More retail brands caught up in Xinjiang labor row
Print Edition
MORE foreign retail brands were criticized on the Chinese social media yesterday after fashion brand H&M sparked online fury with its concern over alleged “forced labor” in Xinjiang.
Chinese state media criticized H&M on Wednesday for a statement that was reported by media last year in which the Swedish retailer said it was concerned by reports of the so-called “forced labor” in Xinjiang, and that it did not source products from the Chinese region.
Internet users yesterday found more previously issued similar statements on Xinjiang by foreign retailers.
Brands targeted included Nike Inc, which in a statement said it was “concerned” about forced labor accusations, as did German sportswear firm adidas.
Netizens also targeted the Better Cotton Initiative, a Switzerland-based non-profit organization that promotes sustainable cotton production. BCI said in October it was suspending its approval of cotton sourced from Xinjiang for the 2020-21 season, citing concerns over human rights.
BCI members include Nike, adidas, H&M and Japan’s Fast Retailing, owner of Uniqlo.
Some Internet users said they would stop buying Nike and will support local brands such as Li Ning and Anta, while others told adidas to leave China.
Shares in adidas, which said earlier this month that China is set to be its fastest-growth market, were down 4.5 percent in early trade, making it the biggest loser on the German blue chip index DAX. H&M fell as much as 2.2 percent and Zara-owner Inditex lost 1.6 percent. Nike shares also dropped on Wednesday.
Meanwhile, shares of Anta Sports Products Ltd jumped over 6 percent in Hong Kong yesterday after issuing a statement saying it is withdrawing from BCI and will continue to use cotton from Xinjiang. Li Ning Co’s shares rose by over 11 percent in intra-day trading.
On the A-share market, textile and clothing companies including Ribo Fashion Group, Shanghai Metersbonwe Fashion & Accessories Co, Xingye Leather Technology and Yingfeng Technology all surged by the 10 percent daily cap.
“This is not the behavior of a single brand, but of BCI, which has a greater economic interest behind its control of pricing and standards in the cotton supply chain,” Ma Gang, a garment industry analyst, told the 21st Century Business Herald.
Banning Xinjiang cotton is essentially repelling China’s textile supply chain, Ma said. China produces about 22 percent of the world’s cotton, while 80 percent of China’s cotton is from Xinjiang.
H&M goes off locator maps
In response to the furore, H&M said on Wednesday it “respects Chinese consumers and that it is committed to long-term investment and development in China.”
But by early yesterday, H&M did not exist on some Chinese store locator maps. Searches for H&M stores on China’s two major navigation service providers AMAP and Baidu Map yielded no results. The Swedish clothing retailer’s official store on Alibaba’s Tmall, an e-commerce platform, was inaccessible.
H&M had 520 stores and US$1.4 billion in sales in China in 2019, the last year for which annual figures have been reported. China is its third-largest market after Germany and the United States.
Dozens of Chinese celebrities announced they were breaking endorsement contracts with the named brands.
Chinese foreign ministry spokeswoman Hua Chunying, when asked about H&M, held up a photograph of black Americans picking cotton.
“This was in the US when black slaves were forced to pick cotton in the fields,” she said.
Hua then held up a second photograph of cotton fields in Xinjiang. “More than 40 percent of cotton in Xinjiang is harvested by machinery, so the alleged forced labor is non-existent.”
She said China’s public opinion shall not be trampled. “Chinese people will not allow some foreigners to eat China’s rice while smashing its bowls.”
“The Chinese government always welcomes and supports the normal business operations of transnational corporations in China and their efforts to build industrial and supply chains,” Ministry of Commerce spokesperson Gao Feng said yesterday.
“We welcome foreign companies to come and visit Xinjiang themselves, and stand ready to provide support for companies from all countries to trade and invest in Xinjiang,” he added.
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