How cotton is really made in Xinjiang

This is not a political piece. It’s not my intention to discuss ideology and political philosophy. Nor is it my purpose to argue for either government’s view. The motivation of this article is only to provide an authentic cultural and societal perspective of the story.

As a former global macro investor, one of the greatest lessons I’ve learned was not to just rely on the numbers on the Bloomberg terminal from your New York office or the conclusions from research papers you read from London. The most important part is always the evidences from the local trips you take to Shanghai, Bogota, or Lagos and the meetings you have with people on the ground.

In the past 2–3 years since the China-US trade war started, there have been many mainstream media, think-tank, and publications talking about the Xinjiang issue. Some comments were made by the opinion leaders that I have always respected and even known on a personal level. However, whatever evidence they cited, I have always taken it with a grain of salt. It’s not that I don’t trust their integrity, but I always recall the satellite images the US government presented to the House and Senate about the alleged mass-destruction weapons in Iraq — they all looked very legit and convincing, but it turned out to be rather embarrassing (for the Americans) and tragedic (for the Iraqi civilians).

Throughout 2012–2020, the China office of the Better Cotton Initiative (BCI) had conducted many on-the-ground investigations and 3rd party research in Xinjiang with regards to the labor condition but found no evidence of coerced or forced labor. So it was a surprise to the China office that BCI’s Swiss headquarter recently issued the statement of suspending certificates to Xinjiang cotton based on human rights issues.

To provide a background of the cotton industry in Xinjiang, as I heard from a friend who is a seasoned Chief Financial Officer who has lived in Xinjiang for many years, cotton harvesting used to be a quite tedious and heavy manual job just like tea picking in Hangzhou, where the best Longjing Tea is made, or the vineyard and cellar work in Napa, home of the best premium US wine.

When there was a shortage of local labor, low-income labor from other densely populated provinces would flood in, just like Mexican workers would cross the San Diego border to work in the Californian vineyards. This may not be the ideal work for the typical better-educated and higher-income white people, but others are willing to take the heavy lift in order to raise their families.

Similarly, when there is a lot of cotton to be harvest but not enough labor locally in Xinjiang, governments of other regions would organize surplus labor and mobilize them to Xinjiang to fill the gap. The governments step in here because, in Chinese society, it is the most efficient way to mobilize such a huge crowd.

Therefore, when Adrian Zenz from the Washington D.C.-based Center for Global Policy claims in a report that every year as many as 500,000 labors of minority groups are forced to relocate to Xinjiang for the heavy manual work, he might have misunderstood the motivation of these seasonal workers and the context of the practice.

Another misunderstanding of Mr. Zenz is that manual harvesting was in the 1990s and 2000s. Since 2015, more and more cotton farms have started to adopt machine harvesting and now there are very few manual harvesters.

For example, in the interviews conducted by Southern Weekly, a trusted Chinese media known for its independent stance, Li Chengjun, general manager of Taichang Farm in Xinjiang, mentioned that in 2016 machine harvesting account for 40% of the total harvest, and by 2020 the ratio jumped to 95%. Similarly, Zhang Biao, general manager of Zhongwang Textile in Xinjiang, stated that among the cotton his company sourced, the ratio of machine-harvested grew from 30% to 90% between 2018 and 2020.

More recently, there is a rising trend to use drones and remote sensors to monitor the growing cotton farm and spray defoliant and pesticide. Thanks to the prevalence of harvesting machines and drones, cotton production in Xinjiang was largely unaffected by the COVID-19 pandemic.

Why did the machine harvest rate jump up so rapidly within only 5 years? Significant improvements from both seed selection and manufacturing upgrades were the key factors.

The seeds that yield to higher-positioned and denser fruition that are more machine-friendly tend to be favored by farmers. Meanwhile, even as machine-harvested cotton still has more impurities than hand-harvested machines, textile factories have made enough advancements in their manufacturing technique to make it more cost-effective to use machine-harvested cotton. Based on the calculation of Gao Ruinan, a manager at Haoxing Textile in Xinjiang, the cost of machine harvest is 100 RMB per mu (666.67 square meters), but for manual harvest, the cost could be as high as 800 RMB per mu, plus food and accommodation. With the sheer difference in prices, any reasonable business would prefer machine harvest.

