money My letter to Xi Jinping on China's cotton problem
Dear President Xi Jinping,
I’m writing to you respectfully as a citizen of the United States and of the world. In 2016 I wrote a letter to then President Trump and again in November of 2019 where I offered some unsolicited advice. I’d like to do the same to you today. There’s much to sort out right now in the U.S.-China relationship and with your country’s place in the world, too much to go through in one letter. So I’m going to focus on the issue of Chinese cotton, important unto itself, but also connected to everything else.
Before I get to that though I should note you have been the leader of China since 2013 and true to the long game your nation famously plays, you’ve now overlapped with three U.S. presidents; Obama, Trump and Biden. Given that the National People's Congress voted three years ago, 2964-2, to abolish term limits, you will doubtless be seeing more—be they Harris, Pompeo or Hailey, etc.
This presidential longevity confers a tremendous advantage to you, your government and your strategic goals—even beyond simply waiting us out. (Unlike America where if you don’t like the politics, wait four years, it’ll change.) There’s something else though too. The equilibrium between our countries and perceptions are changing fast. “China’s belief is that the U.S. is in inexorable decline and has lost any moral ability to tell the Chinese what to do,” says Ian Bremmer, president of the Eurasia Group. “The Chinese are bigger and stronger and consolidated under Xi Jinping — they wish to be treated as equals.”
Though there have been some shifts perhaps surprising to some the early-days positions taken by President Biden aren’t a clear departure. “I don’t know that it has changed very much from the Trump administration to the Biden administration,” says Kenneth Rogoff, a professor of economics and public policy at Harvard University. “Recognizing China as a strategic adversary and not just a trading partner seems to be one of the few areas of broad consensus in Washington.” That bipartisan unanimity remains. And of course so do you Mr. Xi.
I don’t know what you think about the direction of things right now, Mr. President, but to be perfectly honest, some have questions.
“U.S.-China relations are probably at its worst level since the 1989 Tiananmen Square massacre,” says Bremmer. “There’s no trust between the two countries. There are a lot of areas of proximate strong strategic disagreement and competition, and they’re mostly escalating. Hong Kong, Taiwan, IT and supply chain. The Anchorage meeting was by far the worst meeting that the Biden administration has had since being elected.”
It is the case, there are always hot buttons that help define the U.S.-China relationship. A year after the creation of the People’s Republic of China in 1949, American and Chinese troops fought and killed one another in Korea. Let’s hope we never see that again. Later the friction points were over “the three Ts”: Tiananmen (Square), Tibet and Taiwan. Today as Bremmer notes we have unfair trade practices, hacking and technological hegemony, human rights issues in Hong Kong, climate change—where we made some progress together this past week—and Taiwan (still.) And now, cotton.
If I had told you a few years ago, Mr. President, that cotton would be the latest flashpoint between China and the U.S. (and the rest of the West for that matter), you might not have believed me. But it’s actually been a long time coming.
The issue, to get everyone up to speed, is this: There are allegations Chinese cotton is being picked and processed by forced labor which has led to reprimands and bans by Western companies Nike (NIKE), H&M and others, that have in turn led to retaliations against those companies in the form of boycotts by Chinese consumers and e-commerce platforms. This puts Western companies in a no-win position of either banning Chinese cotton and losing the Chinese market, or accepting Chinese cotton and being pilloried by human rights activists and lawmakers in the West.
Of course you know President Xi, the stakes are massive in terms of money, reputation, business models and of course U.S.-China relations. If left unresolved the cotton and apparel businesses could become bifurcated much like the internet is, with a Western aligned market and a Chinese one. I wonder if you would agree, Mr. President, that a world divided into two camps is a less productive, suboptimal world. As you well know, we already tried that, it was called the Cold War.
Professor Rogoff suggests we aren’t far off from repeating that. “[U.S.-China] is an area that will not be static for the next four years,” he says. “Both sides are going to be groping toward some new equilibrium, some kind of Cold War in a way. Except with much more trade and hopefully a much less destructive version than we had with Russia.”
Let’s hope so.
Rogoff also says this: “A good leader has to recognize that a country can be an enemy in some areas and a friend in others. If you have a black and white view of every country in the world, it’s not going to be successful.” Going back to your time in Iowa, President Xi, I bet you understand that.
Before we get more into the future of Chinese-U.S. relations, let’s drill down into the Chinese cotton situation.
At issue here specifically is cotton grown in the northwestern part of China, in the Xinjiang province. Just north of Tibet, Xinjiang is actually China’s largest province, though not densely populated. Of course you know President Xi, that China now accounts for 20% of cotton produced in the world, and Xinjiang grows 85% of that. It’s a big deal.
