China investigates Calvin Klein over Xinjiang cotton

China investigates Calvin Klein over Xinjiang cotton

China has initiated an investigation into the parent company of US fashion labels Tommy Hilfiger and Calvin Klein, citing alleged “discriminatory measures” against companies involved in Xinjiang cotton production.

Beijing’s latest initiative represents a strategic response to ongoing accusations from Western officials and human rights advocates regarding the alleged use of forced labor from the Uyghur ethnic group in the production of cotton and other goods in the region.

In 2021, the United States implemented a ban on imports from the region, referencing specific concerns as the rationale behind the decision.

China’s Ministry of Commerce has accused the firm of “boycotting Xinjiang cotton and other products without any factual basis.”

PVH, the parent company of the two brands with notable footprints in China and the United States, has yet to respond to a request for comment.

The company has stated its adherence to the legal frameworks in the areas where it operates, including compliance with the US Xinjiang law.

The entity has a 30-day window to respond to the Chinese authorities, after which it may face inclusion on the nation’s “unreliable entities” list, potentially leading to additional repercussions.

On Wednesday, a representative from the Chinese Ministry of Commerce refuted claims that the investigation was connected to US intentions to prohibit specific Chinese electric vehicle technologies.

“Officials stated that China has consistently approached the matter of the unreliable entity list with caution, focusing solely on a limited number of foreign entities that disrupt market regulations and breach Chinese laws.”

“Foreign entities that adhere to legal standards and operate with integrity should feel assured.”

Cullen Hendrix, a senior fellow at the Peterson Institute of International Economics, expressed uncertainty regarding the specific reasons behind the timing of the investigation into PVH.

He indicated that the announcement could damage the company’s standing with Chinese consumers and serve as a broader caution to international businesses about the dangers of yielding to Western pressures.

“China is, to a degree, asserting its influence and signaling to Western firms, if not governments, that actions carry repercussions,” he stated.

“The tactic of naming and shaming, commonly employed by human rights organizations in the West, has the potential to be weaponized in this context.”

The inquiry into PVH arises amid escalating tensions between China and the West and encompasses various topics, such as electric vehicles and manufacturing practices.

On Monday, the United States proposed regulations prohibiting the incorporation of specific technologies in vehicles manufactured in China and Russia, highlighting concerns over national security.

In a move reflecting escalating trade tensions, China has previously included US companies on its unreliable entities list, a designation established amid growing friction between Beijing and Washington.

Major defense contractors, including Lockheed Martin and Raytheon, have been involved in significant business activities in Taiwan.

Mr. Hendrix stated that the choice to focus on PVH, a consumer-oriented company with a well-known American brand, indicated that the disputes between the two nations were expanding beyond traditional sectors like defense and advanced technologies.

“These matters tend to overflow,” he remarked. “A rising number of supply chains across various sectors of the economy are being impacted.”

In its annual report, PVH cautioned investors about potential revenue and reputational risks associated with the ongoing conflict in Xinjiang.

The statement highlighted that the matter has faced considerable examination and debate in China, the United States, and beyond, leading to backlash directed at multinational corporations, including the speaker’s organization.

A 2020 report by the Australian Strategic Policy Institute has implicated the company among numerous firms purportedly profiting from labor abuses in Xinjiang.

PVH acknowledged the seriousness of the reports and committed to ongoing efforts to address the issue.

With a workforce exceeding 29,000 individuals worldwide, PVH generates over 65% of its sales from international markets.

 

Share on facebook
Facebook
Share on whatsapp
WhatsApp
Share on twitter
Twitter
Share on linkedin
LinkedIn

Leave a Reply

Your email address will not be published. Required fields are marked *