Xinjiang's Exports Hits Record High

tendata blogTrade Trends News

ten data blog21-11-2023

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Shipments from China's Xinjiang rose 40% in the first 10 months of the year, surpassing exports for the whole of 2022.

Overseas trade from China's northwestern Xinjiang region jumped 40 percent to a record $409.2 billion in the first 10 months of 2023, the latest local statistics show, calling into question the effectiveness of Western sanctions against the region for alleged abuses against the Uighur minority. 

Shipments from January to October exceeded total trade in 2022, despite penalties imposed by Western governments in response to reports of forced labor and other human rights abuses.

Figures released by Urumqi Customs on Monday showed that $48 billion worth of goods entered and left the region in October alone.

The U.S. and the European Union have also imposed restrictions on private Chinese companies suspected of supporting Russian forces in the war in Ukraine.

The surge in trade is partly due to imports and exports from Central Asia. Kazakhstan, Kyrgyzstan and Tajikistan have the largest share of trade, with mechatronics, clothing and textiles being the most frequently traded commodities.

Trade with these countries, as well as Malaysia and Vietnam, has enabled China to deal with export controls imposed by the West, according to Zheng Guoen, a German expert known for his research on detention camps in Xinjiang. Trade with Malaysia, Belarus and Vietnam has seen the biggest year-on-year increase in the past 10 months.

"Opaque supply chains are now a bigger threat," he said, as it becomes increasingly difficult to trace the origin of products.

Washington passed the Uighur Forced Labor Prevention Act, which goes into effect in June 2022, effectively halting all imports from Xinjiang. U.S. and Customs Border Protection intercepted $2 billion worth of goods, from electronics to clothing to manufacturing materials. The ban is expected to last eight years.

Human rights organizations accuse Beijing of holding some 10 million Uighurs and other Muslim minorities in prison camps, a charge Chinese officials deny.

Despite booming trade in the region, China's overall trade painted a bleaker picture of the country's economic outlook as exports fell for the sixth straight month in October.

The data comes as Chinese officials last month laid out a blueprint for a free-trade zone in Xinjiang in an attempt to turn it into an export gateway to neighboring countries. According to the State Council, the plan will be launched in Kashgar, Khorgos and the region's capital, Urumqi, and it could take up to five years to open the free-trade zone across the region. The Xinjiang Production and Construction Corps, a company subject to U.S. sanctions, will oversee the zone.

The Kashgar Pilot Free Trade Zone opened on Nov. 12, according to official Chinese media reports, with companies focusing on agricultural products, textiles and electronics assembly.

The government hopes the zone will attract foreign investors from neighboring Belt and Road countries and increase the use of the yuan in cross-border trade settlements.

"Foreign direct investment has fallen sharply due to the detention camps," Zengz said. "But given government subsidies, the main attraction of free trade zones is for local companies."

Zheng said the free trade zone would allow Chinese companies to locate in the region and move up the value chain from low-end manufacturing as the government emphasizes "high-quality development."

The free trade zone is "economically and politically incentivized," he said.

The move is seen as a way to connect economies bordering Xinjiang, such as Kazakhstan, Tajikistan, Pakistan, Mongolia and Russia, and to strengthen trade networks across the region, which is a key node of the Belt and Road initiative. Khorgos already offers a 24-hour cargo clearance port, which opened in August.

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