Australia’s Reserve Bank, the country’s central bank, has warned that the collapse of Chinese property giant Evergrande Group could cause chaos in China’s financial system.

In its semiannual “Financial Stability Review,” the Reserve Bank of Australia acknowledged that Evergrande Group, the heavily indebted Chinese real estate developer, faced a liquidity crisis, or a lack of cash or assets that can be converted easily to cash.

The reserve bank warned that if Evergrande, China’s second-biggest property developer, collapses, it could trigger broader problems in China’s financial and real estate sectors.

Evergrande is facing one of China’s largest-ever defaults, with billions of dollars in debt. Its businesses interests are vast, from wealth management and the manufacture of electric cars to the ownership of one of the country’s biggest soccer teams — Guangzhou FC.

Chinese authorities last year started to restrict the debts of big real estate companies.

Yun Jiang is the managing editor in the School of Regulation and Global Governance at the Australian National University. 

“The Chinese government does realize that [the] real estate sector is important to the economy, and, on top of that, it is important for the social stability of China because in China a lot of people’s savings, assets are tied up in real estate, more so than in many other countries,” she said.

China is Australia’s biggest trading partner and experts warn of serious implications for Australia should Evergrande default on its massive loans. 

The crisis has already hit the price of Australia’s main export, iron ore, a key ingredient in steelmaking. Analysts warn that China could cut steel production, which would further depress iron ore prices. Commodities have underpinned Australia’s recent prosperity. 

Analysts have also warned that Australia’s stock market, and skittish investors, would easily be unsettled if Evergrande went bust.

However, financial observers hope the Chinese government, which governs the world’s second-largest economy, will try to restructure Evergrande’s debt to prevent its collapse. They have stressed that China’s ability to contain a financial meltdown is about to be severely tested, and its success — or failure — would have global implications.
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Щоб забезпечити своєчасне підвищення пенсій, уряд цього тижня збільшив бюджет Пенсійного фонду на 18,5 млрд грн, заявив очільник уряду Денис Шмигаль
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Congress appears poised to pass a bipartisan, $1 trillion plan that would be the largest federal investment in infrastructure in more than a decade. History shows that investing in infrastructure can transform the United States, changing how Americans move, bolstering economic prosperity, and significantly improving the health and quality of life for many. 

“When the transcontinental railroad was completed in 1869, we changed the way we moved forever, opening up the entire country and from the way humans had moved previously for thousands of years by animal to machine,” Greg DiLoreto, past president of the American Society of Civil Engineers (ASCE), told VOA via email. “[And] I think we all would agree that construction of the interstate highway system changed America in ways that greatly contributed to our economic prosperity.” 

In 1956, President Dwight D. Eisenhower signed the Federal-Aid Highway Act, which authorized the building of 65,000 kilometers (41,000 miles) of interstate highways — the largest American public works program in history at the time. Another earlier transformation occurred in 1936, when Congress passed the Rural Electrification Act, extending electricity into rural areas for the first time.

And the wave of projects that created modern sewage and water systems in urban areas in the late 19th and early 20th centuries left a lasting mark, providing reliable, clean water in cities and extracting pollution from sewage.

“American cities in the late 19th, early 20th century were incredibly unhealthy places,” says Richard White, professor emeritus of American history at Stanford University in California. “High child death rates, repeated epidemics, and much of that was waterborne disease that came from both ineffective sewage and impure water. And infrastructure projects changed that dramatically. Probably it’s been the most effective public health effort ever in the history of the United States.”

Dark consequences 

DiLoreto also names the construction of dams across the western United States, which increased America’s ability to farm and feed the world, as infrastructure successes. But he points out that the projects created problems for migrating fish. In fact, many of the so-called successful infrastructure projects, like interstate highways, had dark consequences. 

“They increased racial stratification in the cities. They were built in such a way that they went through poorer neighborhoods, very often minority neighborhoods, walling them off from the city as a whole,” White says. “They set them apart and set in motion a set of social changes which we suffer from still. So, they hurt poorer areas, minority areas, even if they helped middle-class areas.” 

