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Photo: Chen Mengtong/China News Service via Getty Images

The State Department and five other federal agencies issued an updated advisory on Tuesday warning that businesses with supply chains and investments in the Chinese region of Xinjiang run a "high risk" of violating U.S. laws on forced labor.

Why it matters: The Biden administration is moving aggressively to ensure that American businesses, many of which use supply chains deeply intertwined with the Chinese economy, are not complicit in the genocide of Uyghurs and other Muslim minorities.

Driving the news: The State Department, Treasury Department, Commerce Department, Department of Homeland Security, U.S. Trade Representative and Labor Department are calling on businesses to engage in "heightened due diligence" with respect to four primary categories of dealings in Xinjiang.

  1. Assisting or investing in the development of surveillance tools, including tools related to genetic collection and analysis.
  2. Sourcing labor or goods from Xinjiang or other regions connected to the use of forced labor in Xinjiang.
  3. Supplying U.S.-origin commodities, software and technology to entities involved in surveillance or forced labor.
  4. Aiding in the construction and operation of internment camps or manufacturing facilities that subject minority groups to forced labor.

Zoom in: Elements of at least 20 industries have been identified as using forced labor in Xinjiang, including agriculture, cell phones, cleaning supplies, construction, cotton, electronics, extractives, hair accessories and wigs, food processing factories, footwear, gloves, hospitality services, metallurgical grade silicon, noodles, printing products, renewable energy, stevia, sugar, textiles and toys.

Between the lines: The advisory warns that companies doing business in China are likely to face "obstacles" when attempting to conduct due diligence, including government controls, lack of government and corporate transparency, threats against auditors, and a "police state" atmosphere in Xinjiang.

  • Axios has previously reported on the State Department's concerns that auditors have been "detained, threatened, harassed and subjected to constant surveillance" while tracking supply chains in China.
  • The Chinese government has condemned U.S. efforts to raise awareness of the abuses in Xinjiang as "interference in internal affairs," and has denied all allegations of genocide, forced labor or repression.

What they're saying: "Given the severity and extent of these abuses, including widespread, state-sponsored forced labor and intrusive surveillance taking place amid ongoing genocide and crimes against humanity in Xinjiang, businesses and individuals that do not exit supply chains, ventures, and/or investments connected to Xinjiang could run a high risk of violating U.S. law," the advisory says.

Go deeper: Read the full advisory

Go deeper

Oct 20, 2021 - World

Senators launch probe into U.S. electronics firm's use of Uyghur labor

Placards outside the Chinese embassy in London. Photo: Mark Kerrison/In Pictures via Getty Images

A trio of bipartisan senators sent a letter to Universal Electronics demanding the Nasdaq-listed company provide details on an alleged deal it struck with Chinese authorities to transport hundreds of Uyghur workers from Xinjiang to a plant in southern China.

Why it matters: The U.S. government has warned that businesses with supply chains and investments in Xinjiang, where China is accused of carrying out a genocide against Uyghur and other Muslim minorities, run a "high risk" of violating U.S. laws on forced labor.

Kate Marino, author of Markets
1 hour ago - Economy & Business

Omicron outbreaks were bad for business in January

Data: New York Federal Reserve Bank; Chart: Axios Visuals

Emerging anecdotal evidence shows just how hard the recent rise in COVID-19 cases hit businesses in early January — but that hasn't hurt some business leaders’ longer-term views on their companies' prospects.

Why it matters: Increasingly, the economic recovery has come in fits and starts that move in tandem with new peaks in cases. Look no further than the thousands of cancelled flights and shuttered Broadway theaters in the wake of the Omicron variant's spread over the last few months.

Tina Reed, author of Vitals
2 hours ago - Health

The shifting definition of fully vaccinated

Illustration: Sarah Grillo/Axios

The definition of what it means to be "fully vaccinated" is evolving even as the CDC has remained careful not to officially change it.

Why it matters: CDC officials have been balancing the job of convincing Americans who've already gotten two doses of the importance of boosters with getting many Americans who still need their first doses to get their shots at all.