Council, said in a statement. “We are expecting implementation to be messy. They have released little information beforehand, and companies won’t know many of the details of what they must comply with until the date they must comply.”
The Department of Homeland Security, which supervises CBP operations, pushed back on suggestions that DHS and CBP had neglected to provide importers necessary information to prepare for the law’s implementation, pointing to a Xinjiang Supply China Business Advisory issued in July 2020 and an updated version of that notification published in July 2021.
“CBP is executing a robust engagement plan to ensure importers, stakeholders, and other interested parties have the information they need to comply with the Act,” a DHS spokesperson said in a statement. “U.S. businesses and importers have been made aware of forced labor and other concerns in the Xinjiang Uyghur Autonomous Region (Xinjiang) and elsewhere in China for some time.”
Meanwhile, the Chinese government is warning about the law’s potential negative impacts. “If implemented, the [law] will seriously disrupt normal cooperation between Chinese and American businesses, undermine the stability of global supply chains, and eventually hurt the US own interests,” LIU PENGYU, spokesperson for the Chinese embassy in Washington, D.C., told China Watcher in a statement.
Importers are crying foul at CBP’s requirement that importers comply with “specific importer guidance” imposed by the Forced Labor task force. The problem? The task force won’t publish that guidance until Tuesday, the day the law takes effect.
“Business wants something where if they check the box, comply with all the due diligence required, don’t use any company listed on the Entity List, that they’re clean and they’re not going to have their shipments blocked,” said JOHN RICHMOND, former U.S. ambassador-at-large for anti-trafficking and partner at Dentons US LLP. “I think that DHS is reading the law as an enforcement action more like the Foreign Corrupt Practices Act … where it’s your job not to violate the law and if you violate the law and you’re found out, then you’ll be held accountable.”
Bipartisan skepticism. Companies concerned about how the law’s implementation may affect them are getting no sympathy on Capitol Hill. Lawmakers say CBP has provided multiple webinars and has sent letters to U.S. importers with a history of sourcing from “locations or entities” linked to Xinjiang forced labor. It also has directed them to begin “supply chain management measures.”
“Businesses knew this day would come eventually, no matter how much they lobbied to delay and weaken the new law,” said Sen. MARCO RUBIO (R-Fla.), who sponsored the bill in the Senate. “There is no excuse for being complicit in the Chinese Communist Party’s genocide.”
A similar sentiment is echoed in the House. “I don’t have a lot of sympathy for some of these businesses who say, ‘We don’t know what’s coming down the road.’ I mean, really? Where have you been?” said Rep. JIM MCGOVERN (D-Mass.), the House sponsor.
Importers say that CBP outreach to businesses linked to previous Xinjiang imports has been more confusing than clarifying. “Some of the [CBP] letters were sent without any sort of background on exactly when and exactly how they found forced labor in the supply chain,” Laney said.
Chaos looms. There are concerns that CBP lacks the capacity to adequately enforce the law, and that it will need to deploy additional personnel and resources to vet imports from China for elements linked to forced labor.
“Most doubt that CBP can implement these requirements effectively, as they are already overwhelmed and understaffed,” said a Shanghai-based supply chain expert unauthorized by his company to speak on the record. “Will CBP be employing DNA testing facilities to ensure that no Xinjiang cotton is used? How can CBP truly know the extent of supply chains and if they are connected to Xinjiang when many companies do not?”
McGovern and Sen. JEFF MERKLEY (D-Ore.) last month sent a letter to the Homeland Security subcommittees of the House and Senate Appropriations Committee urging them to approve $70 million for CBP “to add enforcement personnel, technological capability, training, and other activities necessary to faithfully implement the law.” The subcommittees have not yet responded to the request.
Press pause, please. Importer representatives want a delay in the law’s launch and a rethink of its rollout.
“We’re advocating for Congress … to look at the law and try to determine whether they may need to make some tweaks around informed compliance, tweaks around what is acceptable for evidence and to put more pressure on the regulatory agencies to give us more bi-directional information and engagement,” said Laney. “We definitely need that kind of pushback from regulatory agencies to just say this could be very disruptive at the border and there’s a better way for us to do that, but I don’t get the sense that that’s going to happen.”
