- Sales of hi-tech US cotton-harvesting machinery to be used in Xinjiang rose by more than 4,000 per cent in April from a year earlier, a Post investigation shows
- John Deere has a heavy presence in the western Chinese region, where dominant entities face US sanctions over alleged human rights abuses
Jacob Fromer in Washington, Cissy Zhou and Finbarr Bermingham
At a Chinese government-owned John Deere showroom in the Xinjiang Uygur autonomous region – the heartland of China’s cotton industry – manager Mr Hu worries that coming US sanctions over human rights abuses will cut him off from the “impeccable, super-efficient” cotton-harvesting machines he sells to industrial-scale farms across the region.
Halfway across the world, farm-equipment dealers in the American South describe a jet-setting Chinese buyer who criss-crosses that region with a translator and buys up all the used John Deere cotton-picking machines he can find.
Their stories – combined with extensive investigations of customs data, shipping records and dozens of interviews with cotton-industry employees and experts in both countries – reveal how America’s most iconic farm brand has quietly established itself as a key player in Xinjiang’s immense cotton industry, even as industry and human rights groups warn that the supply chain there is laced with the forced labour of Uygurs and other Muslim ethnic minority groups.
Trade records show that the United States has sold nearly half a billion dollars’ worth of heavy-duty cotton-harvesting equipment to Xinjiang since 2017, helping the region produce one-fifth of the world’s cotton.
“I am not saying the Chinese cotton pickers cannot replace John Deere at all, but Chinese brands have a high error rate and much lower efficiency; they cannot compete with John Deere,” Hu said.
Most of the machines were delivered this past spring, adding to a spike in exports from the US to Xinjiang over the first half of 2020. This year’s trade has already surpassed the total value of exports in 2019, which was a record year for US shipments of cotton-picking equipment to China.
In April alone, US and Chinese customs data shows a 4,355.7 per cent increase – to US$117.8 million – in shipments of cotton-picking machines, compared with US$2.65 million in April 2019. This past May, China imported a further US$94 million worth of the machines.
Apparel companies have faced huge pressure to divest from supply chains linked to forced labour in Xinjiang. But so far, the firms making and selling the equipment used in Xinjiang’s vast cotton country have flown under the radar.
The spike in sales came as US lawmakers were readying landmark legislation to require investigations into human rights abuses in Xinjiang, and continued after that law was passed, an exclusive analysis of customs data shows.
Detailed customs data from the first seven months of the year – provided by Datamyne – shows that 19 of a total of 25 shipments of cotton-picking machinery from the US to China contained John Deere harvesters, with the remaining six containing miscellaneous spare machinery parts.
Corresponding Chinese customs data shows that the vast majority of this cargo wound up in Xinjiang.
Hu’s outlet is one of the dozens of John Deere dealerships dotted around the Xinjiang region, selling the American-made equipment.
CNH Industrial – the parent company of Case IH, another well-known American farm brand – also runs a 10,000 sq m (107,639 sq ft) cotton-picking-machine factory in Xinjiang.
The sales of American equipment help power the giant farming operations of the Xinjiang Production and Construction Corps (XPCC), which operates one-third of the cotton farms in the region, and which owns the showroom that Hu works for.
I don’t think companies – some brand names here in America – want to be connected to what’s taking place [in Xinjiang]US Secretary of State Mike Pompeo
The XPCC – also known as the Bingtuan – was established in the 1950s, drawing mostly from decommissioned military personnel, and developed into a quasi-governmental entity controlled by China’s central government. The XPCC has played a key role in developing agriculture and infrastructure in the sparsely populated far northwest region.
Now, the XPCC is the latest entity in the crosshairs of US lawmakers, hungry to take action on China’s alleged human rights violations in Xinjiang. The opaque organisation’s dominance makes it impossible to participate in Xinjiang’s labyrinthine cotton industry without engaging with it in some way, experts say.
“It is not just in the fields, XPCC controls the irrigation and power systems too,” said Lianchao Han, vice-president at the Citizen Power Initiatives for China, a Washington-based lobby group.