White, who wrote the book “Railroaded,” about the building of the transcontinental railroads, contends the federal government funded too many railroads into areas without the traffic to sustain them. 

“The railroads took government money and then went bankrupt,” White says. “They were very often utterly corrupt. The money was taken off into the private pockets behind some of the great fortunes in American history, and they never really delivered the economic and social benefits that they promised.” 

And Native Americans ended up paying the price, White adds. 

“Many of these railroads ended up costing Indian peoples huge amounts of land for no particular benefit,” he says. “It’s not like white settlement was particularly successful in the land the Indians lost. So, even though it was intended to raise the standard of living for everybody in the West, it didn’t necessarily do so, and the great cost was paid very often by Indian people.” 

Bold enough?

The stripped-down bipartisan version of President Joe Biden’s American Jobs Plan (AJP) pours money into transportation, utilities — including high-speed internet for rural communities — and pollution cleanup. What the bill does not appear to contain is a single transformative project. 

“From the information I have, funds will be used to help us repair, replace and make our infrastructure more robust to withstand climate change and seismic risks,” DiLoreto says. “One might consider that transformative in the sense that our quality of life and economic prosperity depend on a functioning infrastructure.” 

White views the bill as backward-looking rather than forward-thinking at a time when the United States needs to transform itself to adjust to a changing world, doing things differently in the future than it has in the past. 

“We have our first great infrastructure bill, which is mostly intended to protect things we built in the past, which, I think, in the long run, that’s going to be seen as a failing,” White says. “And again, I’m not saying that you should allow bridges to fall into rivers, or that the roads don’t need repair. But it’s not transformative.” 

There is one potentially sweeping project that could help revolutionize life in the United States. 

“Broadband has had a tremendous impact on our lives,” DiLoreto says. “Without a broadband system, our ability to economically survive COVID would have been difficult.” 

The current bipartisan plan provides $65 billion for broadband infrastructure. 

“If broadband in this bill works as they intend it … and they bring it into poor areas which now lack broadband, that would be a good thing, that could be transformative,” White says. “That could have the same kind of consequences that rural electrification had in terms of education and lightening people’s workload and allowing them to do the kinds of work they otherwise couldn’t do. … But if they simply make it more effective for those who have it already, it’s not going to be transformative.”
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«Ми нормально пройдемо осінньо-зимовий період», – запевнила Стефанішина
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China said on Saturday that it had pressed the United States to eliminate tariffs in talks between the countries’ top trade officials that Washington saw as a test of bilateral engagement between the world’s biggest economies.

The virtual talks between U.S. Trade Representative Katherine Tai and China’s Vice Premier Liu He followed Tai’s announcement on Monday that she would seek “frank” talks and hold China to its commitments under a “Phase 1” trade deal negotiated by former President Donald Trump.

“The Chinese side negotiated over the cancellation of tariffs and sanctions, and clarified its position on China’s economic development model and industrial policies,” China’s Xinhua state news agency said after the talks, held Friday Washington time.

Tai intended to use the call, the second between the two, to test whether bilateral engagement can address U.S. complaints about Beijing’s trade and subsidy practices, a USTR official said.

Resolution through consultation

“Ambassador Tai and Vice Premier Liu reviewed implementation of the U.S.-China Economic and Trade Agreement and agreed that the two sides would consult on certain outstanding issues,” USTR said in a statement.

Xinhua said the two sides “expressed their core concerns and agreed to resolve each other’s reasonable concerns through consultation.”

“Both sides agree to continue communicating with an equal approach and mutual respect, and to create the conditions for the healthy development of economic and trade relations between the two countries and the recovery of the world economy,” it said.

US cites China’s ‘authoritarian’ approach

In a briefing ahead of the call, a senior USTR official said Tai would give Liu an assessment of China’s performance in implementing the Phase 1 deal, including promised purchases of U.S. goods that are falling short of targets.

