Baowu Group Xinjiang Bayi Iron and Steel Co., Ltd.

Steel: leaf springs, casings, ultra-low carbon steel, sheets, strips, wires, bar, pipe, etc for automotive application

Xinjiang Bayi Iron and Steel Co. Ltd. (新疆八一钢铁有限公司) is Baowu Group’s subsidiary in Xinjiang. The Xinjiang subsidiary’s name means August 1, which is a military holiday in China commemorating the founding of the People’s Liberation Army. Xinjiang Bayi was initially established as a state-owned enterprise in 1951 by the then Vice President of the XUAR and the founder of the Xinjiang Production and Construction Corps (XPCC), Wang Zhen, who had claimed the Uyghur Region for the CCP when the Guomindang surrendered the region and is considered an infamous figure by Uyghurs in the region.

With an investment of CNY 3 billion in capital, Baosteel Group took control of the company in 2007. Bayi is publicly listed on the Shanghai stock exchange. It is the region’s largest producer of iron and steel, producing more than 50% of the region’s steel and representing at least 9% of Baowu’s total production.

Bayi’s growth in the 21st century can be attributed at least in part to the expansion of the auto industry in the XUAR. Bayi expected the auto industry to contribute CNY 8 billion to the company’s coffers annually as of 2012, and, with recent developments in the industry in the region, the current amount is certainly higher. 

Bayi Steel operates its iron mines in two primary locations in the Uyghur Region: the Yamansu iron ore deposit in Hami and the Mengku deposit in Altay. It reports holding “considerable reserves” elsewhere in the Uyghur Region.[iv] Additionally, it runs coal mines and/or coking facilities in Ürümqi, Fukang, and Ivirgul (Ch: Aiweiergou). It primarily processes the steel in at least three production bases: Bazhou Iron and Steel, Yili Iron and Steel, and Tianshan Iron and Steel. The company also owns a steel casting facility.

Bayi Iron and Steel’s motto is “whatever ore there is in Xinjiang, we will consume it.” One of the ways the company pursues that mission is by acquiring the vast majority of the mines and steel processing facilities across the vast region. In 2020, Baowu’s “strategic task” was to integrate the production capacity of iron and steel across the entire region. The company has spent billions in the last few years to ensure that it owns subsidiaries across the XUAR. In March 2020, Baosteel Group, Xinjiang Bayi Iron & Steel, China Baowu & Hubao Investment jointly invested CNY 1 billion to establish Tianshan Iron and Steel. Tianshan then acquired Xinjiang Yili Iron and Steel Co., through an equity transfer away from the 31 employees who held more than 77% of the shares. In the same month, Tianshan Iron and Steel also announced that the company would acquire Xinxing Cast Pipe Xinjiang Co. in Bazhou for CNY 2 billion. This is a strategy of consolidation that Baowu has implemented across China.

Bayi’s steel products go into building, railways, infrastructure, and aviation projects, and many other products. But Bayi has long been a producer of steel parts for the automotive industry. One of the products Xinjiang Bayi has been producing is ultra-low carbon steel, a centerpiece of Baowu’s net zero carbon campaign. These materials that Baowu is piloting in its Uyghur Region plants are being touted by the company as the future of its low-carbon product lines.

Participation in Repressive Government Programs

The original mission of Bayi Iron and Steel is “cultivating and defending the border and serving the country with steel.” The company is a “‘ballast stone’ of Xinjiang social stability and long-term stability.”[i] As part of that mission, this state-owned enterprise engages in programs that the central and regional governments have determined as the path toward suppressing dissent in the Uyghur Region, programs that have been deemed repressive and even genocidal by scholars.

Between 2014 and 2020, Bayi claims to have engaged in programs through which corporations adopt rural villages for the purpose of social engineering. In one of these efforts, the company created new furniture and metal products factories in a rural area, where minoritized citizens were put to work, with the intention to “increase [villagers’] income and become rich through industrial poverty alleviation.” Bayi celebrated that the villagers now had wages of CNY 9,000 per year/CNY 750 a month (the equivalent of US $111 a month), far below the regional minimum wage of CNY 1,980 a month.[ii] The company declared that the villagers had been lifted out of poverty at those wages. Bayi continued participation in these surveillance and cultural domination programs through 2022, when the company announced that over the last several years it had sent employees into eleven “deeply impoverished” villages to teach night classes in Chinese and farming (the traditional work of the people of those villages) and to model ideal village cadre behaviors.[iii]

In 2022, Bayi claimed to have matched 100% of the company’s minoritized workers with Han employees, totalling 4,581 pairs, claiming that these fictive “relatives” are better than real relatives of the Indigenous people.[iv] Through these programs, corporations like Bayi take part in the state’s programs designed to force Uyghurs to conform to government mandated Han cultural norms and standards in all aspects of their lives.