“The irrigation system was built by forced labour, and they are still using forced labour to strengthen this. This is why you can’t separate it: [XPCC] irrigated the entire region. I would argue that everything is tainted for this reason.”
Before and after the cotton is picked, the XPCC oversees other parts of the textile supply chain too: irrigating the fields (a necessity in arid northwestern China); running the cotton through a gin, which separates cotton fibres from their seeds; spinning it into yarn; and sewing it into clothes.
Leaked state documents describe repressive operations at China’s detention camps in Xinjiang
“It is very difficult to be involved in not just cotton, but any kind of agricultural or industrial-scale activities in Xinjiang now” without the XPCC, said Michael Clarke, an associate professor at the Australian National University in Canberra and an expert on the political history of Xinjiang.
“This is not just any other state-linked organisation in China.”
On Monday, Ministry of Foreign Affairs spokesman Wang Wenbin said that US allegations regarding Xinjiang were nothing but “rumour-mongering and mudslinging”.
“The XPCC has made important contributions to promoting Xinjiang’s development, ethnic unity, social stability and border security – living in harmony with all ethnic groups as a friendly and supportive companion,” Wang said.
The dominant XPCC has jurisdiction over seven cities in Xinjiang, including Beitun and Shihezi, where there are multiple John Deere dealerships.
One cotton farmer in Shihezi named Qiao said he was trying to buy a second-hand John Deere cotton picker to use in the city’s plentiful cotton fields. He and all the farmers around him are using John Deere – “because it is highly efficient and usually works well”.
After harvesting, he said, he sells his cotton to a company affiliated with the XPCC.
Jernigan Global, which publishes a weekly report considered the cotton industry bible, called the sanctions “a major move into the heart of Xinjiang cotton”.
“We’ve told US businesses to take a real, deep look into their supply chains,” Secretary of State Mike Pompeo said after the sanctions were announced. “I don’t think companies – some brand names here in America – want to be connected to what’s taking place there.”
Asked if the firm would stop trading with XPCC, John Deere spokeswoman Jen Hartmann said: “John Deere has conducted business in China for more than 40 years, providing equipment solutions to increase agricultural output, improve food security, and support rural development. We take compliance seriously and monitor sanction developments closely.”
What are we supposed to do, DNA test the cotton? Give me a break
Chinese cotton industry source
Wang said that sanctions against the XPCC were a “gross interference in China’s internal affairs, and a grave violation of basic norms governing international relations”.
One senior executive at a textile company named on the entity list, speaking anonymously due to the sensitivity of the issue, told the Post that the US government had set unrealistic standards – given how pervasive Xinjiang cotton and yarn is in the global apparel sector – that would end up “uprooting the whole industry”.
“What are we supposed to do, DNA test the cotton?” said another industry figure. “Give me a break.”
Human rights groups, other industry executives and experts said it is impossible to know which cotton, which yarn, and which textiles coming out of Xinjiang may be linked to forced labour.
“Who’s moving the irrigation pipe? Who’s been hand-hoeing? Who’s doing the hard labour?” said Darren Hudson, a cotton expert at Texas Tech University in Lubbock. “That’s how they’re utilising a lot of that labour. Either that or in processing, in gins. Just hot, heavy, hard labour.”
Typically, auditing firms would go in, inspect and give businesses a verdict on whether their supply chain is linked to any human rights abuses.
But experts said those rules do not apply to Xinjiang: any interaction with the workforce there would almost certainly be conducted under intense government monitoring, and therefore not submittable in an audit, they said.
In March, the Better Cotton Initiative, the world’s largest cotton-supply-chain watchdog – used by brands such as Gap, Nike and Levi Strauss – said it was “suspending its assurance activities” in Xinjiang for the coming cotton season, “based on the recognition that the operating environment prevents credible assurance and licensing from being executed”.
“How would you feel confident that a worker would tell you if they weren’t being paid the minimum wage, if they didn’t want to be there, that they were sent there against their will?” asked Amy Lehr, a former legal adviser to the UN special representative on business and human rights, who studies forced labour in Xinjiang.
“How would you have any confidence that a worker would feel safe telling you that?” said Lehr, who is now director of the Human Rights Initiative at the Centre for Strategic and International Studies in Washington. “That’s the problem.”