Asked about the shortfalls, China’s ambassador to the United States, Qin Gang, told China’s Phoenix TV in an interview on Friday that Beijing had always kept its promises in state-to-state relations, the embassy said in a summary released Saturday.

He said Beijing had sincerely and steadily implemented the agreement, despite serious challenges posed by the coronavirus pandemic, including what he called “tangible steps” on intellectual property protections and opening the financial sector.

He faulted Washington for acting at the same time to impose barriers and restrictions on Chinese firms in the United States.

Limits on ‘harmful practices’

Tai would raise concerns about China’s “non-market” economic practices, the U.S. official said.

“We recognize that Beijing is increasingly explicit that it is doubling down on its authoritarian state-centric approach and is resistant to addressing our structural concerns,” the official said, adding that, consequently, Washington would focus on improving U.S. competitiveness, diversifying markets and “limiting the impact of Beijing’s harmful practices.”

The Phase 1 deal in January eased a long-running tariff war between the world’s two largest economies. It focused largely on China’s promise to boost purchases of U.S. farm and manufactured goods, energy and services by $200 billion over two years, along with increased protections for copyright, trademarks and other forms of intellectual property.

The Trump administration envisioned a Phase 2 negotiation to tackle more difficult issues such as subsidies to state enterprises and China’s strategic industrial policies.

The official said Tai’s future engagement with China would depend on “how China responds to tonight’s call” and declined to discuss possible next steps, but added that Tai would not seek Phase 2 negotiations.
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A global deal to ensure big companies pay a minimum tax rate of 15% and make it harder for them to avoid taxation has been agreed upon by 136 countries, the Organization for Economic Cooperation and Development said Friday.

The OECD said four countries — Kenya, Nigeria, Pakistan and Sri Lanka — had not yet joined the agreement, but that the countries behind the accord together accounted for over 90% of the global economy.

Here are the main points of the accord:

Why a global minimum tax?

With budgets strained after the COVID-19 crisis, many governments want more than ever to discourage multinationals from shifting profits — and tax revenues — to low-tax countries regardless of where their sales are made.

Increasingly, income from intangible sources such as drug patents, software and royalties on intellectual property has migrated to these jurisdictions, allowing companies to avoid paying higher taxes in their traditional home countries.

The minimum tax and other provisions aim to end decades of tax competition between governments to attract foreign investment.

How would a deal work?

The global minimum tax rate would apply to overseas profits of multinational firms with 750 million euros ($868 million) in sales globally.

Governments could still set whatever local corporate tax rate they want, but if companies pay lower rates in a particular country, their home governments could “top up” their taxes to the 15% minimum, eliminating the advantage of shifting profits.

A second track of the overhaul would allow countries where revenues are earned to tax 25% of the largest multinationals’ so-called excess profit — defined as profit in excess of 10% of revenue.

What happens next?

Following Friday’s agreement on the technical details, the next step is for finance ministers from the Group of 20 economic powers to formally endorse the deal, paving the way for adoption by G-20 leaders at a summit at the end of this month.

Nonetheless, questions remain about the U.S. position, which hangs in part on a domestic tax reform the Biden administration wants to push through the U.S. Congress.

The agreement calls for countries to bring it into law in 2022 so that it can take effect by 2023, an extremely tight timeframe given that previous international tax deals took years to implement.

Countries that have in recent years created national digital services taxes will have to repeal them.

What will be the economic impact?

The OECD, which has steered the negotiations, estimates the minimum tax will generate $150 billion in additional global tax revenues annually.

Taxing rights on more than $125 billion of profit will be additionally shifted to the countries were they are earned from the low tax countries where they are currently booked.

Economists expect that the deal will encourage multinationals to repatriate capital to their country of headquarters, giving a boost to those economies.

However, various deductions and exceptions baked into the deal are at the same time designed to limit the impact on low tax countries like Ireland, where many U.S. groups base their European operations.
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Running out of time to get its products on store shelves ahead of the holidays, the Basic Fun toy company made an unprecedented decision: It’s leaving one-third of its iconic Tonka Mighty Dump Trucks destined for the U.S. in China.

