U.N. Xinjiang report puts a target on U.S. supply chains

What's next in U.S.-China relations.

Sep 08, 2022 View in browser   By Phelim Kine People stand in a guard tower on the perimeter wall of the Urumqi No. 3 Detention Center in Dabancheng in western China's Xinjiang Uyghur Autonomous Region on April 23, 2021. | Mark Schiefelbein/AP Photo Hi, China Watchers. This week we examine how the U.N.'s big human rights report on Xinjiang ups the pressure on U.S. firms to purge their supply chains of forced labor. We'll also unpack the Chinese Foreign Ministry's epic screed against House Speaker Nancy Pelosi and profile a book that assesses Xi Jinping's hard-line politics and personality. And stay tuned to this channel for a series of upcoming articles in the run-up to the ruling Chinese Communist Party's 20th Party Congress next month. Let's get to it. — Phelim   DON'T MISS -MILKEN INSTITUTE ASIA SUMMIT : Go inside the 9th annual Milken Institute Asia Summit, taking place from September 28-30, with a special edition of POLITICO's Global Insider newsletter, featuring exclusive coverage and insights from this important gathering. Stay up to speed with daily updates from the summit, which brings together more than 1,200 of the world's most influential leaders from business, government, finance, technology, and academia. Don't miss out, subscribe today.     Outgoing U.N. High Commissioner for Human Rights MICHELLE BACHELET was in the firing line for months, particularly ahead of a trip to Xinjiang in May that critics derided as a Chinese Communist Party-orchestrated Potemkin Village tour. But in literally her final minutes in office, Bachelet delivered on her promise to release a long-delayed Xinjiang report. And, for once, it didn't disappoint. The report was damning, including a conclusion that the "extent of arbitrary and discriminatory detention of members of Uyghur and other predominantly Muslim groups … may constitute international crimes, in particular crimes against humanity." The report's findings echo those of multiple international human rights organizations over the past four years. But such condemnation from the UN system, which the Chinese government routinely pledges its support for, gives fresh impetus to foreign governments to press China to end those abuses. Newly ensconced British Prime Minister LIZ TRUSS responded to the report by committing the U.K. "to act with international partners to bring about a change in China's actions." Sen. JEFF MERKLEY (D-Ore.) and Rep. JIM MCGOVERN (D-Mass.) said the report's conclusions underscored the need for "an independent mechanism to analyze and report on human rights in China." Beijing is unmoved. The U.N. report is "a patchwork of disinformation that serves as a political tool for the US and some Western forces to strategically use Xinjiang to contain China," Chinese Foreign Ministry spokesperson WANG WENBIN said last week. One of the report's recommendations targeted the business community and urged it to take "all possible measures to meet the responsibility to respect human rights across activities and business relationships … including through enhanced human rights due diligence, and report on this transparently." That aligns with the Uyghur Forced Labor Prevention Act (UFLPA) that went into effect as U.S. law on June 21. The law aims to insulate U.S. companies and consumers from complicity in forced labor practices in Xinjiang. The U.S. government has concluded that the practices are among abusive state policies targeting Uyghurs that constitute genocide. But U.S. trade groups have warned that the law imposes onerous burdens of proof for U.S. importers that will snarl already fragile supply chains. The Department of Labor's deputy undersecretary for international affairs, THEA LEE, sat down with your host recently to discuss the UFLPA's rollout. The interview has been edited for length and clarity. How has the UFLPA's rollout gone so far? Lee: We've had mostly positive feedback. There's a little anxiety certainly amongst some of the business community, but Customs and Border Protection is doing its job. They devoted a lot of resources to being able to trace this and we gave a lot of thought to the enforcement strategy and we understand certainly from Congress that they are obviously very supportive of its work and want to hear from us regularly on how the enforcement is going. Things are definitely moving forward and [CBP has] been able to identify and stop shipments as needed. The business community says it's very difficult for companies with complex supply chains to comply with UFLPA and prove at short notice that their supply chains don't have Xinjiang links. LEE : This is an important responsibility for companies. They buy it, they put their name on it, I assume they're