First Intel and then Walmart got caught in the Xinyang trap. The trap is really a power struggle between America, its companies, and China. Xinjiang and its slave labor force are just the lever. China has spent a generation locking in American businesses, educational and cultural institutions, tempting them with the vastness of its markets, while making it clear that their job is to jump and then ask, “how high”.
The Xinjiang bill, formally the Uyghur Forced Labor Prevention Act, changed the equation by forcing U.S. companies to effectively cut the region out of their supply chain. China responded by pressuring the companies with threats that they’ll lose access to Chinese markets if they comply.
The Uyghur Forced Labor Prevention Act gives American companies few options. They can apologize to China, but they still have to follow U.S. law. The PRC likely understands that and is gambling that Corporate America will spend enough time lobbying and buying off U.S. politicians to get it changed. China’s gambit has been its wolf warrior diplomacy. Being tougher than Washington D.C. politicians isn’t hard, but the passage and signing of the Uyghur Forced Labor Prevention Act makes a stepdown much harder to achieve.
China is betting that it can use our companies to control our government. And that’s worked pretty well thus far. Just ask Hunter Biden. But the PRC may be reaching the limit of what American companies can do to serve its empire.