Solar panels Photo: VCG
Chinese suppliers to the new energy sector, ranging from polysilicon upstream to solar panels downstream, are poised to further divert their markets from the U.S. in response to the Biden administration’s import ban, issued Tuesday, which aimed at all goods related to Xinjiang target alleged “forced labor” claims.
The recent US ban has been called a “bad” move by Chinese firms and experts, aimed at ousting a significant portion of Chinese products from the global supply chain. But for the pillar industries in northwest China’s Xinjiang Uygur Autonomous Region and beyond, companies said they have become immune to US sanctions as they domestically develop full supply chains and booming domestic demand for green energy amid the country’s carbon reduction targets Have accepted.
Several Xinjiang-based companies have expressed deep anger at US sanctions on local supply chains over the hyped allegation, but also shrugged off the impact on their businesses, they told the Global Times over the weekend.
A person from Xinjiang Nonferrous Metal Industry (Group) Co, a local state-owned maker of new energy materials such as polysilicon for solar panels, said the allegation of “forced labor” was such nonsense that it didn’t even deserve a response.
“We have had very good and standardized management for decades, and there is no such thing as they claim,” the person said, noting that Western media are trying to “dirt” Xinjiang to protect the advanced resources and supply chain in Xinjiang of the region from playing a competitive role.
Amid the US import ban on Tuesday, the company made headlines in the New York Times when it claimed it was allegedly involved in the use of “forced labor,” which the company vehemently denied.
“It’s the US using its own dark history of slavery to incite false stories against others,” he said.
The person said that all workers, whether they belong to minorities or not, are treated equally in all aspects such as living and working conditions and pay. “Our businesses are in China and these sanctions are not our concern,” the person said.
Other companies are also unconcerned about the impact of the ban as the US is no longer their main market, sources said.
A manager of a Xinjiang-based upstream company in the solar panel industry chain told the Global Times on Sunday, on condition of anonymity, that its US-related customers are no longer taking orders over concerns of being targeted by the US government would give up simply because his company is based in Xinjiang.
But the company is also adapting to the change by pivoting to the booming domestic market, away from countries like the US and Japan, which used to account for up to 60 percent of the company’s total business.
“Because of China’s commitment to carbon reduction, which unlocks huge potential domestically, the domestic market is now our main focus,” the executive said, noting the small impact the new US move could have on his business.
While the ban’s impact on Chinese industrial players is limited, its impact on the US – a big consumer of fossil fuels – is big as it struggles to switch to green energy, industry insiders said.
Solar power generation will account for 14 percent of the entire US electric power sector in 2035 and 20 percent in 2050, assuming there are no changes in laws and regulations, the US Energy Information Administration predicts in the Annual Energy Outlook 2021 published in November 2021.
But the US will have a hard time expanding its own solar industry unless it brings Chinese companies or goods to market, since China produces over 99 percent of the world’s silicon wafers and half of the country’s and world’s industry is silicon and polysilicon are produced in Xinjiang, Xu Aihua, vice president of the Silicon Industry Branch of the China Nonferrous Metals Industry Association, told the Global Times on Sunday.
The ban will also hit batteries for NEVs in the US, as almost all of the main batteries in this sector come from China, with Xinjiang accounting for the largest share.
According to Benchmark Mineral Intelligence, a battery raw materials consultancy, China produces nearly two-thirds of the world’s lithium-ion batteries, while the US accounts for just 5 percent.
Some Biden administration officials have also opposed a blanket ban on imports of all Chinese goods linked to Xinjiang, saying the move would undermine the US economy and the clean energy transition, the New York Times reported Tuesday.