Perhaps half of Xinjiang’s population of 25 million are Uyghurs, (or Uighurs, pronounced WEE-grz), a Muslim Turkic people, not ethnic Han Chinese. China and the Uyghurs have been knocking heads increasingly in Xinjiang, which may not be the best way to describe the situation. I wonder how you would describe it, Mr. President. Although, (a first note about sourcing), it’s difficult to know exactly how to characterize the situation, because the area is increasingly sealed off from Westerners, reporters and indeed any outsiders.
Your ministers and spokespeople say they are simply trying to integrate the Uyghurs into your nation. And they point out that there have been a number of terrorist acts committed by Uyghurs. It is even possible, as your people have suggested, that outside agitators are trying to rile up the Uyghurs.
But as you know President Xi, the Uyghurs, along with reporters and international human rights activists, paint a very different, in some cases, horrific picture. There are verified accounts of repression, detention centers, torture, and systematic rape. (Note number two about sourcing. To believe that the latter story, as reported by the BBC, which obviously has high standards and went to great lengths to be fair and to tell the truth, is a complete fabrication, meaning either the BBC is intentionally lying or got completely snookered by a conspiracy of sources, stretches the imagination.)
As you know, treatment of the Uyghurs has been condemned by both President Trump and Republicans (who in this instance were quick to defend the rights of Muslims) and President Biden. It’s also true that we, the U.S., like to act as the world's moral adjudicator. Imagine the uproar, President Xi, if you started calling us out on racial injustice when it comes to people of color or of Native Americans or criticized us over Puerto Rican statehood.
As for how Xinjiang relates to your policies writ large, here’s what James Millward, a professor of Chinese history at Georgetown University and expert in Xinjiang policy, had to say: “It’s about centralization of power and political and cultural homogenization or assimilation. Xi Jinping seems very concerned to make things the same in the name of an identifiable Chinese identity. He’s backed off the one country, two systems in Hong Kong. Likewise in Xinjiang it's not just a security crackdown, it’s an attempt to change things about Uyghurs. The different status of Taiwan is something he also presumably wants to remedy sooner rather than later.”
Let’s return specifically to Xinjiang and Chinese cotton, shall we? Along with the prison camps and worse, global labor watchdogs accuse your government of forcing Uyghurs into working the vast cotton fields of Xinjiang as well as the factories that produce cotton and apparel. It’s a controversy that’s been building over the past several years as an increasing drumbeat of stories was published detailing these abuses.
There was no single moment when Western companies began to either denounce practices in Xinjiang province, or when they stopped doing business there, but by last summer brands like Eileen Fisher and Marks and Spencer committed to stop sourcing cotton from Xinjiang, according to the NGO End Uyghur Forced Labor. Patagonia, for instance, put out a statement last March (did you see that one) saying: “We don’t source any finished goods in Xinjiang, and we are committed to only sourcing from farms and mills where we can confirm there are no human rights abuses.”
Other global brands like Adidas, Lacoste, H&M, Ralph Lauren (RL) and PVH Corp (PVH), which owns Calvin Klein and Tommy Hilfiger had made their displeasure known and had taken various courses of action last year as well.
Then in January the Trump administration announced a ban on cotton and finished products from Xinjiang, which was big news. “The Workers Rights Consortium estimates that American brands and retailers import more than 1.5 billion garments that use Xinjiang materials every year, representing more than $20 billion in retail sales,” according to The New York Times. The Trump administration also characterized the treatment of Uyghurs by the Chinese as "genocide," obviously a high-stakes word, matching a Biden campaign statement from last year.
Before we get to the current, hottest phase of the Chinese cotton conundrum, note number three about sourcing. First from my point of view, and with all due respect President Xi, the Chinese government, which at first denied the existence of detention camps, but later acknowledged them as "re-education camps" (that old phrase) is not necessarily to be trusted about anything here. “China’s official line is that all the atrocities in Xinjiang are completely made up, it’s a vast conspiracy led by anti-China forces. They point to the U.S. but include others, obviously that’s a silly thing to say because it’s patently untrue,” Millward said. “Dozens of independent media organizations around the world are doing their own reporting. Academics, think tanks, many governments in Europe and Asia have looked into this and confirmed what’s going on. If it were a conspiracy led by the U.S., this would be the most remarkable success of us persuasiveness that we’ve seen in decades. It’s clearly not that.”
Still I will acknowledge there may be those with axes to grind in the West. Allow me to take you down this short rabbit hole, Mr. President.
In December the Guardian reported that “More than half a million people from ethnic minority groups in Xinjiang have been coerced into picking cotton, on a scale far greater than previously thought, new research has suggested.” This was according to a report by the The Newlines Institute for Strategy and Policy (formerly the Center for Global Policy), a think tank in Washington D.C. The report was authored by one Adrian Zenze, a German anthropologist, and expert in Christian theology and a senior fellow of the Victims of Communism Memorial Foundation, who told the Wall Street Journal about his work on abuses in Xinjiang. “I feel very clearly led by God to do this.”