— LAWMAKERS FRET CHINESE MILITARY CAPABILITY ‘BLINDSPOTS’: The U.S. failure to correctly predict how the Russian and Ukrainian militaries would perform in the early stages of their ongoing war is fueling fears in Washington of major blindspots in official assessments of China’s military capabilities, POLITICO’s NAHAL TOOSI and LARA SELIGMAN reported Wednesday.
The concerns are rising as American spy agencies reexamine how they assess foreign militaries, and, according to a Biden administration official, are a key driver of a number of ongoing classified reviews. U.S. lawmakers are among those who’ve requested the intelligence reviews, and some have concerns about China in particular.
— AUSTIN DENOUNCES CHINA’S TAIWAN MOVES: Defense Secretary LLOYD AUSTIN vowed to beef up Taiwan’s self-defense capabilities amid an increase in “provocative and destabilizing” moves by Beijing, POLITICO’s STUART LAU reported Friday. “That includes assisting Taiwan and maintaining a sufficient self-defense capability,” Austin said at the Shangri-La Dialogue, a major forum on Asian security. His comments followed the State Department’s approval last week of a $120 million sale of military ship parts to the self-governing island.
Austin’s Chinese counterpart Gen. WEI FENGHE responded on Sunday by warning that Chinese forces “will fight at all cost” to defend its claim to Taiwan. Between the fiery speeches, the two had a bilateral meeting at which Austin urged greater People’s Liberation Army participation “in crisis communications and crisis management systems.” Chinese Foreign Ministry spokesperson WANG WENBIN on Monday put some teeth into Wei’s rhetoric by confirming Bloomberg reporting that China considers the entire Taiwan Strait to be under Beijing’s jurisdiction.
“The Taiwan Strait is an international waterway,” State Department spokesperson NED PRICEresponded Tuesday.
— LAWMAKERS PUSH COMPROMISE CHINA INVESTMENT SCREENING: A bipartisan set of House and Senate lawmakers is proposing a new compromise for government screening of American investments in China as part of a pending economic competitiveness bill aimed at confronting Beijing, POLITICO’s GAVIN BADE reported Monday.
The discussion draft would set up a new federal oversight panel with the authority to review and potentially deny new American investments in China or other adversarial nations over national security concerns, according to text of the draft reviewed by POLITICO and first reported by The Wall Street Journal. The Chinese Foreign Ministry’s Wang said Tuesday that the initiative used “national security as a catch-all pretext to ramp up unjustified investment review.”
— U.N.’S BACHELET RESIGNS AMID XINJIANG CRITICISM: U.N. High Commissioner for Human Rights MICHELLE BACHELET fell on her sword and announced Monday that she would not seek a second term “for personal reasons.” Bachelet has been a magnet for criticism for accepting Chinese conditions for her trip to China last month that Secretary of State ANTONY BLINKEN said “did not enable a complete and independent assessment of the human rights environment” in China.
Human rights activists have denounced Bachelet’s delay in releasing a U.N. report on Xinjiang and academics have slammed her failure to condemn Chinese policies in that region that “can be credibly called a genocidal program,” a group of 40 international Xinjiang scholars wrote in a public letter to Bachelet. Those failures prompted Merkley and McGovern, co-chairs of the Congressional Executive Commission on China, to call on Bachelet to “mitigate the damage … [or] be replaced.”
— FILE UNDER: DON’T GET YOUR HOPES UP: A research team tasked by the World Health Organization to probe the origins of the coronavirus that causes Covid-19 urged “further investigations” into suspicions that the virus may have escaped from a lab in Wuhan, China. “There has not been any new data made available to evaluate the laboratory as a pathway of SARS-CoV-2 into the human population,” a report released last week by the Scientific Advisory Group for the Origins of Novel Pathogens concluded.
China has rejected a World Health Organization plan for a follow-up Covid-19 origins investigation inside the country, a move that epidemiologists say denies the world critical data needed to identify and avert future pandemics. ZHAO LIJIAN at the Foreign Ministry on Friday called the lab leak theory “a false claim concocted by anti-China forces.”
— REPORT: CHINA’S DIGITAL MASTERY HARMS DEMOCRACY: The Chinese government is deploying a digital technology combination of governance standards, hardware, software and protocols to suppress liberal democracy, a report released Wednesday by the German Marshall Fund of the U.S., the International Republican Institute and the Alliance for Securing Democracy warned.