Whether John Deere and other companies end up pulling out of Xinjiang may be seen as a test of the cotton industry’s malleability. To date, the firm has shown little public interest in distancing itself from the region.
If they do not budge, it could also become a test of the Trump administration’s willingness to make an example of a brand that has transcended into iconic Americana.
In a sign of John Deere’s prominent place in the American psyche, US President Donald Trump’s campaign website even sells a green hat with yellow lettering – “Make Our Farmers Great Again!”.
In 2018, Trump brought the hat on a visit to Iowa and pointed out that it matches the famous green and yellow John Deere colours. On his own visit to Iowa in 2012, Xi Jinping, now the leader of China, was photographed sitting in a John Deere tractor.
The XPCC boasts that more than 80 per cent of its cotton picking is now mechanised.
Experts said that using a state-of-the-art cotton-picking machine, such as a John Deere CP690, was like going “from DOS to Windows 10.0” in terms of efficiency. Even used, such harvesters sell for hundreds of thousands of US dollars – more than US$750,000 for 2019 models, in some auctions.
A video posted to YouTube last year by Xinhua, the Chinese state news agency, displayed a John Deere CP690 harvesting fields in Xinjiang, calling it “the most advanced cotton-picker in the world”.
An influx of foreign machinery has helped make Xinjiang the undisputed cotton hub of China, and the XPCC its master. Customs records show that, from 2010 to 2019, annual US shipments of cotton-harvesting machinery to China jumped 1,139 per cent.
In that same time frame, Xinjiang went from producing less than half of China’s cotton to producing almost 85 per cent of the national volume last year, Chinese data shows.
John Deere says it does not condone the use of forced labour in any form in its supply chain, directly or indirectly.
“When these machines are in the field, there is no need for harvesting by hand,” said Hartmann, the John Deere spokeswoman. “Farm mechanisation is a key to improving the livelihoods of both the farmers and the rural communities.”
But numerous experts say that the industrial upgrade does not equate to a reduction in forced labour.
“Mechanisation is not a silver bullet,” said Allison Gill, the senior cotton campaign coordinator at the International Labour Rights Forum. “It’s not that they’re just going to free the Uygurs. They’re going to move them to the factories. If the demand in the fields is less, then they’ll move them farther downstream.”
Johnson Chin-yin Yeung, urgent appeals coordinator at the Clean Clothes Campaign in Hong Kong, added that the evolution of forced labour in Xinjiang has seen Uygurs forced to spin yarn or make garments.
“Some Uygurs are being forced to work in their own homes. Children are sent to ‘day care centres’, and the parents are forced to do menial textiles work in their homes,” Yeung said.
One of China’s hi-tech CP690s came by boat from a small town in the US state of Louisiana.
An equipment dealer there – along with others scattered across the American South – described a Chinese buyer who rolled into town looking for a good deal.
“He found me on one of these websites, and he came down and looked at it and bought it,” the Louisianan said. “That’s about all I can tell you about it.”
None of the dealers – who all declined to be identified – said they could remember the Chinese buyer’s name, or where in China he was from. They also said they were unfamiliar with the situation in Xinjiang.
But the dealers recalled that the man came prepared.
The dealer in Louisiana said the Chinese buyer took care of all the shipping paperwork himself. The cargo ultimately left from the Port of Houston, in Texas.
He brought a translator, too. “But he didn’t speak English much better than the other one did,” the dealer said.
“He said I had too thick of a southern accent – he couldn’t understand me real well – so he wrote me a check, we stripped the picker down, and two weeks later the truck pulled up here and hauled it to Houston.”
Another merchant in Tennessee said Chinese cotton-equipment buyers have been coming to the American South for the better part of the last decade.
“They’re buying the most cost-efficient machines, late-model used machines,” he said. “They probably copy the technology.”
In Xinjiang, an employee at another state-run John Deere showroom said all of the cotton-picking machines they sell were imported from the US.
When asked whether there were any concerns about their supply – amid the coronavirus pandemic, a trade war with the US, and now sanctions – he would say only that the showroom had already stockpiled enough this year to last them for a while.