doing quality control. Therefore, they should be able to ascertain what the labor conditions are and in terms of the inputs that they put into their final product. And if they don't do it, who will? What we're looking for from companies is transparency and accountability in their supply chains, and integrity. And I don't think that's asking too much. A little over a year ago, the U.S. government, including the Labor Department, DHS and State issued a business advisory about production in Xinjiang. The message to the business community was you may be at legal risk if you are still producing in Xinjiang because we don't believe you have the ability to do due diligence in Xinjiang because the Chinese government severely constrains company's ability to even ask questions, let alone be able to visit their own facilities on an unannounced basis and talk to workers without surveillance. If you don't have that ability to do due diligence, I think it is irresponsible on the part of corporations to continue sourcing from a place like that where there are allegations of very, very egregious labor abuses, forced labor [and] genocide. What's your assessment of the Chinese government's recent ratification of two International Labor Organization covenants against the use of forced labor? LEE: It's a little bit early to say what substantively has changed in terms of Chinese behavior. There's still a lot of issues with respect to transparency and access. And I think that's a good place for the Chinese government to start if they, in fact, assert there is no forced labor and that these allegations are baseless. The best way for the Chinese government to refute that is to allow the kind of access that I think that both companies and governments have asked for. If the Chinese government isn't willing to do that, then that in itself is a huge problem. What's your response to corporate complaints that the UFLPA imposes an undue burden of proof on companies to demonstrate that their supply chain isn't tainted with forced labor? Lee: For companies that aren't producing in Xinjiang or buying anything from Xinjiang, I don't think this is a big burden. If their supply chain is made with goods from Xinjiang or from one of the producers on the entity's list, then [they're] going to have a bigger burden of proof precisely because there is so little transparency into what's happening in China. The Chinese government has kicked out many of the [third party corporate] auditors. If the government doesn't allow third-party auditors to do their jobs, then companies that are still producing in Xinjiang do have a heavy lift to prove with adequate documentation that they don't have forced labor in their supply chain. There are many companies that produce in Xinjiang that tell us "Oh, my supply chain doesn't have forced labor." I'm really not sure what their basis is for asserting that with confidence. TRANSLATING WASHINGTON — KERRY HOPES CHINA CLIMATE TALKS RESUME: President JOE BIDEN's climate envoy, JOHN KERRY, is hopeful that the Chinese government's suspension of climate talks with the U.S. last month is strictly temporary. "My hope is that President Xi will recognize the benefit of getting both of us moving in the same direction," Kerry told Bloomberg on Monday. Beijing suspended joint climate talks in a package of reprisals for House Speaker NANCY PELOSI's controversial visit to Taiwan last month. That suspension has derailed the possibility of high-level joint talks necessary to prepare for the COP 27 climate talks in Egypt as well as a working group on methane emission reductions scheduled to meet this month. — STATE APPROVES TAIWAN ARMS SALE: The State Department informed Congress on Friday that it had approved an estimated $1.1 billion arms sale to Taiwan that includes 60 anti-ship missiles and 100 air-to-air missiles to bolster the island's defenses against a potential Chinese attack. "These proposed sales are routine cases to support Taiwan's continuing efforts to modernize its armed forces and to maintain a credible defensive capability," a State Department spokesman said. Beijing is not happy. "China will resolutely take legitimate and necessary counter-measures," Chinese embassy spokesperson LIU PENGYU tweeted of the approval on Friday. Hot from the China Watchersphere Chinese President Xi Jinping attends a signing ceremony with Kazakhstan President Nursultan Nazarbayev on Aug. 31, 2015. | Lintao Zhang, Pool Photo via AP — XI IS CENTRAL ASIA BOUND: Kazakhstan's foreign ministry has announced that Chinese President XI JINPING will visit the country on Sept. 14, the South China Morning Post reported Monday. The likelihood of that Central Asian travel plan rose on Wednesday when the Russian ambassador to China, ANDREY DENISOV, told reporters that Russian