China Retaliates Against Clothing Brands After Western Sanctions

Mar 25, 2021
Originally published on March 29, 2021 2:46 am

BEIJING — The clothing brand H&M has come under a sudden, intense storm of criticism in China over a statement it made more than half a year ago, where it distanced itself from cotton sourced from China's Xinjiang region.

Major online retailers in China have pulled H&M products from their sites or mobile apps. Two Chinese celebrities have already severed deals with the Swedish brand. Chinese state media outlets are now calling out other Western clothing brands — including Nike, New Balance and Burberry — for not using Xinjiang cotton.

"Pure and flawless Xinjiang cotton cannot allow any forces to smear or blacken it," a Chinese commerce ministry spokesperson said Thursday.

The calls for boycott come only days after the European Union, United Kingdom, U.S. and Canada jointly sanctioned four Chinese individuals and entities for alleged human rights abuses in Xinjiang.

H&M's woes stem from a statement the group posted last September in which it expressed concern over allegations of forced labor in Xinjiang and said it would not tolerate forced labor in any of its supply chains.

Months went by quietly until this week, when Internet users noticed the statement and began lambasting the brand for hurting Chinese interests. H&M, as well as Nike and Adidas — two other brands that have joined initiatives to boycott Xinjiang cotton — are now trending on Chinese social media as hundreds of thousands of Internet users heap criticism on them.

"Want to make money in China while spreading false rumors and boycotting Xinjiang cotton? Wishful thinking!" the Communist Party Youth League posted on Chinese social media.

The H&M statement was taken down from the company website as of Thursday. On Weibo, the company wrote that it "consistently respects Chinese consumers" and is devoted to "long-term investment and development" in the country.

Taobao, the online retail platform owned by technology behemoth Alibaba, no longer appears to host H&M products. Searches on Taobao for "HM" or "H&M" that once returned thousands of vendors and resellers now return zero search results.

China is a major market for the clothing retailer. H&M has 505 stores in mainland China, second only to the United States. In 2019 alone, the H&M Group cleared $1.2 billion in sales in the mainland.

Authorities in Xinjiang have detained hundreds of thousands of people from Muslim ethnic minorities, including the Uyghurs. Many of those released from detention in Xinjiang are then given state-assigned jobs at factories and state-controlled cotton farms. Xinjiang produces as much as 85% of cotton in China, much of it for export.

Those alleged human rights abuses have triggered numerous sanctions on Chinese officials, companies and government entities from the U.S., EU, U.K. and Canada. The U.S. has banned all tomatoes and cotton produced in Xinjiang. Last year, the Better Cotton Initiative (BCI), a Switzerland-based industry group, said it could no longer verify Xinjiang cotton was abuse-free.

China has vehemently denied that it is arbitrarily detaining ethnic minorities and claims instead that it is "reeducating" them to speak Chinese, renounce extremist views and lift them from poverty.

Chinese regulators have also been preparing retaliatory mechanisms, including an "unreliable entities list," to identify and punish companies or individuals that criticize or put sanctions on China. Its commerce ministry has also created a far-reaching "blocking mechanism" that would put counter-sanctions on any foreign entity that does not sell to China because of sanctions.

China's increasing willingness to retaliate appears to have forced other brands to quickly pick sides after the backlash against H&M, or risk losing access to one of the world's largest consumer markets.

Nike makes the official uniforms for Shanghai Shenhua Football Club, one of the country's largest soccer teams, and its distinctive swoosh logo is featured prominently on the chests of Shenhua players. But a training photo published on Shenhua's Chinese social media page on Thursday showed players jogging in their blue uniforms absent any Nike logo.

Inditex, the Spanish parent company to clothing brands Zara and Massimo Dutti, quietly took down a statement on its "zero-tolerance approach to forced labor" this week. A cached version of the release could still be found on Thursday.

Japanese retail brand Muji told the party-backed tabloid Global Times that it will continue to source cotton from Xinjiang. In 2019, Muji launched its "Xinjiang Cotton" line of "beautiful, pre-washed" cotton clothing items.

Anta Sports, a Chinese sportswear brand, said this week it was seeking to quit BCI so it could continue sourcing cotton from Xinjiang.

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Seven months ago, the Swedish clothing brand H&M put out a statement saying it was troubled by allegations of forced labor in China's western region of Xinjiang. That's the region where authorities have detained hundreds of thousands of Uyghur and other historically Muslim ethnic minorities. This week, H&M has come under an intense storm of government-prompted criticism in China. And consumers there are now boycotting H&M. Here's NPR's Beijing correspondent Emily Feng.

EMILY FENG, BYLINE: It's Friday. And I'm outside one of H&M's flagship stores in Beijing, which is not far from the NPR office. And according to China's e-commerce sites, its online mapping services, this store does not exist. That's because just five days ago, the European Union, the U.S., U.K. and Canada, they put sanctions on China for alleged human rights abuses in Xinjiang. And China put counter-sanctions on European and British entities. But this H&M store is a sign of a much more powerful flex. It shows China can marshal nationalism among its vast consumer base to boycott Western brands as retaliation. So what to do right now if you're a multinational brand in China?

MATTIE BEKINK: I think there's a lot of kind of internal, quiet deliberations about what this portends and how to respond.

FENG: That's Mattie Bekink, who runs the Economist group's corporate services in China. She meets with a lot of CEOs and says they're stuck between how to meet global ethical standards while keeping the China market happy.

BEKINK: Caution seems to be the name of the game at the moment. Everyone for the last few months, years has been trying to avoid being caught in the crossfire between the U.S., China. Trade tensions, tech rivalry, you name it - it seems unavoidable at this point. And I think that's what feels different now.

FENG: Muji, a Japanese lifestyle brand, actually came out this week to say we do use Xinjiang cotton. And Inditex, which is the parent company of big brands like Zara and Massimo Dutti, quietly removed its statement on Chinese cotton supply chains. Online posts condemning H&M for not using Chinese cotton have been share hundreds of millions of times in China. And the boycott campaign has clear official support from the state

HUA CHUNYING: (Non-English language spoken).

FENG: On Thursday, Hua Chunying, a foreign ministry spokesperson, blamed Western companies for believing what she called rumors about Xinjiang cotton. Then she pulled out two A4 sheets of paper at a press conference. One had a picture of African American slaves on a Mississippi cotton plantation. And another had a picture of a modern Xinjiang cotton field.

CHUNYING: (Non-English language spoken).

FENG: Two years ago, China briefly boycotted the NBA. Four years ago, it blocked South Korean brands. Almost 10 years ago, it boycotted Japanese cars. And today, it's European clothing brands China is boycotting. Right now, China is also developing powerful mechanisms to punish international companies that support Western sanctions against Beijing. But China doesn't even really need those. Boycotts are just as ruinous.

Emily Feng, NPR News, Beijing.

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