The latest batch of 11 Chinese companies blacklisted in the US over claimed human rights violations in the treatment of Uygurs in Xinjiang includes a cooperative partner of Google, a clothing maker recently dumped by US retail giant Costco, and a touch-screen provider that is a subsidiary of an Apple supplier.
“Beijing actively promotes the reprehensible practice of forced labour and abusive DNA collection and analysis schemes to repress its citizens,” Secretary of Commerce Wilbur Ross said.
“This action will ensure that our goods and technologies are not used in the Chinese Communist Party’s despicable offensive against defenceless Muslim minority populations.”
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Beijing firmly opposes the sanctions as interference in its internal affairs and an attempt to oppress Chinese companies, and urged the US to “correct its mistakes.”
The additions on Monday involved some big but not well-known manufacturers, which individually generated at least 11.7 billion yuan (US$1.68 billion) of sales and 420 million yuan of profits in 2019.
Blacklisted Chinese companies will face restrictions on purchasing components and technology from US companies.
Some 48 Chinese public security bureaus and companies including the 11 new oneshave been put on the entity list since October 2019. They include video surveillance company Hikvision, facial recognition software company Megvii Technology and surveillance equipment maker Zhejiang Dahua Technology.
How have Chinese companies reacted?
Changji Esquel Textile was launched in 2009 by Hong Kong-based Esquel Group, which produces clothing for Ralph Lauren, Tommy Hilfiger and Hugo Boss. The company has written to the US Commerce secretary to appeal against the decision to put it on the sanctions list for hiring forced labour in Xinjiang.
“Let me be clear: Esquel does not use forced labour, and we never will use forced labour. We absolutely and categorically oppose forced labour. It is abhorrent and completely antithetical to Esquel’s principles and business practices,” Cheh said in his letter to Ross, a copy of which was obtained by South China Morning Post.
Two subsidiaries of Chinese genetics firm BGI Group – Xinjiang Silk Road BGI and Beijing Liuhe BGI – were also added to the list.
“Beijing LiuHe’s core business is the provision of first-generation sequencing services for scientific research. Xinjiang Silk Road BGI was established in November 2016 but has yet to carry out any business,” BGI Group said in a statement to the Post on Wednesday morning.
“The specific reasons for being included in the entity list have not yet been properly communicated and BGI is currently analysing and evaluating the potential impacts of this decision.”
The two companies were added to the list “in connection with conducting genetic analyses used to further the repression of Uygurs and other Muslim minorities in Xinjiang”, according to the US Commerce Department.
Beijing Liuhe’s net profit in 2019 was not more than 1 per cent of the listed company’s net profit in the same period, BGI Group said in a filing on the Shenzhen Stock Exchange. The company added that they would continue to communicate with the US Department of Commerce, and work on various measures to eliminate adverse effects.
Shanghai-listed KTK Group manufactures products used in railway transport, including more than 2,000 series of products – from electronic systems to seats – used in high-speed trains.
“KTK Group is a legally operating company, and its compliance has passed the audit and certification of international third-party professional organisations,” the company said in a statement late on Tuesday.
“The company has no investment projects in the US, only imports a small amount of replaceable accessories from the US each year and does not rely on American technology,” it said.
“At the same time, the small amount of exports to the US each year will not have a significant impact on the company’s operations. In 2019, the company’s exports to the US accounted for less than 0.5 per cent of the company’s total revenues.”
It has strategic partnerships with China Railway Construction Corp, Bombardier, Alstom, Siemens and other international companies, according to its website.
In 2019, it reported a revenue of 3.75 billion yuan, a 16.3 per cent increase from the previous year, and a net profit of 395.6 million yuan, a 10.5 per cent decrease.
Shanghai-listed Tanyuan Technology mainly produces cooling graphite sheets with high thermal conductivity for use in electronic devices such as smartphones and tablets. It produces for Samsung, Huawei and Oppo, among others, according to its website.
“The company’s products have not been directly exported to the US, and also has not imported core technology, bought key equipment or bought important raw materials from American companies. The company’s production and operations are normal, and being included in the entity list will not have a material impact on the company’s daily operations,” the company said in a statement late on Tuesday.
For the previous financial year, it reported revenue of 548.4 million yuan, and a net loss of 40.9 million yuan.
What acts had the US taken against some of the latest Chinese companies targeted?
Hair product manufacturer Hetian Haolin Hair Accessories was also added to the list on Monday.
On May 1, US Customs and Border Protection (CBP) said it was halting imports of the company’s hair products, citing evidence of forced labour.
On July 1, CBP seized in Newark a shipment of almost 13 tons of hair products and accessories worth over US$800,000 with human hair that originated in Xinjiang.
Clothing manufacturing Hetian Taida Apparel Company was also added to the list on Monday.
US retail giant Costco had stopped selling children’s clothing manufactured by the company in October, according to The Wall Street Journal.
What other companies are on the list?
Electrical appliance manufacturer Hefei Meiling Company, is a wholly-owned subsidiary of Shenzhen-listed Changhong Meiling Company. Hefei Meiling reported annual revenue of 4.47 billion yuan and a net profit of 26.6 million yuan for 2019.
Nanchang O-Film Tech is a producer of touchscreens displays for smartphones and tablet devices. It is a subsidiary of Shenzhen-listed O-Film, (which owns 49 per cent of the company) a supplier for Apple’s iPhone. O-Film hosted Apple chief executive Tim Cook in December 2017, according to its website.
Nanchang O-Film reported 2.97 billion yuan in revenue for the previous year, with a net loss of 129 million yuan, according to its annual report.
Also included on the list were Nanjing Synergy Textiles Company and Hefei Bitland Information Technology Company, which has said on its website that its cooperative partners include Google, Haier, HTC and Lenovo.
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More from South China Morning Post:
- Esquel Group, garment supplier to Tommy Hilfiger and Nike, says it’s seeking to overturn US sanction on its Xinjiang plant
- Hong Kong textile firm Esquel to keep its Xinjiang factories open despite US sanctions threat over ‘forced labour’ accusations
- US blacklists 11 more Chinese firms over treatment of Uygurs in Xinjiang
- Chinese investors buying US property face heightened scrutiny amid rising US-China tensions, new US$300,000 fee