Western brands tested by China in backlash over forced labor allegation

Western brands tested by China in backlash over forced labor allegation

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

Shrugging off the criticism, Li, 33, said she would continue to share fashion items she liked from Western brands, “as long as they are pretty and highly cost effective.”

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

The backlash to the boycott has left Western companies in an uncomfortable position.

Download the NBC News app for breaking news and politics

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

But socially conscious young shoppers in Western countries have also looked for brands to take a stand on ethical issues linked to their products, from climate change to labor conditions.

‘Huge dilemma’

As the U.S. and its allies put pressure on China through sanctions, deeming the treatment of Uyghurs to be “genocide” — allegations Beijing denies — many brands expressed concern about reports of forced labor.

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

“It is quite a tricky position. Companies flocked to China over the last 25 years with one purpose in mind: to make money,” economist and author George Magnus said. Now, they face a “huge dilemma.”

At the center of the storm — stoked by state media and officials after a year-old statement about the subject resurfaced on Chinese social media — H&M, has vowed to earn back the support of Chinese consumers.

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

The company also said it wanted to be a “responsible buyer” in China and elsewhere and was “actively working on next steps with regards to material sourcing.” It 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 Xinjiang government spokesman, said at a news conference last month. He compared some brands’ efforts to distance themselves from cotton produced in the region to “lifting a stone to drop it on one’s own feet.”

The 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 on its official account on the Chinese social media platform Weibo last month that it would “continue to purchase and support Xinjiang cotton,” which it said was some of “the best in the world.”

The post was deleted.

In response to a request for comment, Hugo Boss — which in recent years has apologized for the use of forced labor at its factories that made uniforms for Nazi soldiers during World War II — said the Weibo post was unauthorized and did not reflect its position.

“We value our long-standing relationships with many partners in various locations in China,” the company said in its most recent statement on its website. “So far, Hugo Boss has not procured any goods 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 seemed to affirm its openness to using cotton from Xinjiang in a statement online this month, but it said it was “taking all necessary steps to respect human rights and manage labor standards.” After the sportswear brand Fila’s Chinese affiliate said it would continue to use cotton from Xinjiang and would look to withdraw from the Better Cotton Initiative, the company’s headquarters appeared to distance itself.

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

Walking the line

In the weeks since the initial backlash to the boycott, images on Chinese state television have been subject to censorship that blurred Western brand logos on sneakers and sweaters. Meanwhile, some H&M stores seemed to vanish from prominent Chinese search engines and e-commerce sites, The Associated Press reported.

Because Xinjiang is a key exporter of the world’s cotton supplies, the scope of the problem for businesses is “tremendous,” presenting a real “test of corporate integrity,” said Penelope Kyritsis, director of strategic research at the Worker Rights Consortium, a U.S.-based labor rights monitoring organization.

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

More than 1 million Uyghur Muslims are believed to be held in internment camps in the region, where they are forced to study Chinese law, venerate the Communist Party, renounce their religion and work in factories, according to human rights groups and firsthand accounts from Uyghurs.

In January, the U.S. announced that it would halt all imports of cotton from the Xinjiang region, and in March the Biden administration slapped sanctions on Chinese people because of the allegations of abuses.

Chinese officials have rejected the claims. The government contends that courses at what it calls “educational and vocational training centers” will help Uyghurs find future employment and that they are necessary to fight extremism.

Likening the situation to apartheid in South Africa, Magnus, the economist, said willfully neglecting human rights allegations could harm brands and China alike.

“Fundamentally, this is really about values and belief systems,” he said.

And while China may represent a growing market for retailers, socially conscious millennials and Generation Z shoppers in the U.S. and Europe also represent a “numerically significant” demographic that cannot be ignored, he said.

As of 2019, these younger Americans outnumbered the baby boomer generation, making up just over half of the U.S. population, according to an analysis by the Brookings Institution think tank.

The choices businesses make now 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 adversarial tussle, and there will be a price to pay,” Magnus said, “whichever way they choose to act.”

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

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

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

“I’m hoping 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 juggernauts,” Calhoun said during the U.S. Chamber of Commerce Aviation Summit last month.

“We cannot afford to be locked out of that market. Our competitor will jump right in,” he said.

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

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

Mitter said that calls for boycotts could boost nationalism and support for the Communist Party but that they are likely to inflict less economic harm than expected.

“So far, it’s not clear whether the rise in short-term patriotic feeling is necessarily actually really changing long-term consumer behavior,” he said.

Yang Zhengmeng, 35, a sportswear blogger from Henan, said he would be taking part in the boycott of Western brands over their stance on Xinjiang, even though it means giving up his favorite Nike running shoes.

“Because of this, I will personally have to change trainers,” he said. “Although it affects me a little, I’ll still uphold this boycott to the end!”

Source link

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.