UFLPA Violators Using Subsidiaries to Avoid Scrutiny, Report Finds

Chinese companies on the Uyghur Forced Labor Prevention Act Entity List are establishing subsidiaries away from Xinjiang to avoid U.S. scrutiny, risk intelligence firm Kharon said May 20.

Guangxi Hongtai New Materials Co., Ltd., a subsidiary of Xinjiang Joinworld Co., Ltd., was incorporated in January, two months after Joinworld was added to the DHS UFLPA Entity List. Joinworld, an aluminum products manufacturer, established Guangxi Hongtai "to facilitate Joinworld’s investment in a new aluminum development in Guangxi," according to Kharon, but also to create distance from "the U.S. scrutiny" in the Xinjiang region.

The report said that "the swift creation" of Guangxi Hongtai "underscores how listed Chinese conglomerates may adapt rather than retreat under U.S. pressure."