US bans imports of solar power material from China
The Biden administration on Wednesday ordered a ban on US imports of a key solar panel material from Chinese-based Hoshine Silicon Industry Co over forced labor allegations, two sources briefed on the problem said.
The US Commerce Department separately restricted exports to Hoshine, three other Chinese companies and the paramilitary Xinjiang Production and Construction Corps (XPCC), saying these were involved with the forced labor of Uyghurs and other Muslim minority groups in Xinjiang.
The three others put into the US monetary blacklist include Xinjiang Daqo New Energy Co, a unit of Daqo New Energy Corp; Xinjiang East Hope Nonferrous Metals Co, a subsidiary of Shanghai-based manufacturing giant East Hope Group; and Xinjiang GCL New Energy Material Co, part of GCL New Energy Holdings Ltd.
The Commerce Department said the firms and XPCC "have already been 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. At least a few of the companies listed by the Commerce Department are major manufacturers of monocrystalline silicon and polysilicon that are being used in solar power production.
The firms or their parent organizations did not immediately respond to requests for comment, or cannot immediately be reached. XPCC could not immediately be reached for comment.
China's foreign ministry spokesman Zhao Lijian said on Thursday that China will need "all necessary measures" to safeguard its companies' rights and interests. Beijing has dismissed accusations of genocide and forced labor in Xinjiang as lies. The immediate aftereffect of the restrictions will be limited as the firms named do not have "vast contracts" with US based wafer companies, Dennis Ip, Regional Head of Power, Utilities, Renewables & Environment (PURE) Research at Daiwa said in an email to clients.
"However, we see possibility for the ban to slowly but surely extend to include restrictions on all solar modules that have Xinjiang-produced polysilicon," he said.
Chinese module producers could still use polysilicon from Inner Mongolia and Yunnan for his or her US-bound module shipments, he added. About 45 % of all polysilicon used in solar module production is stated in Xinjiang, with 35 % produced in other areas of China. The remainder comes from outside China. The global solar technology supply chain has been squeezed by record high charges for polysilicon, labour and freight.
The "Withhold Release Order" by US Customs and Border Protection only blocks imports of the material from Hoshine. A source familiar with the order said it generally does not impact the majority of US imports of polysilicon and other silica-based products.
Another source said the move does not conflict with President Joe Biden's climate goals and support for the domestic solar industry.
The Biden administration in March announced a target to cut the expense of solar technology by 60 % within the next 10 years. President Biden has set a goal of a 100 % clean electricity grid by 2035.
The sources said the United States is continuing to investigate allegations of forced labor by Chinese companies who supply polysilicon.
The Xinjiang region makes up about approximately 45 % of the world's solar-grade polysilicon supply, a written report by solar industry analysts found.
The two sources familiar with the policy said the White House sees the actions as a "natural continuation" of the G7 agreement earlier this month to get rid of forced labor from supply chains.
"We view these three actions as putting that commitment into action," among the sources said. "We believe these actions demonstrate a commitment to imposing additional costs on the PRC for engaging in cruel and inhumane forced labor practices."
The XPCC, a paramilitary organization delivered to Xinjiang in the 1950s to build farms and settlements, remains powerful in the region's energy and agriculture sectors, operating almost such as a parallel state.
Foreign governments and human rights activists say it's been a force in the crackdown and surveillance of Uyghurs in the region, running some detention camps. The US Treasury Department last year sanctioned XPCC for "serious rights abuses against ethnic minorities."
