The U.S. government announced Thursday it will be adding several Chinese companies to its growing import blacklist. According to sources briefed on the matter, the companies are accused of being involved in China's alleged forced labor practices.
The U.S. Commerce Department barred all imports coming from China-based solar panel material manufacturer Hoshine Silicon Industry Co. It also barred imports from four other Chinese companies, namely Xinjiang Production and Construction Corp., Xinjiang Daqo New Energy Co., Xinjiang East Hope Nonferrous Metals Co. and Xinjiang GCL New Energy Material Co.
The Commerce Department said the companies that are being added to the country's economic blacklist were "implicated in human rights violations and abuses in the implementation of China's campaign of repression, mass arbitrary detention, forced labor and high-technology surveillance against Uyghurs, Kazakhs, and other members of Muslim minority groups in Xinjiang."
Apart from Xinjiang Production and Construction Corp., the other companies on the list are major manufacturers of solar panel components such as monocrystalline silicon and polysilicon.
Sources familiar with the matter said that a "Withhold Release Order" has already been given to the U.S. Customs and Border Protection. Under the order, all imports of material from the companies are to be seized immediately.
According to the regional head of Power, Utilities, Renewables & Environment Research at Daiwa, Dennis Ip, the sanctions will have very limited effects on the companies as they do not have "vast contracts" with U.S. entities.
"However, we see possibility for the ban to gradually extend to include restrictions on all solar modules which contain Xinjiang-produced polysilicon," he said.
Around 45% of all polysilicon used in solar module production is made in Xinjiang. Module producers around China mostly use polysilicon manufactured from Inner Mongolia, Yunnan and Xinjiang. Industry experts said the sanction could force solar module producers who ship their products to the U.S. to shift away from Xinjiang-produced polysilicon.
The companies that have been added to the blacklist have yet to issue a statement. China's embassy reiterated remarks made by Chinese Foreign Ministry representative, Zhao Lijian, who said that accusations of genocide and forced labor are "nothing but rumors" and "downright lies."