Why? Given surging prices for shipping containers and clogs in the supply network, transportation costs to get the bulky yellow toy to U.S. soil is now 40% of the retail price, which is roughly $26. That’s dramatically up from 7% a year ago. And it doesn’t even include the cost of getting the product from U.S. ports to retailers.

“We’ve never left product behind in this way,” says Jay Foreman, CEO of Basic Fun. “We really had no choice.”

Toy companies are racing to get their products to retailers as they grapple with a severe supply-network crunch that could mean sparse shelves for the holidays. They’re trying to find containers to ship their goods while searching for alternative ports. Some are flying in some of the toys instead of shipping by boat to ensure delivery before Dec. 25. And in cases like Basic Fun, they are leaving toys behind in China and waiting for costs to come down.

Like all manufacturers, toy companies have been facing supply chain woes since the pandemic started and temporarily closed factories in China in early 2020. Then, U.S. stores temporarily cut back or halted production amid lockdowns. The situation has only worsened since the spring, with companies having a hard time meeting surging demand for all sorts of goods from shoppers re-entering the world.

Manufacturers are wrestling with bottlenecks at factories and key ports like Long Beach, California — and all points in between. Furthermore, labor shortages in the U.S. have made it difficult to get stuff unloaded from ships and onto trucks.

But for toymakers that heavily rely on holiday sales, there’s a lot at stake for the nearly $33 billion U.S. industry. The fourth quarter accounts for 70% of its annual sales. On average, holiday sales account for 20% of the overall retail industry. And 85% of the toys are made in China, estimates Steve Pasierb, CEO of The Toy Association.

The snarls are so severe that some retailers are telling companies they don’t want products if they’re shipped after mid-October. That’s because products that typically took four to six weeks from when they left a factory in China to landing at a U.S. distribution center now take 12 to 16 weeks, says Marc Rosenberg, a toy consultant.

The struggles are happening as the U.S. toy industry enjoyed a nearly 17% increase in sales last year and a 40% increase in the first half of this year as parents looked to entertain their kids at home, according to NPD Group, a market research firm.

But while analysts expect strong growth in 2021, many toy companies said they’ll see their sales reduced because they won’t be able to fulfill orders on hot items, particularly surprise hits. They are also incurring big costs that will force some toy companies to shutter.

Toy executives say they can’t raise prices any more than 10% — even though it won’t completely cover the higher costs — because they’re worried about shopper reaction. Mattel Inc., the nation’s largest toy company, warned this summer it’s raising prices in time for the holiday season to offset higher shipping costs, though it didn’t say by how much.

Costs of containers on ships have increased more than six-fold from last year with some brand executives saying they’ve gone up to $20,000 from roughly $3,000 a year ago. That has forced big retailers like Walmart and Target among others to charter their own ships.

Foreman calculates 1,800 Tonka trucks fit on each 40-foot container. So at $20,000 per container, that’s costing him $11 each. That’s up from an average of $1.75 each in a typical year. He says he’s focusing on shipping smaller items like Mash’ems — soft, squishy, water-filled collectibles — onto containers as he looks to maximize the total dollar value of the container and profit margins. He estimates he can fit $150,000 worth of Mash-ems in a container versus $40,000 worth of Tonka trucks.

Some like MGA Entertainment, the maker of L.O.L dolls, are expediting the flying of its toys because it now costs roughly the same shipping.

Jim Silver, editor-in-chief of TTPM, a toy review site, says big discounters like Target and Walmart should have a healthier supply of toys compared with smaller ones because of their clout. Target says it has been teaming up closely with its vendors and transportation partners to keep stores well-stocked and ready for its customers.

