Bangladesh is likely to face supply chain challenges in the Ready Made Garments (RMG) sector, as a new rule takes effect providing US border authorities additional power to block or seize items linked to forced labor in China, the fashion sector has been instructed to wean itself off cotton from China’s Xinjiang region. The Uyghur Forced Labor Prevention Act (UFLPA), which went into effect in June, presumes that any good created in Xinjiang, northwest China, whether partially or entirely, is connected to the region’s labor camps. The new regulation will have a particularly negative impact on the fashion industry. Around 20% of the cotton consumed worldwide is produced in China, and 84% of that production takes place in Xinjiang. Li Jiming, the Chinese ambassador to Bangladesh, warned Bangladesh against believing US “lies” regarding forced labor in Xinjiang, saying that doing so could harm Bangladesh’s RMG industry.
As the United States begins enforcing an import ban on goods from China’s Xinjiang region, where Washington claims Beijing is committing genocide, Li cited Bangladesh Garments Buying Association’s (BGBA) instruction last month cautioning its members to exercise caution while importing fabrics from China for making readymade garments.
Bangladesh, the world’s second-largest exporter of clothing, has recently exported $4 billion worth of clothing every month and is on pace to export $8 billion worth of clothing in the near future. Since the beginning of 2021, Bangladesh has been receiving more work orders as many businesses move their orders from competitors like Vietnam and Indonesia.
Bangladesh still imports a sizable amount of yarn and fabric due to the huge domestic demand for these goods, despite rising domestic cotton production. The nation’s cotton production doubled during the past ten years. In the last four years, the local cotton production increased to approximately 150,000 bales annually. Less than 5% of overall demand is met by locally produced goods. Bangladesh is therefore expanding the number of imports to satisfy the demand for cotton. The Bangladesh Textile Mills Association (BTMA) estimates that Bangladesh’s expanding garment industry needs close to 9 million bales of cotton. Less than 2% of them can be supplied locally, forcing Bangladesh to purchase 8.5 million cotton bales at a cost of around $3 billion.
Bangladesh imports cotton from the US worth close to $1 billion annually, according to textile millers, and this amount is expected to rise with high transportation and environmental costs over the next several years. Additionally, cotton is imported by textile millers from India, Australia, and African nations. As a market and price manipulator, the US is gradually making inroads as a source of cotton for the regional millers. However, the United States is also the nation’s top export market. Therefore, the US has powerful tools of influence to persuade and compel Bangladeshi millers and policymakers to switch to US sources of cotton and eventually decrease imports from China.
The latest spat is part of the ongoing frosty relations between Washington and Beijing. US-China relations are still tight despite a rush of diplomatic engagement during the past year. There were few, if any, significant developments from discussions in Alaska and Tianjin. The latest conference between Chinese President Xi Jinping and U.S. President Joe Biden, while friendlier in tone, only resulted in pledges to undertake additional discussions, albeit on significant matters like strategic stability.
The relationship between the United States and China entered a more combative phase under former president Donald Trump, and Vice President Joe Biden has generally continued that trajectory toward Beijing, albeit with a more conciliatory tone and a commitment to multilateralism. The US-led western portrayal and interpretation of China’s mercantilism, rapid military development, and illiberal approach to human rights have long been causes for the spat between two countries.
Officials in the Chinese leadership seem to believe that the US wants to “suppress” China’s rise. They point to the actions of the Trump administration, the AUKUS submarine treaty signed by Biden, and the growing cooperation of the Quad as proof that Washington wants to constrain China and lessen Beijing’s dominance in the Indo-Pacific. Furthermore, many Chinese academics and professionals believe that US limitations on sensitive technology exports to China are an attempt by the country to stifle China’s developing tech industry. Last but not least, China criticizes American claims about human rights violations in Xinjiang, Hong Kong, and Tibet as meaningless in light of American’s own racial justice and homelessness challenges, as well as its high levels of wealth and income disparity. In essence, China sees the United States as a power in decline trying to stave off an ascendant China.
Despite US accusations on gross human rights violations in the Xinjiang Province of China, citing repression and “genocide”, China has critiqued Western accusations and tried to present the origin of the Western accusations. Two US officials reportedly said that “nothing is wrong in Xinjiang” at a banquet in 2021, according to Global Times. Andrew Chira, a US State Department employee since 2013, and Sheila Carey, the consul at the US Consulate General in Guangzhou, were quoted as claiming that allegations of human rights violations were “useful instruments” to “bring China absolutely under control” and “get the Chinese leadership ensnared.”
Chinese Foreign Ministry spokesperson Zhao played a video clip of Lawrence Wilkerson, a retired US Army Colonel and former chief of staff to US Secretary of State Colin Powell, giving a speech in August 2018 while citing similar statements made by US authorities. According to Wilkerson in the film, creating discontent and collaborating with the Uyghurs to put pressure on China inside rather than externally would be the greatest approach for the CIA to destabilize China.
The US warnings on sourcing of goods from China’s Xinjiang province may be viewed as a pretext of Washington to thwart Chinese exports to markets which are potential to offer opportunity for US businesses. The warnings for cotton purchases from China as a whole can be read as US aim to interfere and dominate Bangladeshi cotton market, using intimidation and diplomatic pressure in the age of hybrid cold war.