China’s Outrage over Forced Labor Charges Targets H&M, Adidas and Nike

H&M faces a boycott. Tommy Hilfiger, Adidas, Nike, Converse and Calvin Klein have lost their brand ambassadors. Burberry had to give up an online video game partnership.

Western brands are suddenly feeling the wrath of the Chinese consumer, the very same shoppers who have been asking for their products and paying them huge sums of money for years. Encouraged by the ruling Communist Party, Chinese online activists are punishing foreign companies that have joined an appeal to avoid using cotton from China’s Xinjiang region, where authorities are waging a widespread campaign to suppress ethnic minorities.

The sudden fit of anger exposes the vulnerability of foreign companies as tensions between China, the US, and other countries intensify. In particular, lawmakers in the United States, who are increasingly critical of China, have put international companies under pressure to speak out publicly about China’s human rights practices, including in Xinjiang. This makes the companies convenient targets for Chinese officials who aggressively target American officials.

“A lot of western countries and China are pretty black and white on this. There’s not a lot of gray, ”said Trey McArver, co-founder of Trivium China, a consultancy that helps overseas companies sell in China, highlighting the conflicting viewpoints on Beijing’s policy in Xinjiang. “You can’t agree with both, so I don’t think it’s an easy answer.”

China didn’t say that much, but its campaign against these brands came days after the United States and other western countries imposed new sanctions on top Chinese officials earlier this week. These tried to punish Beijing for abuses against the Uyghurs and other minorities that have been well documented by foreign media and right-wing groups. There is also growing evidence that cotton from Xinjiang has been linked to forced labor programs and mass internment of up to a million Uyghurs, Kazakhs and other largely Muslim minorities, according to the US government and rights groups.

It is not clear what the long-term impact this could have on Western companies that depend on China to manufacture or buy. On Thursday, there was still a steady stream of shoppers at several popular H&M and Nike stores in Shanghai and Beijing. Earlier state media-driven print campaigns against companies like Apple, Starbucks and Volkswagen ultimately failed to curb Chinese demand for their products.

Still, their position could become increasingly precarious as Beijing seeks ways to counter the narrative. And it is no stranger to flex your economic muscles for political ends.

Years earlier, after South Korea implemented an American anti-missile defense system, the Chinese government fed anti-South Korean sentiment in the country, ultimately forcing Lotte Mart, a popular South Korean supermarket, to close many of its stores. The missile system remained in place, but Beijing was still able to cause pain.

Such tactics have become a common feature of China’s increasingly aggressive diplomacy. Chinese diplomats now routinely use a mixture of threats and nationalist messages to defeat Beijing’s critics and advance the country’s interests.

“The Chinese people do not allow some foreign companies to eat Chinese food and break Chinese pods,” said Hua Chunying, a spokeswoman for the Foreign Ministry in Beijing, on Thursday. Ms. Hua seemed to be playing with a sentence that came from Xi Jinping, China’s top leader. In 2014, he called for loyalty to the party, saying, “Never allow the Communist Party to eat food and then break the Communist Party’s cooking pots.”

This style has its fans at home.

“Yesterday’s H&M incident shocked the world and I was very disgusted,” said Luo Yanqiu, a 34-year-old bakery worker in Shanghai who went to an H&M store with a friend on Thursday, to meet shoppers asking to boycott the brand.

At a Nike store in Shanghai, Yang Meilu, a 20-year-old college student, said she was there because she was curious to see how many buyers would show up.

Ms. Yang said she was deeply concerned that Nike had raised concerns about the work in Xinjiang. She said she was now skeptical of the brand. “I probably wouldn’t buy it from now on,” she said.

Chinese state media have openly fueled the outrage with hashtags on social media and bold headlines. Government officials have tried to portray the outcry as authentic. A trade ministry spokesman said Thursday that Chinese consumers “hoped the relevant companies would correct their wrong practices.”

For decades, foreign companies operating in China have had great concerns about being critical of the Chinese government. And in recent years, some of them have been besieged by a growing army of nationalist online users ready to pounce on the three Ts: Tibet, Taiwan and Tiananmen. Everyone quickly apologized and was largely unharmed.

This time, outrage erupts against the backdrop of the worst downturn in China-West relations in decades. As the Biden government pursues an alliance to curb China’s influence, Beijing, encouraged by its success in containing the coronavirus outbreak at home, is pressing tough on what it considers hypocrisy.

“It could get hotter,” said Jörg Wuttke, President of the European Chamber of Commerce in China, in an email. More European companies will be caught between a rock and a tough place, he said. “Everyone has to serve their local crowd.”

For many of these companies, however, the problem is more complicated than public relations management.

To get cotton, companies will almost certainly have to source it from Xinjiang, which produces 87 percent of the material in China. Around every fifth piece of cotton clothing sold worldwide contains cotton or yarn from Xinjiang.

In January, however, the Trump administration announced a ban on imports of cotton from Xinjiang and all products made with these materials, putting pressure on brands to review their supply chains. Human rights groups like the Uyghur Human Rights Project have also urged American lawmakers to pass sweeping laws that would block imports from Xinjiang unless companies can demonstrate that their supply chains are free from forced labor.

Foreign Ministry spokeswoman Ms. Hua on Thursday condemned the forced labor allegations, saying Beijing’s policies in Xinjiang have provided employment opportunities to lift people out of poverty.

“The allegation of ‘forced labor’ in Xinjiang is a lie fabricated by certain anti-China forces,” she said. “The purpose is to discredit China’s image, undermine Xinjiang’s security and stability, and hinder China’s development.”

H&M, the Swedish retailer, has borne the brunt of China’s outrage. On Wednesday, the Communist Youth League, an influential Communist Party organization, and state media highlighted a statement the company made eight months ago to express concerns about forced labor in Xinjiang. This prompted Chinese internet users to call for a boycott.

The company responded on Wednesday by stating that its statement on Xinjiang last year “does not constitute a political position.” It only made internet users who tried to apologize even more angry.

On Thursday, a mall in Xinjiang’s capital, Urumqi, closed an H&M store and asked the company to officially apologize to the people in the area. In the southwestern city of Chengdu, workers removed a company sign from a shop.

“I don’t expect this to subside,” said Surya Deva, an associate professor at City University in Hong Kong and a member of the United Nations Working Group on Business and Human Rights. “This is a different trajectory and a different era.”

Justine Nolan, a professor in Sydney in the Faculty of Law and Justice at the University of New South Wales, said it was also an opportunity for foreign companies to show their support for human rights.

“You are now being tested,” she added. “This is the red line for them – and it’s not an issue they can afford to be half-heartedly about.”

Coral Yang, Claire Fu, Chris Buckley, and Elsie Chen contributed to the reporting and research.

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