When Washington expanded its forced-labour import blacklist by 43 Chinese firms in August, the reaction across China’s Xinjiang’s cotton belt was notably subdued.
This is despite that the Xinjiang autonomous region accounts for 90% of all cotton produced in China.
One ginning-mill operator in Xinjiang region’s south described the update as unexpected but unlikely to dent the wider sector.
This is in striking contrast to the alarm that gripped the industry back in 2022, when the Uyghur Forced Labour Prevention Act (UFLPA) first came into force and left him holding unsold stock as buyers fled.
Today, he says, processing volumes across spinning, weaving, printing and dyeing have climbed sharply, with utilisation rates reaching 30–40% as firms expand capacity.
The August update marked the blacklist’s largest single expansion yet, a roughly 30% jump, taking the total to 187 entities across various sectors including gold, pharmaceuticals, aluminium, textiles and food.
Among the newly listed names were two prominent Chinese textile players, one of which said its business was domestically focused and would be largely unaffected, while insisting the allegations were baseless.
Beijing’s commerce ministry branded the move economically coercive and factually unfounded, while the national textile association insisted harvesting in the region is now overwhelmingly mechanised, and warned foreign brands against letting politics dictate sourcing decisions.
According to SCMP, academic analysis suggests the law’s real effect has been less an outright trade rupture than a reshaping of compliance and sourcing practices among US apparel buyers.
US Commerce Department figures cited by a University of Delaware trade specialist show China’s share of US cotton-apparel exports by value has fallen to roughly 6% this year, down from around 10% twelve months earlier and over 20% in 2019.
Though further mass relocation of sourcing is considered unlikely, since many Western brands have already trimmed China exposure to minimal levels while retaining it for flexibility and small-batch capability.
On the ground, exporters describe an informal workaround: substituting foreign cotton where traceability documentation is demanded, while continuing to use Xinjiang-grown fibre elsewhere, with paperwork enforcement described as inconsistent.
Analysts at a Shanghai futures house argue Chinese growers have adapted through export diversification and by separating domestic and export-bound production lines, potentially hurting American cotton farmers more than Chinese ones, particularly after Beijing’s retaliatory tariff on US cotton imposed amid last year’s trade tensions.
Not everyone is upbeat, however. A Zhejiang-based factory owner supplying overseas clients says imported alternatives cost considerably more once shipping, customs and compliance documentation are factored in, and complains of lower quality versus Xinjiang cotton, while currency appreciation and clients resistant to price rises have made this his hardest year in over a decade in the trade.
Enforcement remains patchy, according to a global trade analyst, reflecting limited customs resources rather than deliberate leniency, though thousands of shipments worth close to a billion dollars have been seized to date.
Still, exporters worry current measures could be a precursor to far tougher restrictions ahead.
Image courtesy: Advance Denim
