A cotton picking machine works in a field in Manas County, Changji Hui Autonomous Prefecture, northwest China’s Xinjiang region. File photo: Xinhua
Representatives of the international fashion industry have found themselves in an unprecedented situation as they are forced to make a difficult choice between cotton-related products from China’s Xinjiang region, a key global supplier, and elsewhere, following the recent US import ban on all Xinjiang-related goods due to allegations of “forced labor”.
US President Joe Biden’s administration is trying to crack down on cotton from Xinjiang, which has caused major problems for global players in the industry, including those in Asian countries, which are major suppliers to garment companies Americans. It comes at a time when the global supply chain is already facing high raw material costs, logistical hurdles and inflation, industry insiders said.
AI Manun Mridha, joint secretary-general of the Bangladesh-China Chamber of Commerce and Industry (BCCCI), told the Global Times in a recent written interview that Bangladesh is well aware of the US ban and is following the issue of very close.
“We are against any kind of restrictions on business freedom. Ultimately, the business community and their consumer base around the world are suffering badly from this unilateral decision,” Mridha said, noting that the world is still suffering from COVID-19 and the Russian-Ukrainian conflict and the US decision will have a negative impact around the world, including in Bangladesh.
While Bangladesh does not import much cotton from Xinjiang, nearly 60 to 70 percent of the country’s yarn and fabric comes from China, the world’s second largest garment producer, according to the BCCCI.
“It is very difficult to differentiate which yarn or fabric has or has not been made from cotton from China’s Xinjiang region…we are concerned about our supply chain as it is heavily oriented towards China and many of our members are major apparel and textile manufacturers, so this move has put them under tremendous pressure,” Mridha noted.
Mridha said their main markets for clothing products are in Europe and the United States also buys clothing from them.
Recently, the country surpassed the $52 billion mark in exports, with nearly $42 billion coming from apparel and textile exports, according to the BCCCI.
The Uyghur Forced Labor Prevention Act (UFLPA), which went into effect on June 21 after being signed into law by Biden on December 23, 2021, assumes that any product partially or entirely made in Xinjiang is tied to American “forced labor.” . ” and subject to an import ban.
While some global industry representatives have managed to find alternative sources of imports to avoid falling victim to the ban, the industry is still in a difficult position in the face of high inflation and growing pressures. on costs.
In the ninth annual Fashion Industry Benchmarking Study recently released by the US Fashion Industry Association (USFIA), it shows that US fashion companies are embracing a more diverse supply base in response to market disruptions. supply chain and the need to mitigate growing supply risks. But Asia remains the main source of supply for American fashion companies; eight of the top 10 sourcing destinations are in Asia, led by China, Vietnam, Bangladesh and India.
Reducing “exposure to China” is a key driver of U.S. fashion companies’ sourcing diversification strategy, USFIA says, especially with implementation of UFLPA .
The USFIA claimed that a third of respondents say they source less than 10% of their apparel products from China this year, but the association admitted that more than 95% of respondents said they expect what the UFLPA affects their supply.
Compared to finished garments, the supply of textile raw materials to US fashion companies appears to be less diversified.
Asia, particularly China, continues to play a dominant role as a supplier of textiles, especially for fabrics and accessories, supplying 93.8% and 87.5% of respondents’ total imports, respectively, according to the report. ‘USFIA.
Vietnam, another major player in the global fashion supply chain, has also felt the impact of supply chain disruption due to the US ban.
Do Pham Ngoc Tu, vice president and general secretary of the Vietnam Cotton & Spinning Association (VCOSA), told the Global Times that Vietnamese companies will have to wean themselves off raw materials produced in China’s Xinjiang region to ensure access. long term in the market. American market.
Xinjiang produces 20% of the world’s cotton. It is sent to countries in Southeast Asia, woven into a shirt or other garment, and then shipped to the United States – 16% of clothing in the United States contains cotton fiber from Xinjiang, Do noted. Pham Ngoc Tu.
In order to comply with the new US law targeting Chinese products from Xinjiang, Vietnamese manufacturers must prepare documents to demonstrate due diligence in assessing their supply chain, and the manufacturer must substitute materials from Xinjiang, or they must complete the corresponding documents.
Regarding the impact of the cotton ban in Xinjiang, the issue mainly affects garment makers, not spinners in Vietnam, the vice president said.
“But for garment companies, finding new sources to replace Chinese fabrics will prove more difficult,” Do Pham Ngoc Tu said.