Western brands tested by China in reaction to forced labor allegation

Western brands tested by China in reaction to forced labor allegation

After sharing a photo of herself on social media wearing a colorful shirt from Swedish clothing giant H&M, Beijing resident Li Ang’ang received a torrent of comments prompting her to delete the post and stop supporting foreign powers seeking to “destroy China”. “

Ignoring the criticism, Li, 33, said she would continue to share fashion items she loved from Western brands, “as long as they are pretty and very profitable.”

But other Chinese consumers, social media influencers and celebrities have decided to boycott fashion retailers such as H&M, Nike and Burberry as Beijing pushes back with increasing ferocity against allegations of human rights violations and of forced labor targeting the Uyghur Muslim minority in Xinjiang. 20 percent of world cotton supplies.

The backlash from the boycott left Western businesses in an awkward position.

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With 1.4 billion people, China, home to the world’s second-largest economy, has vast purchasing power, making it a lucrative market for retailers.

But socially conscious young buyers in Western countries have also sought brands to take a stand on ethical issues related to their products, from climate change to working conditions.

“Huge dilemma”

As the United States and its allies pressure China through sanctions, deeming the treatment of Uyghurs as “genocide” – claims Beijing denied – many brands have expressed concern over the reports. forced labor.

Some have even joined the Better Cotton Initiative, a global business group of over 2,000 members seeking to promote best practices in the industry. But their commitment has been tested as Chinese consumers, inflamed by the ruling Communist Party, appear determined to punish those who have taken a stand on Xinjiang.

“It’s a pretty awkward position. Businesses have flocked to China over the past 25 years with one goal in mind: to make money,” said economist and author George Magnus. Now they are faced with a “huge dilemma”.

At the center of the storm – fueled by state media and officials after a year-long statement on the matter resurfaced on Chinese social media – H&M has vowed to regain support from Chinese consumers.

“China is a very important market for us, and our long-term commitment to the country remains strong,” the company said in a statement after the backlash last month. “We are committed to winning back the trust of our customers, colleagues and business partners in China.”

The company also said it wants to be a “responsible buyer” in China and elsewhere and “is actively working on the next steps in materials sourcing.” He did not specify what those steps would be.

H&M declined to comment.

“I don’t think a company should politicize its economic behavior,” Xu Guixiang, a spokesperson for the Xinjiang government, said at a press conference last month. He compared the efforts of some brands to distance themselves from cotton produced in the region to “lift a stone and let it fall on its own feet.”

German fashion giant Hugo Boss has also struggled to appease both markets.

The company said in September that it had asked its direct suppliers around the world to prove that their products did not come from Xinjiang, saying it “does not tolerate forced labor.”

Facing similar calls for a boycott, however, the company said in a statement posted on its official account on Chinese social media platform Weibo last month that it would “continue to buy and support cotton from Xinjiang. Which she said was among the “best in the world.”

The message has been deleted.

Responding to a request for comment, Hugo Boss – who in recent years has apologized for the use of forced labor in his factories that made uniforms for Nazi soldiers during World War II – said that Weibo’s post did not was not authorized and did not reflect his position.

“We value our long-standing relationships with many partners in various locations in China,” the company said in its latest statement on its website. “So far, Hugo Boss has not purchased any merchandise originating in the Xinjiang region from direct suppliers.”

People walk past a Hugo Boss store in Beijing on March 27.Thomas Peter / Reuters

Muji of Japan appeared to assert his openness to the use of Xinjiang cotton in an online statement this month, but he said he was “taking all necessary measures to respect human rights and manage the Labour Standards”. After the Chinese subsidiary of sportswear brand Fila said it would continue to use cotton from Xinjiang and seek to pull out of the Better Cotton initiative, the company’s headquarters appeared to distance itself.

“FILA Holding’s position on forced labor and raw material sourcing remains the same as communicated during 2020 and 2021,” said Jamie Jeong, a spokesperson for FILA Holdings, referring to a statement by firm that the company “would continue to work with industry trade groups to find global solutions to this complex problem.”

Walk the line

In the weeks following the initial boycott reaction, images on Chinese public television came under censorship that scrambled the logos of Western brands on sneakers and sweaters. Meanwhile, some H&M stores appeared to be disappearing from major Chinese search engines and e-commerce sites, the Associated Press reported.

Since Xinjiang is a key exporter of global cotton supplies, the scale of the problem for businesses is “huge,” presenting a real “test of business integrity,” said Penelope Kyritsis, director of strategic research. at the Worker Rights Consortium in the United States. labor rights monitoring organization based.

“The line is pretty clear,” Kyritsis said. “Consumers don’t want to be complicit in crimes against humanity”.

More than a million Uyghur Muslims are believed to be held in internment camps in the region, where they are forced to study Chinese law, worship the Communist Party, renounce their religion and work in factories, according to human rights groups and first-hand Uyghur testimonies. .

In January, the United States announced it would halt all cotton imports from the Xinjiang region, and in March, the Biden administration imposed sanctions on the Chinese people over allegations of abuse.

Chinese officials have dismissed the allegations. The government maintains that the courses given at what it calls “educational and vocational training centers” will help Uyghurs find future employment and are necessary to combat extremism.

Comparing the situation to apartheid in South Africa, Magnus, the economist, said deliberately ignoring human rights claims could harm brands and China.

“Basically it’s really about values ​​and belief systems,” he said.

And while China may represent a growing market for retailers, socially conscious millennials and Gen Z shoppers in the United States and Europe also represent a “numerically significant” demographic that cannot be ignored, a- he declared.

In 2019, these young Americans outnumbered the baby boomer generation, making up just over half of the American population, according to an analysis by the Brookings Institution think tank.

The choices businesses make today could have long-term ramifications, both in China and in Western countries.

“I think companies have unwittingly found themselves right in the middle of this antagonistic struggle, and there will be a price to pay,” Magnus said, “however they choose to act.”

A farmer picks cotton from a field in Hami, northwest China’s Xinjiang region, October 2018.AFP – Getty Images File

The corporate Catch-22 is also aggravated by the strained relations between Beijing and Washington; some US companies warn Washington’s stance on China could hurt their bottom line.

Boeing chief executive Dave Calhoun recently urged the Biden administration to decouple human rights concerns and trade relations for the airline industry.

“I hope that we can sort of separate intellectual property, human rights and other things from trade and continue to encourage a free trade environment between these two economic engines,” Calhoun said at the meeting. US Chamber of Commerce aviation summit last month.

“We cannot afford to be excluded from this market. Our competitor will go straight into it,” he said.

The State Department and the White House did not respond to requests for comment.

Despite commercial retaliation and online noise, in reality “Chinese brands are still not as powerful as Western brands” among Chinese middle-class buyers, said Rana Mitter, director of the University of Oxford China. Center.

Mitter said boycott calls could boost nationalism and support for the Communist Party, but are likely to inflict less economic damage than expected.

“So far, it is not clear whether the rise in short-term patriotic sentiment necessarily changes consumer behavior in the long term,” he said.

Yang Zhengmeng, 35, a sportswear blogger from Henan, said he would participate in boycotting Western brands on their stance in Xinjiang, even if it means giving up his favorite Nike running shoes.

“For this reason, I will personally have to change coaches,” he said. “Although it affects me a bit, I will always uphold this boycott until the end!”