Into The Dragons Den: Western Companies Are Forced To Choose Between Human Right And Profits.
Source: QILAI SHEN/BLOOMBERG NEWS
For more than a year now, several companies and countries have been walking on a fine line on the human rights abuse allegedly committed by Chinese authorities in the western region of Xinjiang. Several countries have been trying to quietly fight against the forced labor in the west of Xinjiang. However, they have never publicly accused China, maybe because they do not want to anger the Chinese Communist party and 1.4bn Chinese consumers.
In recent weeks, Chinese authorities are cracking down on countries criticizing their Xinjiang tactics and forcing companies to make a choice that foreign companies have been avoiding: support china or leave their market. In the past few weeks, China has also imposed sanctions on Britain, Canada, EU Parliament and think tanks. "China is not the first to shoot, neither will we be passive and submissive to threats from the outside, the Chinese people will not be bullied", said Yang Xiaoguang, chargé d'affaires the Chinese embassy in London.
On March 24th, the Communist Youth League, affiliated with the Chinese government, organized an online campaign to boycott H&M. The government and state media also participated in this event. H&M was wiped off China’s leading e-commerce, ride-hailing, daily-deals and map applications amid anger by Chinese consumers over the Swedish clothing brand’s decision to stop sourcing from Xinjiang. This was just a warning to other foreign brands like Adidas and Nike to retract their past statement on China's Uighurs treatment. Zhou Dongyu, an actress, rescinded her contract with Burberry because, according to her agency, the British maker had not "clearly and publicly stated its stance on cotton from Xinjiang."
The Biden administration has criticized Chinese boycotts towards international businesses. "The United States condemns the state-led social-media campaign and corporate and consumer boycott against companies, including American, European and Japanese businesses" for their decisions to avoid cotton from Xinjiang, State Department spokeswoman Jalina Porter said. Chinese Foreign Ministry spokeswoman Hua Chunying said allegations of forced labor used in Xinjiang were "malicious lies" made up by "anti-China forces."
Western brands are now in a tight spot because western consumers expect them to stand their ground against the Chinese Communist Party. The share prices of H&M and Nike fell after the news of the boycotts but have since recovered much of those losses. The big heroes are Chinese firms (thanks to patriotism) that are made from Xinjiang cotton, such as Anta, a big sportswear-maker listed in Hong Kong.
Therefore, the choice between the lucrative Chinese market and the values firms profess in the rest of the world is becoming unavoidable. For western companies, business in China always carries risk, and if foreign firms are forced to leave China, it could irritate many Chinese shoppers and hurt millions of Chinese workers.