President VLADIMIR PUTIN will meet with Xi on the sidelines of the Sept. 15-16 meeting of the Shanghai Cooperation Organization in Uzbekistan. The Chinese Foreign Ministry has not confirmed the trip — and reports last month about an imminent Xi trip to Saudi Arabia were inaccurate — but, if verified, it will mark Xi's first journey outside of China since January 2020. "If Xi does travel to Central Asia it shows a very high level of confidence that he's got the [Chinese leadership] situation under control and that he will get his third term [at next month's 20th Party Congress]" said YUN SUN, China program director at the Stimson Center. — GERMANY'S BEIJING ENVOY COMES OUT SWINGING: PATRICIA FLOR, Germany's new ambassador to China, devoted her first public speech in Beijing on Friday to tough talk on hot button issues including Taiwan, China's "unfair" rules governing foreign firms and the "adverse effects" of China's zero-Covid strategy. "Instability around Taiwan and in Asia would inevitably have an impact on major economic players and … on a major shipping route for international trade, with repercussions around the globe," Flor said in a speech at the China International Fair for Trade in Services. TRANSLATING CHINA House Speaker Nancy Pelosi, right, and Legislative Yuan Deputy Speaker Tsai Chi-chang arrive for a meeting in Taipei, Taiwan, Aug. 3, 2022. | Taiwan Presidential Office via AP — CHINA'S EPIC ANTI-PELOSI SCREED: If you thought the Chinese government couldn't squeeze out another word of invective targeting House Speaker NANCY PELOSI over her visit to Taiwan last month , think again. China's Foreign Ministry has spewed a 10,293-word mega-screed denouncing Pelosi, the White House and Taiwan's government. The Foreign Ministry gave this 11-point poison pen production the deceptively benign title of " Some Facts About Pelosi's Visit to Taiwan." The "facts" are questionable at best, but it name checks a cast of characters including New York Times columnist THOMAS FRIEDMAN, former Secretary of State HENRY KISSINGER and Rep. MARJORIE TAYLOR GREENE (R-Ga.) as alleged endorsers of Beijing's anti-Pelosi ire. It reads like a high volume gaslighting session by wolf warrior MOFA spokesperson ZHAO LIJIAN, so China Watcher has distilled the document's key points so you don't have to: 1. The Pelosi visit and China's reaction are 100 percent the fault of the U.S. "The US side has been pushing disinformation to confuse right and wrong and confound black and white, criticizing China's legitimate countermeasures and trying to mislead the world about the Taiwan question." 2. Separation of powers between the U.S. branches of government is a fiction. "Under neither international law nor US domestic legislation does 'separation of powers' give the US the excuse to defy international obligations … provoke against China's sovereignty, and break its own commitment on the Taiwan question." 3. The U.S. wields democracy to bully China. "Pelosi's visit to Taiwan has nothing to do with democracy. The US still tries to divide the world into 'democracies' and 'non-democracies' by its standards and blatantly stokes division and confrontation." 4. The U.S. is conspiring with pro-Taiwan independence forces. "It is the US and the 'Taiwan independence' separatist forces that are changing the status quo across the Taiwan Strait and stoking crisis." 5. China's response to Pelosi's Taiwan visit was totally reasonable. "They are necessary and timely defensive countermeasures aimed at safeguarding China's sovereignty and security." 6. Those Chinese live-fire military drills in the Taiwan Strait were totally normal. "It is legitimate and lawful for the Chinese military to conduct military exercises and training in the waters near China's Taiwan Island. 7. The world supports China's response. But the topline supporters that the Foreign Ministry lists include Putin, the Taliban and the governments of Syria, North Korea and Myanmar. 8. Don't confuse Taiwan with Ukraine — but we'll invade if we have to. "We do not renounce the use of force and reserve the option of taking all necessary measures." 9. China's sanctions against Pelosi are totally legit. But U.S. sanctions against Chinese companies and CCP members, however, are applications of state power "to unreasonably suppress Chinese institutions and enterprises." 10. The U.S. has severely harmed bilateral relations. "The US expects China to…swallow the bitter fruit of having its core interests seriously damaged. This is typical hegemonic mentality and gangster logic." 11. The U.S. is to blame for the end of climate cooperation. "Due to the egregious impact of Pelosi's provocative visit to Taiwan, China had to suspend the bilateral climate talks with the US." HEADLINES Asia Times: " Indonesia getting 'grey-zoned' by China " Wall Street Journal: " U.S.