July 20, 2020 / 3:28 PM / 14 days ago

U.S. adds 11 firms to economic blacklist over China's treatment of Uighurs

(This July 20 story corrects spelling of last name to Cheh in paragraph 19.)

By David Shepardson and Diane Bartz

WASHINGTON (Reuters) - The U.S. Commerce Department added to an economic blacklist on Monday 11 Chinese companies it said were implicated in human rights violations regarding China’s treatment of Uighurs in the western Xinjiang region.

The step, which leaves the firms unable to buy components from U.S. companies without U.S. government approval, prompted an accusation of slander from China, which vowed to take measures to protect its companies’ rights.

The Commerce Department said the companies were involved in using forced labor by Uighurs and other Muslim minority groups.

Among them are numerous textile companies and two firms the government said were conducting genetic analyses used to further the repression of Uighurs and other Muslim minorities.

It was the third group of companies and institutions in China added to the U.S. blacklist, after two rounds in which the Trump administration cited 37 entities it said were involved in China’s repression in Xinjiang.

“Beijing actively promotes the reprehensible practice of forced labor and abusive DNA collection and analysis schemes to repress its citizens,” Commerce Secretary Wilbur Ross said in a statement.

In Beijing, a foreign ministry spokesman said the United States was trying to oppress Chinese companies and slander China’s policies in Xinjiang under the pretext of protecting human rights.

“We urge the U.S. to correct its mistakes,” Wang Wenbin told a news conference on Tuesday, adding that China would take all necessary measures to protect its companies’ legitimate rights.

The companies added to the blacklist include Nanchang O-Film Tech, a supplier for Apple’s iPhone that hosted Apple chief executive Tim Cook in December 2017, according to O-Film’s website. It is also a supplier to Amazon.com Inc and Microsoft, according to an April congressional letter.

The U.S. companies did not immediately comment.

The list includes two subsidiaries of Beijing Genomics Institute (BGI), a genomics company with ties to the Chinese government, Senator Marco Rubio said.

‘EGREGIOUS ABUSES’, SENATOR SAYS

He said the additions will “ensure that U.S. technology does not aid the Chinese Communist Party’s crimes against humanity and egregious human rights abuses against Uighurs and other minorities in Xinjiang, including the forced collection of DNA.”

BGI Genomics, the listed unit of BGI, said in a stock market statement that Beijing Liuhe BGI, one of the subsidiaries added, fell under its management. Beijing Liuhe BGI’s 2019 net profit only accounted for less than 1% of its net profit, it added.

It said that it would work to verify the reasons for its subsidiary’s inclusion on the list and actively communicate with the U.S. Commerce Department. It added that it would do its best to eliminate any negative impact.

Also newly on the list are KTK Group Co, which makes more than 2,000 products for high-speed trains, ranging from electronics to seats; and Tanyuan Technology Co, which assembles high thermal, conductive graphite reinforced aluminum composites.

KTK said in a statement it had no investments in the United States and did not rely on U.S. technology. It said its exports to the United States accounted for less than 0.5% of its total 2019 revenue.

Tanyuan Technology said its inclusion on the list would not materially affect its daily operations.

Another blacklisted company is Changji Esquel Textile Co, which Esquel Group launched in 2009. Esquel Group produces clothing for Ralph Lauren, Tommy Hilfiger and Hugo Boss.

In a letter to Ross on Monday, Esquel Chief Executive John Cheh asked for the unit’s removal from the list. “Esquel does not use forced labor, and we never will use forced labor,” Cheh wrote. “We absolutely and categorically oppose forced labor.”

Efforts to contact the other companies in China were unsuccessful.

Also on the banned roster is Hetian Haolin Hair Accessories Co. On May 1, U.S. Customs and Border Protection (CBP) said it was halting imports of the company’s hair products, citing evidence of forced labor.

On July 1, CBP seized in Newark a shipment of almost 13 tons of hair products worth over $800,000 with human hair that it said originated in Xinjiang.

The Commerce Department previously added 20 Chinese public security bureaus and companies including video surveillance firm Hikvision, as well as leaders in facial recognition technology SenseTime Group Ltd and Megvii Technology in connection with China’s treatment of Muslim minorities.

Reporting by David Shepardson and Diane Bartz; Additional reporting by Gabriel Crossley and Roxanne Liu in Beijing, Meg Shen in Hong Kong and Shanghai Newsroom; Editing by Richard Pullin, Clarence Fernandez and Mark Heinrich

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