Chinese authorities vowed to take all necessary measures to firmly safeguard the legitimate rights and interests of Chinese companies following the latest U.S. crackdown on solar panel material producers based in Xinjiang, which produces around half of the world's polysilicon. Chinese lawyers and experts encouraged relevant companies and the Chinese government to strongly strike back at the U.S.' unreasonable and baseless accusations after the U.S. has become aware of the benefits of sanctions on Xinjiang's cotton and tomatoes. The fabricated “forced labor” issue in Xinjiang is contrary to reality and the accusation is “the lie of the century,” the Chinese Commerce Ministry and Foreign Ministry said. The U.S. should immediately withdraw the sanctions, or “we will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies and institutions,” said Commerce Ministry Spokesperson Gao Feng.
The U.S. Commerce Department put Hoshine Silicon Industry (Shanshan) Co, and three other Chinese companies – Xinjiang Daqo New Energy Co, Xinjiang East Hope Nonferrous Metals Co and Xinjiang GCL New Energy Material Technology Co, as well as the Xinjiang Production and Construction Corps on an Entity List. Xinjiang Daqo previously showed its automated production lines of polysilicon in its Xinjiang plant, invalidating the claim of “forced labor”. “Considering that the U.S. photovoltaic (PV) market only needs 10% of the world's polysilicon, we don't believe it will create a significant impact on our businesses," Xinjiang Daqo told the Global Times. Xinjiang Daqo last week obtained approval to get registered on the Shanghai tech-heavy STAR market after its parent firm Daqo New Energy's stock tumbled on the New York Stock Exchange (NYSE) partly because of the U.S. accusations.
Xinjiang's polysilicon output is expected to hit 300,000 tons this year, enough to meet solar energy demand of 60 gigawatts (GW). China became the world's largest polysilicon producer in 2020 with an output of 396,000 tons. Its global share climbed to 76% of the world total, up 8.7 percentage points, according to the China Photovoltaic Industry Association. According to German research firm Bernreuter Research, seven of the world's top 10 polysilicon producers are based in China and only one is American.
Guan Jian, Partner at Beijing Globe-Law Law Firm, told the Global Times these private Chinese companies could apply for removal from the U.S. Entity List according to U.S. law. In May, Chinese smartphone maker Xiaomi succeeded in being removed from a U.S. blacklist after winning a lawsuit. China's Anti-Foreign Sanctions Law, which was enacted on June 10, is offering more tools to block sanctions from the U.S. or other countries that may follow the U.S. According to Article 12 of the law, any organization or individual that implements or assists in implementing the U.S. sanctions against China can be sued by Chinese companies and individuals for violating the law and will be required to cease infringement and pay compensation. Anyone involved in pushing for the U.S. sanctions against China will be denied entry to China, have their assets frozen and doing businesses within China restricted. MOFCOM Spokesman Gao Feng said that China could impose sanctions on European individuals or companies if the EU bans Chinese solar panels, the Global Times reports.