-China Audit Deal Is Only Window Dressing " Associated Press: " Hong Kong speech therapists convicted of sedition over books " HEADS UP — BIDEN'S PACIFIC ISLANDS SUMMIT COMING SOON: The Biden administration announced Friday that its first U.S.-Pacific Island Country Summit will take place Sept. 28-29 as it ramps up efforts to counter China's growing diplomatic influence in the region. But the summit — part of a flurry of U.S. diplomatic efforts to reengage with the region — may pose more challenges than opportunities for the administration. Read your host's analysis here. One Book, Three Questions The cover of the book "China's Leaders" is shown. | Steven Leard for Polity Press The Book: China's Leaders From Mao to Now The Author: DAVID SHAMBAUGH is founding director of the China Policy Program in the Elliott School of International Affairs at George Washington University. How will Xi Jinping rule China — and engage with the international community — after he receives a third term in October? I would anticipate "more of the same": more domestic repression, more external assertiveness and possibly aggression. Xi is not about to change course, and certainly not in a more liberal or cooperative direction. What we've seen in his first decade in power is what we can anticipate more of going forward. If anything, Xi and China may become even more brazen externally — further solidifying the de facto alliance with Russia, confronting the United States, probing and attempting to undermine Western resolve and U.S. alliances worldwide, leveraging China's power against its Asian neighbors and Taiwan, and continuing to broaden China's military footprint worldwide. However, I would suggest that this will actually be counterproductive for Beijing's global reputation and influence (which is already suffering). China will likely encounter increasing suspicions and pushback abroad — but if the Xi regime's behavior to date tells us anything, Beijing is tone-deaf to such perceptions and will only double down on its assertiveness rather than adjust to more accommodating positions. It is more difficult to anticipate the consequences of Xi's continued rule domestically. The one near certainty is continued widespread repression, surveillance, and illiberal policies. Xi is ruthless, he views domestic state-society relations in a zero-sum fashion, and he is ideologically rigid and doctrinaire. What is less clear are the implications of the multiple negative trends in China's economy: slow growth, ballooning (and possibly exploding) debt loads, a stagnant property sector, an overleveraged financial sector, a continuing crackdown on big tech, rising unemployment, and other systemic problems. Thus far, Xi has provided no evidence that he understands — much less knows how to contain — these economic challenges. What was the most surprising thing you learned about Xi while you researched and wrote this book? What was new to me was his three years (1982-85) as deputy party secretary of Zhengding County in Hebei province. I was also surprised by how undistinguished his 17 years (1985-2002) in Fujian province was. Seventeen years in one of China's most dynamic provinces and not a single accomplishment is attributable to Xi Jinping. If there was surprise, it was how Xi managed to avoid being tainted by any of the high-profile corruption cases during his tenure. Xi's subsequent time in Zhejiang (2002-2007) was similarly undistinguished, as was his seven months as Shanghai party secretary. Thus, for a leader who has had such an outsized impact on China, once he reached the top, the most surprising thing about Xi is just how underwhelming and inconsequential his 26 years as a provincial leader were. What does your analysis of Xi's history, motivations and objectives tell us about the trajectory and future of U.S.-China relations? It mainly tells me that Xi Jinping's priorities and practices are not congruent with American interests and policies. Xi is a Marxist ideologue and Leninist leader who views the United States and comprehensively threatening to Chinese interests, as he defines them. I do not see Xi as pragmatic, compromising, or cooperative in his approach to the United States. If he were to change course in a more liberal direction domestically and less assertive posture externally, this would give Washington a China to work with. This will not happen under Xi — thus I expect continuing difficulties for the U.S. in dealing with Xi Jinping's China. Got a book to recommend? Tell me about it at pkine@politico.com. Thanks to: Ben Pauker, Matt Kaminski and digital producer Andrew Howard. 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 chinawatcher@politico.com.   Follow us

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