Meanwhile, much of the evidence presented by western media and institutions appear to be originated from a lack of societal and cultural context of the Chinese society and ordinary Chinese people.

For example, the frequently cited report from the Australian Strategy Policy Institute (ASPI) quotes a Xinjiang cotton farm’s recruiting post on Baidu which contains harsh words such as “quasi-military style management” and “high endurance”, and thus makes the conclusion that there is forced and coerced labor. This might be an overreaction to the word “quasi-military” in the Chinese context.

What it actually means is nothing more than living in a 6-people or 8-people bunkbed dorm room with your coworkers, with mandatory lights off at 11pm and wake-up bells at 7am every day. It’s really nothing “military” except for the schedule part. Almost all Chinese university students, and sometimes even high school students too if it is a public boarding school, live under similar rules. With a much higher size and density of population, Chinese universities and schools don’t have the luxury of setting up 2-bed or even single dorm rooms like their counterparts in the US and Europe.

Similarly, “high endurance” has been a societally valued virtue since ancient times. Many famous poems from the Tang and Song Dynasties highly praised “high endurance”, and it shows more of a person’s own characteristic and pursuit than the condition of under external coercion. China has had cities with over 1 million population since Tang Dynasty. For a vast and agricultural-based centralized society, “high endurance” tends to lead to a higher chance of survival and prosperity, so the virtue is largely a result of natural evolution and social selection.

Another evidence used by the ASPI report is a news article that mentioned the in-house mental wellness and psychological counseling services offered in some of the cotton textile factories, whereby the report makes the conclusion that the mentalities and behaviors of the factory workers are under surveillance. Considering many tech companies are also subsidizing their employees for external mental wellness training and psychological counseling, it seems pretty odd to jump to this conclusion from such evidence. With limited external resources in the rural areas in Xinjiang, setting up such in-house services doesn’t really sound that unreasonable. Considering years ago when Foxconn had no such internal services and employees jumped off the buildings for suicide, this is a considerable improvement for better well-being and human rights.

Inspired by the ASPI’s report, a BBC reporter visited a local textile company in Xinjiang hoping for an interview, only turned out to be rejected at the gate. The reporter only got to shoot some footage outside the high factory walls, making it seem like the factory had something to hide. This is another classic misunderstanding of the natural self-protection from the Chinese culture (pardon my over-simplification). For western media, you might get a better chance of such pop-up interviews in more modern and international cities like Shanghai or Shenzhen, but for the deeper inland cities, the ordinary people may tend to be more protective towards foreign media.

Besides, the protectiveness is not only against foreign media. Even my father wasn’t able to get past the front gate security of a middle school in Shanghai, for a meeting with its headmaster to discuss transferring me from my hometown in the northeast. No offense but it’s just how certain Chinese people and organizations do business.

I wonder if the top global brands like Burberry, Nike, and H&M really looked beyond the surface of the claims by western media and institutions of coerced and forced labor in Xinjiang. I wonder if their PR and policy teams have the right cultural and societal context when they read the evidence from these reports, or if they have read it at all. Such seemingly knee-jerk boycott actions are high-stake. It’s not just short-term economic benefit, but also long-term strategic interest as they may lose the whole China market.

Again, I’m not picking a side here, but only trying to make a point to think more critically about this topic and to get more on-the-ground information with the right societal and cultural context and framework.

That’s exactly our motivation for Meho, a platform for everyone to better understand and communicate with China. The world is filled with too much noise around China, and we are here to help you contextualize China, so you won’t miss out on the opportunities brought by the development and growth of China.

VP of Operations & Strategy @ln_strike | ex-Adyen & Templeton Global Macro | Storyteller @wearemeho | Sommelier/Winemaker @996makers

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