Commentary on Political Economy

Saturday 27 March 2021



H&M Stores Shuttered in China as Backlash Over Xinjiang Grows

Bloomberg News
China Viewed as ‘Greatest Enemy’ by 45% of U.S.: Gallup
H&M Faces Boycott in China

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Hennes & Mauritz AB stores in some parts of China are being closed by their landlords as fallout from the fashion retailer’s statement about forced labor in the contentious region of Xinjiang continues to spread.

At least six stores in the lower-tiered cities of Urumqi, Yinchuan, Changchun and Lianyunang have been shut down by the owners of the properties, according to mall operators in those areas who were contacted by Bloomberg. Local media have reported more closures, with pictures showing H&M’s brand billboards being removed.

The closures come amid rising outcry and calls for a boycott on Chinese social media against an undated H&M statement over its website that expressed concern about reports of forced labor in the far west region. While the statement -- blasted by the Communist Youth League and the People’s Liberation Army on social media -- appeared to have been removed from the website of the Swedish multinational as of Friday, a separate link on its homepage expressing the same stance on Xinjiang cotton was still active.

Some of the mall operators said the decision to shutter was made by the landlords because of disrespect shown by H&M toward China. There is no indication of the length of the closures.

The global clothing retailer’s outlets have also vanished on Apple Maps and Baidu Maps searches. H&M had said in the statement that it’s “deeply concerned by reports from civil society organizations and media that include accusations of forced labor and discrimination of ethnoreligious minorities.”

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China’s response to H&M is markedly stronger than its previous pushback when foreign brands crossed political lines. The escalation comes as the U.S., the U.K. and others highlight human rights abuses of Muslim-minority Uyghurs in Xinjiang, and tensions between China and the West simmer. U.S. Secretary of State Antony Blinken, National Security Advisor Jake Sullivan and their Chinese counterparts traded criticism on human rights and national security issues during a two-day face-to-face meeting this month in Alaska.

A representative at H&M China didn’t immediately respond to requests sent by Bloomberg, while a spokesperson in Europe said the retailer has no comment to make currently. The company has 505 stores in China as of Nov. 30.

U.S. and European retail brands including Nike Inc. and Inditex SA’s Zara are also facing a dilemma over whether to embrace cotton from the Xinjiang region or risk being boycotted in the world’s second-biggest economy.

The U.S. on Friday accused China of a state-run social media campaign and boycott against companies that refuse to use cotton from Xinjiang. China has targeted American, European and Japanese businesses that are avoiding Xinjiang cotton, State Department deputy spokeswoman Jalina Porter told reporters on Friday. She said that amounts to a state-run “corporate and consumer boycott.”

China is one of the five biggest markets for H&M in terms of revenue with 5.2% of the group’s total sales in 2020.

“We can’t tolerate any forces bringing shame on and tarnishing the pure and flawless Xinjiang cotton,” Gao Feng, a spokesman for the Chinese Commerce Ministry, said at a briefing on Thursday. “Chinese consumers have acted in response to the so-called business decisions made by some companies based on false information. We hope the relevant companies will respect market laws, correct wrong practices, and avoid the politicization of commercial issues.”

While China realizes it’s unlikely to silence criticisms from the West by fighting back, its more aggressive stance is mainly to show a domestic audience that the Communist Party is “the best and most determined defender of China’s interests,” said Shi Yinhong, director of Renmin University’s Center on American Studies in Beijing.

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