Chinese Government Attacks H&M Over Statement On Xinjiang Forced Labor: Report

The Swedish multinational clothing retailer H & M Hennes & Mauritz AB HMRZF has come under attack by the Chinese government in connection to a statement on the company’s website about its decision to stop sourcing cotton from Xinjiang following reports of forced labor from the region.

What Happened: According to a New York Times report, H&M posted a statement on its website last September stating the company was “deeply concerned by reports from civil society organizations and media that include accusations of forced labor and discrimination of ethno-religious minorities” in Xinjiang, adding it would no longer procure cotton from the region.

The H&M statement alluded to the Muslim Uyghur minority in Xinjiang, who have been the subject of increased persecution by the Chinese government, with some human rights organizations equating Chinese policies against this demographic with genocide.

Although the statement was posted months ago, it has suddenly sparked a furor within the Chinese government. The People’s Liberation Army used its Weibo social media account to denounce H&M as “ignorant and arrogant” and the Communist Youth League (CYL), an organization within the ruling Communist Party, also went on Weibo to berate H&M for “finding faults with Xinjiang cotton.”

“Want to make money in China while spreading false rumors and boycotting Xinjiang cotton? Wishful thinking!” the CYL said in a post.

Four Chinese e-commerce sites — Jingdong, Pinduoduo, Taobao and Tmall — have abruptly removed H&M merchandise from their respective platforms. China represents H&M’s fourth-largest market and accounted for 5.2% of its 2020 sales.

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What Happens Next: H&M China sought to do damage control with a Weibo posting that insisted the parent company did not “represent any political position,” adding its cotton is sourced from third parties and not directly from regional suppliers.

“H&M Group respects Chinese consumers as always,” the company said. “We are committed to long-term investment and development in China.”

According to the non-governmental agency ChinaAid, up to 1.8 million Uyghurs and other ethnic and religious minorities have been imprisoned, tortured and enslaved in Xinjiang and are being forced to manufacture goods for multinational retailers.In March 2020, the U.S. Congressional-Executive Commission on China issued a report that identified companies suspected of profiting from Uyghur forced labor in Xinjiang, including Adidas ADR ADDYY, Campbell Soup Company CPB, Coca-Cola Co KO, Costco Wholesale Corporation COST, Kraft Heinz Co KHC and Nike Inc NKE.

Very few multinational corporations have spoken openly about the treatment of China’s Uyghur population, but this month two prominent companies found themselves directly addressing the issue of China’s treatment of its Uyghur population. Last week, Bloomberg reported that Apple Inc AAPL severed ties with Chinese component supplier Ofilm Group Co. over its alleged role in Xinjiang’s forced labor camps.

And earlier today, the Washington Post reported Facebook, Inc. FB disrupted a China-based espionage campaign that attempted to spy on Uyghur Muslim journalists, dissidents and activists living in the U.S. and other countries.

Update: Campbell said in a statement to Benzinga after the publication of this story that it no longer sources any ingredients from the Xinjiang region. 

"Former Campbell subsidiaries in the Asia-Pacific region previously sourced a small amount of ingredients from Xinjiang. We divested those operations in 2019," the company said.

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(Photo courtesy MediaPhoto.org / Wikimedia Commons.)