On the company’s profile page on its official website, Bayi announced that the company saw its own development as tied to “Xinjiang's construction and development and the process of reform and opening up,” to which end the company had participated in the government’s “work deployment program.”[v] Bayi’s participation in the government’s repressive policies continued even after it declared the company’s adopted villages to be free of poverty. In May 2022, Bayi Steel celebrated the company’s achievements of the previous year, stating “As a central enterprise in Xinjiang, Bayi Iron and Steel has fully, completely, and accurately implemented the Party’s strategy for governing Xinjiang in the new era, consciously fulfilled its political, economic, and social responsibilities, resolutely implemented the autonomous region’s poverty alleviation work deployment, and continued to increase fanghuiju and targeted poverty alleviations efforts.”[vi]

Participation in Labor Transfer Program

In addition to engaging in labor transfers of rural villagers in its adopted rural areas, Bayi employs  workers who are assigned to work through the XUAR’s notorious labor transfer programs within its own factories and mines. In 2017, Bayi received “ethnic minority urban and rural surplus laborers from Kashgar and Hotan areas,” as part of a three-year program to transfer 100,000 people from those regions to work in China’s private and state-owned enterprises.[vii] Companies participating in this labor transfer program received subsidies for “helping solve the problem” by “absorbing rural surplus labor.”[viii] State media outlets Xinhua and Xinjiang Daily announced that more than 10,000 so-called “surplus laborers” from Kashgar and Hotan had been “absorbed and resettled” by 26 state-owned enterprises, including Bayi Iron and Steel that year. The companies “carried out intensive education and training including gratitude education and learning of law, national language, "three loves and three evils” education, military training, safety production and other ideological content.”[ix]

Figure X. Original caption states: “The picture shows the transferred employees of Bayi Steel receiving security work training.” Source: Bayi Steel, Online.

Bayi’s subsidiary Xinjiang Yili Iron & Steel illustrates the way Bayi factories embrace the labor transfer programs in times of significant labor need. In early 2020, as COVID-19 was spreading across China and the PRC government had required that people across China to go into a full lockdown, Yili Iron and Steel required workers the Uyghur Region to come into work to ensure that production capacity remained stable. The company reported that nearly 8,000 employees left their homes to return to the factory. According to Bayi’s own publicity, “Some employees even walked for eight hours and more than forty kilometers when the city was shut down and there was no car to hire.” The company housed some of the workers in tents in order to increase production. The result was that these workers produced in ten days what they typically produced in thirty-five.[x] While other workers across China were protected through lockdown protocols, the workers of Yili (likely largely the Indigenous workers, based on images provided by corporate publicity), were treated as disposable, required to walk extraordinary distances, and live in sub-standard housing in order to protect Bayi’s profits.

Figure X. Bayi subsidiary Yili Iron and Steel’s workers during the pandemic, in front of tents set up as accommodation for excess workers deployed for increasing production during the height of the COVID-19 pandemic. Source: Bayi Steel, Online.

As a way to capitalize on vulnerable Indigenous laborers during COVID-19, Bayi set up “satellite factories” in its “adopted” village in Yopurgha to produce medical supplies and bandages. The company also set up cross-stitch and agricultural product cooperatives among villagers to help meet the goals of universal employment in impoverished regions of the southern XUAR. The company also “encouraged” villagers to buy chickens and to transform their family yards into sites of agricultural production.[xi] It is unclear to what extent villagers had a choice as to whether they work in one of these local projects, given the government mandate for all Indigenous people to be employed.

The company’s corporate social responsibility report for 2020 indicated that that company had actively engaged in implementing the Party’s ethnic policy and promoted national unity and country security and reunification of the motherland. It also noted that 364 laborers from poor families in Kashgar, Hotan, and Kezhou have been arranged with employment” by the company.[xii]

At least through 2021, Bayi continued to participate in the XUAR’s “poverty alleviation work deployment.”[xiii] Bayi’s subsidiary Xinxing Casting Pipe, for instance, reported in its 2021 corporate social responsibility report that the company had been involved in transferring 57 people for employment during the course of the year and participated in the fanghuiju surveillance program.[xiv]