A worker conducts a check of a solar module at a factory in Xian. China's exports of solar panels rose by 34% in the first half and it is expected to dominate the supply chain for years. Reuters file photo, 5 December 2022.
Vietnamese exporters are seeking to ensure they adhere to the US ban on imported goods from China’s Xinjiang ahead of a visit from US trade officials this week.
Vietnam may be importing, sometimes unwittingly, raw material from Xinjiang – or might find it hard to prove they were not doing so, a close source said.
The US embassy in Hanoi had no comment on the issue and the matter was not on the official list of topics that Tai planned to discuss with the Vietnamese government, according to a media statement.
The US Uyghur Forced Labor Prevention Act, which came into force last June, has already halted more than 1,500 shipments to the United States from all over the world worth about $500 million, according to data from the US customs department.
Washington accuses China of committing genocide against ethnic Uyghurs and other Muslims in Xinjiang, and herding them into camps.
Beijing denies abuses in Xinjiang, but says it had established “vocational training centres” to curb terrorism, separatism and religious radicalism.
Vietnam posted a $116 billion trade surplus with the United States last year, led by shipments of goods such as electronics, clothing and footwear.
The solar panel sector could be particularly at risk, as it greatly relies on polysilicon for solar cells, whose global production is concentrated in Xinjiang.
Alongside other Southeast Asian countries, Vietnam accounts for about 80% of US panel supplies, and Vietnam’s panel exports to the United States were worth $3.4 billion in 2020.
“This is a major concern if the silicon is sourced from the concerned region,” said Kheng Joo Ung, managing director at the Vietnam unit of First Solar, a leading exporter of panels to the United States.
First Solar did not use polysilicon in its panels, but competitors in Vietnam did, he said, without identifying any companies. Some polysilicon is produced in Vietnam, Ung explained.
In addition to First Solar, the top solar panel makers in Vietnam are mostly Chinese companies, according to investment consultancy Dezan Shira.
More Chinese providers of components and supportive services, such as plastic moulding and die casting, planned to invest in Vietnam to supply solar panel makers there, two industry experts said, declining to be named because the information was confidential.
A third trade expert who attended internal meetings with US customs officials in recent weeks said Vietnam had recently been repeatedly mentioned among the countries at highest risk of falling foul of US trade restrictions. The expert declined to be identified due to the sensitivity of the matter.
US officials have cited Vietnam’s positive efforts to comply with the new rules and some have said compliance may be a temporary hiccup.
The Vietnamese government did not immediately respond to a request for a comment.
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