But Melissa McCollum, owner of Learning Express Toys in Birmingham, Alabama, says she’s received only 25% of the holiday toys as of mid-September; typically, that figure is 50%. And The Toy Book, the leading trade magazine serving the toy industry, is promoting a curated list of in-stock products that retailers can get fast from U.S. warehouses.

Many toy companies like Basic Fun and PlayMonster have reduced advertising.

“We would be advertising to empty shelves,” said Tim Kilpin, president of PlayMonster, who says 15% to 20% of its holiday goods are snarled in the supply chain. Koosh, a toy ball made of rubber filaments, was completely sold out in August, and he didn’t think there would be a chance of it being replenished by Christmas, he says. But on Wednesday, Kilpin said he received word that some of the containers including shipments of Koosh are flowing from the West Coast.

The bottlenecks are expected to have lingering consequences. Toymakers are facing pressure from retailers to ship the first flow of holiday 2022 goods in early March instead of late April and the second cycle in June instead of by late July, says Andrew Yanofsky, head of marketing and operations at WowWee.

That will force companies to make decisions about how much to make and reorder without having a full picture of the sales data, he says.

Yanofsky said he placed a big bet initially on Got2Glow Fairy Finder, a light show in a jar that allows children to find virtual fairies, because he knew he wouldn’t be able to replenish the production given the snarls.

“We took a risk on excess material beyond the scope of what we thought we could sell, ” he said.

Even the few toy companies that make goods in the U.S. have struggled because of labor shortages.

John Gessert is CEO and president of American Plastic Toys, based in Walled Lake, Michigan, with another plant in Mississippi. He says the company is missing 35% to 40% of its front-line workers. Now, it’s shifting away its focus on play kitchens that require six workers toward less labor-intensive toys like basketball sets, which require just three workers to put together.

“I have never had such a complicated puzzle to fix,” he said.
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The U.S. economy added just 194,000 jobs in September after forecasters had predicted 500,000 new jobs would be added, according to the Labor Department.

It was the second month of tepid job numbers, as some economists blamed impacts from the delta variant of the COVID-19 virus.

Unemployment fell from 5.2% in August to 4.8% in September, but that only measures people who are actively looking for jobs.

The September jobs report found that those in the labor force who have a job or are looking for one fell from 61.7% to 61.%. Before the pandemic, the labor participation rate was 63.3%.

Job gains in August were revised up from 235,000 to 366,000.

Some sectors, including hospitality, professional business services, retail and transportation and warehousing did see jobs gains last month.

Forecasters had predicted a more robust jobs number in non-farm sectors because of schools reopening, the end of many federal unemployment benefits and an uptick in the number of Americans getting vaccines.

“This is quite a deflating report,” said Nick Bunker, economic research director at job placement site Indeed in an interview with CNBC. “This year has been one of false dawns for the labor market. Demand for workers is strong and millions of people want to return to work, but employment growth has yet to find its footing.”

Some information in this report comes from The Associated Press.

 
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У вересні серед продуктів найбільше подорожчали яйця, на 13,6%
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India’s coal-burning power plants, which supply much of the country’s electricity, are running perilously low on stocks, raising fears of power shortages just as the country’s pandemic-hit economy is on a recovery path.   

The coal shortage is being attributed to surging demand as industries rev up production lines and consumers begin shopping ahead of the main festival season.

India is the second Asian country, after China, facing a crunch in coal supplies.   

The average stock of coal in thermal power plants was about four days on October 3, the Power Ministry said earlier this month.  

“If the coal stocks are not ramped up to the level to which plants need to run, there could be challenges going ahead,” Vivek Jain, director at India Ratings Research, said, “But the problem is, you cannot ramp up output at will.”

Despite efforts to increase use of cleaner energy sources such as solar, wind and water, India’s 135 coal-burning plants remain the backbone of the country’s power sector, supplying nearly two-thirds of its electricity.

Power demand rose by almost 18% in the last two months compared to the same period last year.

However, India had cut back on coal imports in recent months due to slowing demand.  Now a massive surge in international coal prices poses a challenge to stepping up imports while domestic production struggles to keep pace with the country’s needs.