As for the Newlines Institute, on its website it says it is funded by Fairfax University of America, (formerly Virginia International University until 2019) a for-profit school in northern Virginia now with 68 students that was reprimanded for plagiarism and admissions policies a few years ago. Founder and president of Fairfax, Dr. Ahmed Alwani, is also founder and president of “its affiliated think tank, the Center for Global Policy [now Newlines.]” Alwani is also “vice president of the International Institute of Islamic Thought (IIIT)," a Virginia-based nonprofit organization that focuses on educational advancement in Muslim societies, a legacy he inherited from his father, who co-founded the institute in the 1980s. [At least two other Fairfax board members, Anas S. Al-Shaikh-Ali and Hisham Altalib have ties to the IIIT.] Alwani has also served as a member of the advisory board of the U.S. military’s Africa Command, according to the Fairfax website. The director of communications at Newlines said The Fairfax Educational Foundation which funds the school and Newlines "is privately held and its donors are not public. I don’t know who they are."
None of which is to say that the more than half-million Uyghurs in forced labor cited by Zenze in his report is inaccurate. And in fact there’s nothing wrong with an anti-communist Christian theologian doing research and reports at that institution, but it is interesting context as I’m sure you would agree. (It’s also worth noting that Muslim countries have for the most part declined to criticize you, President Xi, or China over the Uyghur situation, because, knowledgeable observers speculate, they are concerned about losing Chinese financial and economic aid.)
Back to our cotton story though to get us up to date. Tensions between your representative, President Xi, and U.S. officials ramped up further last month, after the heated discussions in Alaska, and even more when days later, the U.S., along with Canada, the EU and the UK, placed sanctions on top Chinese officials over the Uyghur situation. Shortly thereafter, according to the New York Times, groups and celebrities on Chinese websites like Sina Weibo and those of the Communist Youth League, and the People’s Liberation Army Party began to lash out against H&M, Burberry, Adidas, Converse and Nike even though their statements about the Uyghur situation was months old. There were calls for boycotts and company products were removed from China’s hugely powerful e-commerce platforms like Alibaba Group’s Tmall and JD.com. (I wonder how much you were in the loop on that Mr. President?)
All this now leaves these big brands in that aforementioned lose-lose situation, where it seems they must take sides. Either dial back the denunciations and banning of Xinjiang cotton and run afoul of Western lawmakers and perhaps consumers or stand firm and lose the lucrative Chinese market. (Two large scale Japanese companies, Uniqlo and Muji actually promote the use of Xinjiang cotton. Guess they are informed by their own math and read of the situation.)
“Fashion brands and retailers are in an awkward situation,” says Sheng Lu, an associate professor in fashion and apparel studies at the University of Delaware. “Fashion companies are very serious about the forced labor issue, it’s not something they can tolerate. Second, U.S. companies have to comply with U.S. law. That’s for sure. The tricky situation on the other side is the government of China. This is why because of the nature of this issue, direct government to government dialogue is very important.”
Is there any way to unwind this? It won’t be easy. You, President Xi, and your government are dug in here philosophically and strategically. “When it started all that it didn’t realize the world would see those camps as concentration camps,” says Millward of Georgetown. "They didn’t realize Xinjiang was so connected to the world economy and it would pull on threads of the world economy. Once you’ve launched all that at great expenses it is impossible to back down. These ideas came from the very top."
“The Trump administration did a lot of stupid things and a few good things with regard to Xinjiang,” continues Millward. “The Biden administration has continued those. Targeted measures with regard to Xinjiang need to be continued and will be sharpened. The major difference in Biden’s China policy and that of Trump’s is that Biden’s team brought in the EU, Canada, the UK to join in the sanctions. It’s not just U.S.-China only, it’s really the Western democracies unified. The U.S. approach to make it a broad coalition of countries concerned about this is a very good move.”
So, that’s something that has changed Mr. President.
Looking ahead there’s potentially more trouble. “It’s not just a one-off on Uyghurs,” says Ian Bremmer. “The run up to the Beijing Olympics has the potential to be very problematic. Every company involved in the Olympics will be told by politicians ‘we want you to make statements against China.’ China will say ‘there will be hell to pay if you do.’ It’s an impossible position.”
“Over the long run if China continues to develop its economy, in 10 or 15 years it will be larger than ours by any measure and in three or four decades much larger,” says Rogoff. “We hoped they’d become more open and democratic — that piece of it is not happening and we haven't figured out how to recalibrate.”
Figuring out how to engage with China and specifically how to resolve the situation in Xinjiang will be difficult for the U.S. and the West. We have our work cut for us, but so do you President Xi. Our sad, slow slide back to a bifurcated world shows no signs of abating. President Biden has changed facets of the U.S. relationship with China. I wonder President Xi if you will change too?
Sincerely,
Andy Serwer
This article was featured in a Saturday edition of the Morning Brief on April 24, 2021. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe
Andy Serwer is editor-in-chief of Yahoo Finance. Follow him on Twitter: @serwer
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