China Making Supply Chains Less Transparent to Evade UFLPA, Experts Say

The Chinese government is going out of its way to evade forced labor laws by making supply chains less transparent, including by limiting access to corporate information online with "heavy" censorship, Yalkun Uluyol, a researcher at the Forced Labour Lab at Sheffield Hallam University, said at a U.K. Parliament hearing Feb. 6.

And Chinese manufacturers are doing their part by changing their subsidiary names so that they don't reflect the parent company name or the Xinjiang region so that CBP can't identify companies' links to the region. Manufacturers also are changing the "ownership structure" of their Xinjiang-based subsidiaries and deleting news and social media posts showing their activity with labor transfer programs and their complicity in using forced labor, he said.

Meanwhile, the Chinese government is using its anti-espionage law to get information about firms' suppliers and sometimes even customers, Uluyol said. It can use this data to find workers to target for intimidation, which is very important to keep people in the Uyghur region of Xinjiang from talking about their conditions freely "without the fear of punishment," he said.

Audits are no solution, said Chloe Cranston of Anti-slavery International. She said the Chinese government is using intimidation and "more formal tactics" to curtail the work of independent audit firms. Audits or any examination of forced labor are "seriously limited" and audits are "not the solution to prevent or identify forced labor," she said.

In the Uyghur region, forced labor audits are "completely lacking credibility," and any audit occurring in the region "cannot be conducted without surveillance by the Chinese government," Cranston said at the hearing.

Sourcing from Cambodia or Vietnam doesn't solve the problem as the latest CBP statistics show that Vietnam surpassed China for most Uyghur Forced Labor Prevention Act shipments in 2023, Uluyol said. Chinese companies have been shipping their products to other Asian countries and establishing subsidiaries there to "hide their activities in the Uyghur region" and "connection to manufacturers who are complicit in labor transfer programs."

Cranston recommended stronger regulation to prevent forced labor goods from entering into the United Kingdom. One piece of legislation is needed to prevent human rights and environmental violations, and another law is needed to set import controls on goods produced by forced labor, she said. Cranston said that it is becoming "increasingly difficult" for companies to understand their supply chains through "direct engagement" with their suppliers, creating a need for more "desk-based due diligence".

Without those regulations, the U.K. is "set" to be a "dumping ground" for products made with forced labor and a "safe haven" for companies that fail to respect human rights abuses as other areas around the world adopt regulations similar to the UFLPA, Cranston said.