China has announced that it is looking into the US clothing line Tommy Hilfiger and Calvin Klein for alleged “discriminatory methods” taken against Xinjiang fabric businesses.
Beijing’s response to allegations made by western leaders and human rights activists that cotton and other products in the area were produced using forced labor by the Uyghur ethnic class is being challenged by the new initiative.
The US banned exports from the place in 2021, citing those problems.
The company was accused of “boycotting Xinjiang cotton and other materials without any scientific base” by China’s Ministry of Commerce.
The two companies ‘ owners, PVH, which has a significant reputation in both China and the US, did not respond to a request for comment.
It has previously said it complies with laws in the regions where it does business, including the US Xinjiang law.
It has 30 days to respond to the Chinese government, at which point it could be added to the government’s “unreliable companies” list, raising the possibility of more punishment.
It’s unclear exactly what prompted the research into PVH then, according to Cullen Hendrix, a senior colleague at the Peterson Institute of International Economics.
He added that the statement was likely to hurt the company’s standing among Chinese consumers and send a wider warning to international businesses about the dangers of bowing to Western concerns.
” China is, to a certain extent, flexing its muscles and telling, never actually western governments, but western companies… that deeds have effects”, he said.
” This same kind of naming-and-shaming strategy, that human rights organisations in the west have used, may be weaponised here”.
The research into PVH comes as China and the west have been tense over a number of problems, including manufacturing and electric cars.
On Monday, the US proposed rules to ban the use of certain technology in Chinese and Russian cars, citing security threats.
Prior to the start of the trade war between Beijing and Washington, China had previously listed US companies on its list of unreliable companies.
Those businesses were big military companies, quite as Lockheed Martin and Raytheon, over their company in Taiwan.
The decision to target PVH, a consumer-facing company with a clearly identifiable US company, was cited by Mr. Hendrix, demonstrated that the two nations ‘ issues were extending beyond areas like defense and advanced technologies.
” These items have a way of spilling over”, he said. A growing number of source stores across various economic businesses are being affected by it.
In its quarterly review, PVH cautioned owners about the repercussions of the conflict in Xinjiang on both revenue and reputation.
It stated that the situation had been” subject to significant attention and argument in China, the United States, and elsewhere, which has led to censure against foreign firms, including us.”
The company was named in a 2020 report by the Australian Strategic Policy Institute that identified dozens of firms that were allegedly benefiting from labour abuses in Xinjiang.
PVH stated at the time that it would continue to work on the issue and that it took the reports significantly.
PVH employs more than 29, 000 people worldwide, and it makes more than 65 % of its sales outside of the US.