Heavy monsoon rains in September in the country’s coal-mining areas hit both production and delivery of coal, according to the Power Ministry.

The dwindling coal supplies are a dampener in Asia’s third-largest economy where COVID-19 cases have come down dramatically and most curbs have been lifted, allowing most sectors of the economy to reopen. Public transport is operating in cities, markets are buzzing and holiday destinations have seen domestic tourists return in droves.

That had raised hopes of an economic recovery. The World Bank has said that India’s economy will grow by 8.3% in the current financial year after plummeting by more than 7% last year.

Experts say if demand for power continues to rise, India will have to consider ramping up alternative power sources or increasing imports, say experts.

“India could be looking at a huge rise in its import bill unless it turns to increasing power output in its nuclear power plants or increasing production of natural gas. But if these are not ramped up in time, we could face disruptions,” according to Jain.

Power Minister R.K. Singh told The Indian Express newspaper this week that the impact could be felt for months. “I don’t know whether I will be comfortable in the next five-six, four-five months,” he said, “But it’s going to be touch and go.” 
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U.S. remote-control maker Universal Electronics Inc. (UEI) told Reuters it struck a deal with authorities in Xinjiang to transport hundreds of Uyghur workers to its plant in the southern Chinese city of Qinzhou, the first confirmed instance of an American company participating in a transfer program described by some rights groups as forced labor.

The Nasdaq-listed UEI, which has sold its equipment and software to Sony, Samsung, LG, Microsoft and other tech and broadcast companies, has employed at least 400 Uyghur workers from the far-western region of Xinjiang as part of an ongoing worker-transfer agreement, according to the company and local officials in Qinzhou and Xinjiang, government notices and local state media.

Sony Group Corp., Samsung Electronics Co. Ltd., LG Corp. and Microsoft Corp. each say they prohibit the use of forced labor in their supply chains and are taking steps to prevent it.

In at least one instance, Xinjiang authorities paid for a charter flight that delivered the Uyghur workers under police escort from Xinjiang’s Hotan city – where the workers are from – to the UEI plant, according to officials in Qinzhou and Hotan interviewed by Reuters. The transfer is also described in a notice posted on an official Qinzhou police social media account in February 2020 at the time of the transfer.

Responding to Reuters’ questions about the transfer, a UEI spokesperson said the company currently employs 365 Uyghur workers at the Qinzhou plant. It said it treated them the same as other workers in China and said it did not regard any of its employees as forced labor.

The UEI spokesperson said the company covers the cost of the transfer of workers to its Qinzhou plant from a local airport or train station in Guangxi, the region in which Qinzhou is located. She said the company does not know how the workers are trained in Xinjiang or who pays for their transport to Guangxi.

Reuters was unable to interview plant workers and therefore was not able to determine whether they are being compelled to work at UEI. The conditions they face, however, bear hallmarks of standard definitions of forced labor, such as working in isolation, under police guard and with restricted freedom of movement.

UEI’s Uyghur workers are under surveillance by police during their transportation and life at the factory, where they eat and sleep in segregated quarters, according to details in Qinzhou government notices and local state media.

Programs like this have transferred thousands of Uyghur laborers to factories in Xinjiang and elsewhere. Amnesty International, Human Rights Watch and other rights groups, citing leaked Chinese government documents and testimony from detainees who say they were forced into such jobs, say the programs are coercive and part of China’s overall plan to control the majority-Uyghur population in the region.

In response to Reuters’ questions, China’s Ministry of Foreign Affairs did not address employment at UEI, but denied forced labor exists anywhere in the country.

“This so-called ‘forced labor’ is a completely fabricated lie,” the ministry said in a statement. “Xinjiang migrant workers in other parts of China, like all workers, enjoy the right to employment in accordance with the law. The right to sign a labor contract, the right to labor remuneration, the right to rest and vacation, the right to labor safety and health protection, the right to obtain insurance and welfare rights and other legal rights.”