— XINHUA’S NEW CHIEF INVISIBLE PROPAGANDA PEDDLER: Meet FU HUA, the new president of China’s official news agency, Xinhua. Fu is a lifelong propagandist elevated from the agency’s editor-in-chief role for his dedication to Chinese President XI JINPING’S notion of “telling China’s story well,” DAVID BANDURSKI at the China Media Project reported last week.
Fu’s credentials include seven years in Beijing district and municipal-level propaganda departments before graduating to management roles at media outlets, including Beijing Daily and Economic Daily. But it’s his vision of state propaganda’s power and potential, both at home and abroad, that caught Xi’s attention.
“In remarks in November last year on the telling of China’s story, Fu Hua made reference to Xi Jinping’s first major speech on propaganda and ideology on August 19, 2013 — and to the need for propaganda officials to ‘be bolder in raising the banner and showing their swords,’” Bandurski wrote. “‘This is the propaganda that can be seen but we … must do the propaganda that cannot be seen,’ Fu said.”
Quincy Institute: Threat Inflation and the Chinese Military
BBC: African Eye: Racism for sale
The ASAN Forum: 20 Ways China Is Losing the Ukraine War
— TIBETAN PARLIAMENTARY CONVENTION COMING TO D.C.: The 8th World Parliamentarian Convention on Tibet will convene Wednesday-Thursday in Washington D.C. The meeting will bring together 90-100 Tibetan representatives from 15 countries.
The Book: Standing up to China: How a Whistleblower Risked Everything for His Country
The Author:ASHLEY YABLON is the former general counsel for the Chinese telecommunications company ZTE and the “whistleblower” in the book’s title.
What is the most important takeaway from your book?
China is extending her reach all around the globe and is busily building infrastructure in dozens of countries so that new technological Silk Roads can be established, all leading to one destination: China. Sooner or later — probably sooner — everyone who is in business is going to have direct dealings with Chinese companies and we need to be prepared. Most, if not all, of the big Chinese multinational companies, have close ties to the Chinese government, and their decision-making is based on what is good for China, not what is good for the U.S.
What was the most surprising thing you learned while researching and writing this book?
Many people seem unaware of the direct effect that relations between China and America have on all of us. Technology is our lifeline; it is at the heart of our lives and we have grown dependent on it in the West. So much of this technology is coming from China and right now Chinese piracy is estimated at roughly $600 billion in costs to the U.S. per year. And that must be the tip of the iceberg.
What does your book tell us about the trajectory and future of U.S.-China relations?
Chinese companies may again choose to ignore U.S. law, including sanctions that prohibit the selling of certain technology to Russia. While there is no suggestion of wrongdoing at this time, what it comes down to is I just don’t think ZTE, or China, can help themselves [from violating sanctions].
Got a book to recommend? Tell me about it at [email protected].
China Watcher Summer Movie Picks
A flood of subscriber suggestions for favorite films from our about China produced this eclectic quartet:
“Chungking Express” (1994): “Probably my number one movie of all time.” — AGNES in Warsaw, Poland.
“Lust, Caution” (2007) : “Watched it for the first time last month and was blown away.”— LINDSAY, New York City
“An Elephant Standing Still” (2018): “Superb.” — SAM H., London, U.K.
“Spy Game” (2001): “Imagine that U.S. forces based on Taiwan extract people from a prison in China. Talk about things that wouldn’t fly in Hollywood 20 years later.” – JOE MOSCHELLA, Los Angeles, Calif.
A couple China Watcher favorites:
“In the Heat of the Sun” (1994): An elegiac hymn to lost youth in Beijing at the height of the Cultural Revolution.
“Eat Drink Man Woman” (1994): A visual feast of food and intergenerational family drama in a mid-’90s Taipei wracked by social and economic changes upending traditional family ties and gender roles.
Thanks to: Ben Pauker, Matt Kaminski, digital producer Raymond Rapada, Gavin Bade, Stuart Lau, Nahal Toosi, Lara Seligman and editor John Yearwood.
Do you have tips? Chinese-language stories we might have missed? Would you like to contribute to China Watcher or comment on this week’s items? Email us at [email protected].