China's Xinjiang forced labor law impacting trade flows

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China's Xinjiang forced labor law impacting trade flows

A law targeting forced labor in China's Xinjiang region is having a major impact on trade flows as a result of the piling up of solar equipment at the US border, an indication that the passage of a law targeting forced labor is having a major impact on trade flows.

Since June, modules with capacity of more than three gigawatts have been held by US customs, according to a note by Roth Capital analysts, including Philip Shen. The US Uyghur Forced Labor Prevention Act went into effect the same month.

By the end of the year, nine to 12 gigawatts of modules could be detained, and many top Chinese manufacturers have stopped exporting to the US, according to Roth Capital.

See also: US crackdown on Chinese Solar Means Sales Recovery Ruled OutSolar Means Sales Recovery Ruled Out

It is likely that Washington will have to push for expansion of renewable power capacity after the passage of a historic climate bill last week. The US is the second largest solar market, but is heavily dependent on imports. China, by far the largest market, dominates the global supply chain, with Xinjiang being a key region.

Beijing has denied numerous allegations of forced labor in the area that is home to the largely Muslim Uyghur minority.

Before the act went into effect, Washington s actions had made it harder to import Chinese solar equipment. The Energy Information Administration said last week that less than half of the planned solar power capacity additions in the US were installed in the first six months of 2022 due to delays caused by supply-chain constraints.

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