Xinjiang authorities did not respond to requests for comment.

The U.S. Department of State, which has criticized China and several other governments for condoning forced labor, said the United States has found “credible reports of state-sponsored forced labor practices employed by the (Chinese) government in Xinjiang, as well as situations of forced labor involving members of these groups outside Xinjiang.”

A State Department spokesperson declined to comment on UEI but said wittingly benefiting from forced labor in the United States was a crime under the U.S. Trafficking Victims Protection Act.

The UEI spokesperson told Reuters the company does not conduct independent due diligence on where and how its workers are trained in Xinjiang. She said the arrangement is vetted by a third-party agent working with the Xinjiang government, who brokered the deal. She declined to identify that agent. Reuters could not determine if the agent is independent or works for the Xinjiang government.

‘Vocational’ internment camps

China has detained more than 1 million Uyghurs in a system of camps since 2017 as part of what it calls an anti-extremism campaign, according to estimates by researchers and United Nations experts. China describes internment camps in the region as vocational education and training centers and denies accusations of rights abuses.

Organized transfers of Uyghur laborers to other parts of China date back to the early 2000s, according to state media and government notices from the time. The program has expanded since about 2016, Xinjiang officials said in late July, around the time the mass internment program began.

Xinjiang officials told reporters at a Beijing media conference in late July that transfers of workers outside of Xinjiang are common and voluntary. “There are many labor-intensive industries that fit the skills of people in Xinjiang,” said Xu Guixiang, a spokesperson for the provincial government. “They go where the market needs them.”

Government funding

UEI’s operation underscores the role played by agents in supplying companies with Uyghur workers.

The UEI spokesperson confirmed the company entered into an agreement with Xinjiang authorities in 2019 after being approached by the third-party agent. UEI said the same agent hires and pays the workers and that UEI does not sign individual contracts with the workers.

The spokesperson declined to disclose what the Uyghur workers are paid, beyond saying that they receive the same wages as others at the facility, which is “higher than Qinzhou local minimum wage.”

The Economic Daily reported that workers sent in UEI’s February 2020 transfer are expected to make around 3,000 yuan ($465) a month. That compares with the average manufacturing wage in the province of Guangxi of 3,719 yuan, according to China’s national bureau of statistics.

UEI’s Uyghur employees are part of a much bigger system. Two separate labor agents hired by Hotan and Kashgar authorities in Xinjiang told Reuters they had each been set targets of placing as many as 20,000 Uyghurs annually with companies outside the region.

They, and one other agent, showed Reuters copies of three contracts for transfers already completed this year. These included a January contract to transport 1,000 workers to an auto parts factory in Xiaogan, Hubei province. The workers were required to undergo “political screening” prior to transfer.

The three agents told Reuters that separate dormitories, police escorts and payments overseen by third-party agents are routine elements in such transfers.

“Uyghur workers are the most convenient workers for companies,” one of the agents told Reuters. “Everything is managed by the government.”

The Uyghurs of UEI are kept under tight watch all along this labor supply chain.

“Get to work quickly and get rich through hard work using both hands,” one manager employed by Xinjiang authorities told the gathered workers, according to an account published online by the Qinzhou Daily. Accompanying photos show the workers dressed in blue and red uniforms.

The mostly young Uyghur laborers at UEI’s plant sleep in separate dormitories and eat in a segregated canteen under the watch of managers assigned by Xinjiang authorities. Non-Uyghur laborers are not subject to such monitoring. The managers stay with the Uyghur workers throughout their employment, according to state media, local police notices and government officials who spoke to Reuters.

UEI said the canteens were established to provide local Uyghur food and said it allows Xinjiang workers to share dormitories “as they wish.”

The Uyghurs must participate in what are described as “education activities” run by Qinzhou police and judicial authorities within the UEI facility, as part of the agreement between the U.S. firm and local authorities, according to notices on the government website of the Qinzhou district where UEI’s factory is located.

Reuters could not determine what those activities involve.
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