US Cotton Ban Against Xinjiang-Based XPCC Has Strategic Value For India – Analysis


By Ayjaz Wani

In the first week of December, the United States’ Customs and Border Protection (CBP) personnel issued a detention order on cotton products made by Xinjiang Production and Construction Corps (XPCC) for using prison labour. The CBP order contended that the cotton products made by the XPCC used forced labour, including convict labour.

According to the National Bureau of Statistics of China, Xinjiang produced about 85 percent of the country’s total cotton production. The recent ban on cotton products from Xinjiang and XPCC will therefore have a far-reaching impact on the global companies involved in selling cotton clothes to the US as well as on the economy of this quasi-military organisation.

Earlier in July, the US Department of State, US Department of the Treasury, US Department of Commerce, and the US Department of Homeland Security cautioned businesses about their supply chain links in China and especially in the Xinjiang Uyghur Autonomous Region. The US agencies warned that Chinese production processes are steeped in forced labour, human rights abuses and even imposed sanctions on the XPCC and blacklisted a number of Chinese manufacturers.

The recent ban is in line with President-elect Joe Biden’s views, who has often stressed in the past that human rights must be a core component of the US’s engagement with China, especially given the interment of more than a million Uyghur people in Xinjiang. Biden has already pledged to work with the US allies to pressurise Beijing on human rights violations and trade abuses.

XPCC, primarily a quasi-military establishment of China was established in 1954 on the instructions of Chairman Mao Zedong by the CCP. Designed to promote economic development in the restive Xinjiang region, the XPCC was tasked with mass Han settlement to colonise, assimilate and integrate the far west region of China dominated by the Uyghurs. The first settlement of Hans in the region consisted of 103,000 demobilised soldiers. These soldiers were often described as having their “one hand on the gun and one hand on the pickaxe.”

The XPCC went about its task with land reclamation wherever possible, outside the oasis, and away from the Uyghur-dominated farmland areas. However, it continued to remain a paramilitary organisation directly controlled by Beijing. With its 14 divisions, the XPCC has been referred to as a “state within state” which controls a population of 2.43 million within an area of 80,000 square kms.

The XPCC today has 862,600 direct and indirect holdings across 147 countries. Some of the publicly listed divisions of XPCC deal in agriculture, industry and construction, service industry. The organisation also runs schools, colleges, universities, newspapers, television and radio stations for campaigns. With an annual gross output of RMB 274.707 billion in 2019, the XPCC helps in Han settlements and in equipping and overseeing of the re-education camps, where millions of Uyghurs are incarcerated.

After the establishment of Communist rule in Xinjiang, the land under cotton cultivation was increased forcefully from 8 percent before 1949 to 19 percent by 1984 and further to 31 percent by 2001. For this forceful cotton cultivation, Beijing channelled RMB 11.5 billion between 1998 and 2004 through the XPCC and even forced the native Uyghurs to reduce grain cultivation on their fields.

The area under land cultivation was brought down from 71 percent in 1984 to less than 43 percent in 2000. The Uyghur farmers were forced to produce cotton which was procured by the government at low prices. The low prices fixed by government have led to clashes and even revolts by the Uyghurs.

As the geostrategic and geo-economic importance of the restive Xinjiang province increased, President Xi Jinping in 2017 called for a “great wall of iron” to secure the BRI and safeguard Xinjiang. Following the announcement, more than 1.5 million Uyghurs — and Kazaks, Kyrgyz and Uzbeks living in Xinjiang — were sent to “re-education camps” and forced to pledge loyalty to the CCP, learn Mandarin, and denounce Islam and their culture. The XPCC’s role was to run and monitor these re-education camps, and to force the interned natives to work in the cotton cultivation and garment factories owned by it.

From its inception, the XPCC has also performed several geo-strategic and geopolitical roles for Beijing. To facilitate the Chinese control over Xinjiang, the XPCC constructed roads and railway lines to connect Xinjiang with inner parts of China aimed at controlling the external influences from former Soviet Union countries in Central Asia.

The XPCC and the Han settlers constructed Xinjiang-Xizang highway — a major engineering achievement, crossing terrain of over 4,000 metres above the sea level. The highway was completed in the first five-year plan and by 1958, it stretched over 6,000 miles. The XPCC has also exploited the natural resources of Xinjiang and played a crucial part in implanting millions of Hans in colonies all over the volatile province. The organisation also played secretive roles for the CCP and has been a dominant factor in the politics and economy of the Xinjiang.

The organisation also has stakes in the much-hyped, controversial and sensitive China Pakistan Economic Corridor (CPEC) through its workers, finances and other ventures. It plays a leading role in providing infrastructure facilities and other important arrangements to the People’s Liberation Army at Line of Actual Control (LAC) through its 14 divisions.

As the PLA is trying for intrusion on LAC, facing Indian armed forces especially in Eastern Ladakh, US’ ban on the XPCC should be taken as blessing in disguise. New Delhi must use the opportunity to strengthen its partnership with the US, which in recent years, has made rapid progress through the annual 2+2 dialogue between the two democracies.

With the President-elect being vocal in his criticism of China and especially the XPCC, the coming months for the XPCC under the new Biden administration will be tougher. India could well use the ban on XPCC to not only find more convergence with US, but to make the CCP bleed economically in Xinjiang. With the restive province already under global watch from western democracies on the issues of human rights and forced labour, making Beijing preoccupied with its internal affairs can give India a strategic edge on LAC as well as on the CPEC, the flagship project of Xi’s pet BRI scheme. Sanctions on the XPCC in July this year have already forced China to halt CPEC projects.

Observer Research Foundation

ORF was established on 5 September 1990 as a private, not for profit, ’think tank’ to influence public policy formulation. The Foundation brought together, for the first time, leading Indian economists and policymakers to present An Agenda for Economic Reforms in India. The idea was to help develop a consensus in favour of economic reforms.

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