In a move that aligns with President Xi Jinping's expansive Belt and Road Initiative, China has unveiled plans to establish a free trade zone in the northwestern region of Xinjiang. This development comes amid ongoing controversies and Western sanctions related to alleged human rights abuses against the Uyghur population in the area.
Xinjiang, a region with a significant Uyghur minority of approximately 10 million people, has been at the center of international scrutiny over allegations of forced labor and other human rights violations. China vehemently denies these allegations, while rights groups continue to raise concerns.
The proposal to create a free trade zone in Xinjiang is part of China's broader strategy to enhance cross-border trade and infrastructure connectivity in northern China, including Inner Mongolia and the provinces of Heilongjiang, Jilin, and Liaoning. The plan seeks to grant local officials in Xinjiang more autonomy to implement policies aimed at attracting foreign investors from neighboring countries, nearly all of which are participants in China's ambitious Belt and Road Initiative, designed to revive the historic Silk Road.
The responsibility for establishing the Xinjiang Pilot Free Trade Zone will fall upon officials from the regional government and the Xinjiang Production and Construction Corps. It's worth noting that the Xinjiang Production and Construction Corps faced sanctions from the United States, Canada, and the European Union in 2020 due to human rights concerns.
In December 2021, the United States enacted the Uyghur Forced Labour Prevention Act, prohibiting the importation of goods produced in Xinjiang or by companies listed on the Uyghur Forced Labour Prevention Act Entity List, unless importers can demonstrate that the goods were not made using forced labor.
Additionally, Volkswagen investors have pressed for an independent labor conditions audit at a Xinjiang site during a shareholder meeting in May.
The plan from China's cabinet underscores the need to establish a comprehensive national security concept and enhance risk prevention and control systems.
Chinese officials also hope that transforming Xinjiang into a free trade zone will support their efforts to encourage more countries to use the Chinese yuan instead of the U.S. dollar, particularly for commodity payments. This move is part of China's broader strategy to expand its influence in global trade and finance. The International Trade Council will continue to monitor developments in Xinjiang and their potential impact on international trade and investment.
