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 ire of the Chinese consumer, the same buyers who for years have clamored for their products and paid them large sums of money. At the instigation of the Communist Party, Chinese online activists are punishing foreign companies that adhered to the call to avoid the use of cotton produced in the Chinese region of Xinjiang, where authorities are waging a broad campaign of repression against ethnic minorities.
The sudden outburst of anger exposes the vulnerability of foreign companies as tensions worsen between China and the United States and other countries. US lawmakers in particular, who have increasingly criticized China, have been pressing international companies to take a public position on China’s human rights practices, including in Xinjiang. This makes companies convenient targets for Chinese officials, who are reacting aggressively to American officials.
“Many western countries and China are very black on this issue. There is not much gray, ”said Trey McArver, co-founder of Trivium China, a consultancy that helps foreign companies sell in China, referring to opposing positions on Beijing’s policies in Xinjiang. “You can’t agree with both, so I don’t think it’s an easy answer.”
China hasn’t said much, but its campaign against those brands came days after the United States and other Western countries imposed new sanctions on top Chinese officials earlier this week. They sought to punish Beijing for abuses against Uighurs and other minorities, which have been well documented by foreign media and human rights groups. There is also growing evidence that Xinjiang cotton is linked to coercive work programs and mass internment of up to one million Uighurs, Kazakhs and other Muslim minorities, say the United States government and human rights groups.
It is unclear what the long-term impact will be on Western companies that depend on China to manufacture or buy their products. As of Thursday, there was still a steady flow of buyers at several popular H&M and Nike outlets in Shanghai and Beijing. Previous state media pressure campaigns against companies such as Apple, Starbucks and Volkswagen have ended up failing to dampen Chinese demand for their products.
Still, his position may become increasingly precarious as Beijing looks for ways to oppose the narrative. And it is not strange to use your economic strength for political purposes.
Years earlier, after South Korea adopted an American anti-missile defense system, the Chinese government fueled an anti-South Korean sentiment in the country that ended up forcing Lotte Mart, a popular South Korean supermarket, to close many of its points of sales. The missile system remained, but Beijing was still capable of causing pain.
These tactics have become a common feature of China’s increasingly aggressive diplomacy. Chinese diplomats now routinely use a mix of threats and nationalist messages to intimidate Beijing’s critics and assert the country’s interests.
“The Chinese people do not allow some foreign companies to eat Chinese food and break Chinese bowls,” said Hua Chunying, a spokesman for the Foreign Ministry in Beijing, on Thursday. Ms. Hua seemed to be playing with a phrase attributed to Xi Jinping, China’s main leader, who, in demanding loyalty to the party, said in 2014: “Never allow yourself to eat Communist Party food and then break the Communist Party’s pots ”.
This style has fans at home.
“The H&M incident yesterday shocked the world and I was very disgusted,” said Luo Yanqiu, a 34-year-old bakery worker in Shanghai who went to a H&M store on Thursday with a friend to ask customers to boycott the brand.
At a Nike store in Shanghai, Yang Meilu, a 20-year-old student, said she was there because she was curious to see how many buyers would show up.
Yang said he was deeply concerned that Nike had raised concerns about working in Xinjiang. She said she is now skeptical of the brand. “I probably wouldn’t buy it from now on,” she said.
Chinese state media openly fueled outrage with hashtags on social media and bold headlines. Government officials tried to portray the protest as authentic, with a Ministry of Commerce spokesman saying on Thursday that Chinese consumers “expected the relevant companies to correct their wrong practices”.
For decades, foreign companies operating in China have been very cautious about not appearing critical of the Chinese government. And in recent years, several of them have been surrounded by a growing army of nationalist online users, who were ready to attack the three Ts: Tibet, Taiwan and Tiananmen. Everyone apologized quickly and left unscathed.
This time, indignation is exploding against the backdrop of the worst downturn in relations between China and the West in decades. While the Biden government seeks an alliance to curb China’s influence, Beijing, encouraged by its success in containing the coronavirus outbreak at home, is fighting what it considers hypocrisy.
“It can get hotter,” said Joerg Wuttke, president of the European Chamber of Commerce in China, by email. More European companies will be caught between the stone and the stone, he said. “Everyone has to serve their domestic crowd.”
But for many of these companies, the issue is more complicated than a public relations management issue.
To obtain cotton, companies almost certainly need to obtain it from Xinjiang, which produces 87% of the material in China. Approximately one in five cotton clothing sold globally contains Xinjiang cotton or yarn.
But in January, the Trump administration announced a ban on imports of Xinjiang cotton, as well as all products made from these materials, putting pressure on brands to check their supply chains. Human rights groups, such as the Uyghur Human Rights Project, have also been pressing American lawmakers to enact comprehensive legislation that would block imports from Xinjiang unless companies can prove that their supply chains are free from forced labor.
Hua, a spokesman for the Foreign Ministry, denounced the allegations of forced labor on Thursday, saying Beijing’s policies in Xinjiang had provided job opportunities to lift people out of poverty.
“The charge of ‘forced labor’ in Xinjiang is entirely a lie invented by certain anti-China forces,” she said. “The aim is to discredit China’s image, undermine Xinjiang’s security and stability and impede China’s development.”
Swedish retailer H&M was responsible for 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 outlining its concerns about forced labor in Xinjiang. This prompted Chinese Internet users to call for a boycott.
The company responded on Wednesday, saying that its statement last year about Xinjiang did not “represent any political position”. This only made Internet users, who were pleading for an apology, more furious.
On Thursday, a mall in the Xinjiang capital, Urumqi, closed an H&M store, asking the company to formally apologize to people in the region. In the southwestern city of Chengdu, workers dismantled the company’s sign in a store.
“I don’t expect this to end,” 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 time.”
Justine Nolan, a professor in Sydney at the Faculty of Law and Justice at the University of New South Wales, said that this is also an opportunity for foreign companies to demonstrate their support for human rights.
“They are now being put to the test,” she added. “This is the red line for them – and it is not a problem for which they can afford to hesitate.”
Coral Yang, Claire Fu, Chris Buckley and Elsie Chen contributed reports and research.