Western brands under pressure in China over rights

A man walks past a store of the sporting goods retailer Nike at a shopping complex in Beijing. Photo: Florence Lo/Reuters

March 26 2021 02:00 AM

US and European retail brands in China are facing a dilemma: embrace cotton from the Xinjiang region and come under attack in the west, or reject it and risk a boycott in China.

Hennes & Mauritz (H&M) was blasted by the Communist Youth League and the People’s Liberation Army (PLA) on Wednesday after social media users dug out an undated company statement about accusations of forced labour in Xinjiang where Beijing is accused of repressing Uighurs Muslims.

Calls to boycott the Swedish retailer, which gets 5.2pc of its global revenue in China, quickly spread to include Nike, which has previously said it won’t source products from the region due to labor concerns.

“Want to make money in China while spreading false rumors and boycotting Xinjiang cotton? Wishful thinking!” the Communist Youth League said in a post on Chinese microblogging website Weibo, referring to H&M. One of the PLA’s Weibo accounts called H&M’s statement “ignorant and arrogant”.

The Communist Party’s move to target companies over Xinjiang shows President Xi Jinping’s government is seeking to impose real costs for governments and businesses that criticise China’s human rights record as President Joe Biden’s administration aims to unite allies over the issue.

Beijing slapped sanctions on European Union officials on Monday, following coordinated sanctions and statements by the EU, US, Canada, Australia and New Zealand.

H&M shares fell as much as 4.4pc and Nike fell as much as 5.4pc in New York before the start of regular trading.

At a testy meeting between top US and Chinese diplomats last week, Politburo member Yang Jiechi made extended remarks attacking the human rights record of the US and called on the world to stop interfering in China’s “internal affairs”. A foreign ministry spokeswoman called the Xinjiang forced labor allegations “malicious lies fabricated by anti-China forces”.

Bloomberg