What’s just happened?

On 25th March 2021 the Wall Street Journal reported that the major Swedish company H & M, one of the world’s largest clothing retailers, had effectively ceased to exist online after being erased from the majority of China’s leading e-commerce, ride-hailing, daily deals and map applications. [1][2]

What does this mean?

The Wall Street journal claimed that multiple apps run by large search engines shockingly returned zero results for H&M. To underline the significance of the stand-off, H&M had no option but to close 20 of its estimated 500 stores in the country. [3]

The Chinese Government’s questionable actions at first appeared to have been in response to the furore over H&M’s decision to stop sourcing from the major cotton producing region of Xinjiang in protest over issues such as China’s policies towards ethnic groups within Xinjiang and forced labour allegations. [4]

On 31st March 2021 the Wall Street journal reported that Helena Helmersson, the Chief Executive of H&M, had issued a statement making plain its ambition to be a “responsible buyer” and standing its ground on its pro-human rights position. [5]

However, in contrast to the impression created by the Chinese state this is the latest evidence of a worrying trend in China’s deteriorating attitude towards the supporters of basic human rights for the most vulnerable. Sadly, this treatment is not merely confined to H&M as there is a growing body of compelling evidence of major retailers such as Nike, Burberry, Adidas and Converse being targeted by China in similar ways. [6] [7]

On closer inspection it appears that the response by China was triggered after several Western counties imposed sanctions on China combined with the above major Western Brands expressing concern over allegations that members of mostly minority Muslim Uighur groups are being used as forced labour. [8]

In 2020, the BBC’s investigation into “China’s ‘tainted’ cotton” concluded that “China is forcing hundreds of thousands of Uighurs into hard, manual labour in the vast cotton fields of its western region of Xinjiang”. There are damaging allegations of over a million people being detained in a large network of detention camps and reports that minority groups are being coerced into working in textile factories. [9]

China denied the allegations of using forced labour insisting that the camps are “vocational training schools” and that the factories are part of a massive voluntary “poverty alleviation” scheme.[10] The Chinese State hit back by imposing sanctions on European lawmakers, scholars and institutions [11].

Written by Adam Green

Assessing firms:

#Linklaters #Clifford Chance #Slaughter&May #White & Case #Bird&Bird #RPC #McGrath Nicholl #ShooSmiths #Kennedys #Pinsent Masons #Accenture #Latham & Watkins #Goldman Sachs #JP Morgan #King Wood Malleson# @KTS_Law @StatewatchEU

References

[1] Xiao, Eva - H&M Is Erased From Chinese E-Commerce Over Xinjiang Stance - WSJ – 25 March 2021;

[2] Woo, Stu - H&M, Under Attack in China, Sticks to Stance That Angered Beijing - WSJ – 31 March 2021;

[3] Ibid;

[4] Ibid;

[5] ibid;

[6] Brant, Robin - Xinjiang cotton: Western clothes brands vanish as backlash grows - BBC News;

[7] Ibid;

[8] Komireddi, Kapol – Show no mercy: The tragedy in Xinjang – Can anything save the Uighurs? – Critic magazine – 8 June 2020;

[9] Sudworth. John - China’s ‘tainted’ cotton (bbc.co.uk) – December 2020

[10] Ibid;

[11] Ibid;

Disclaimer: This article (and any information accessed through links in this article) is provided for information purposes only and does not constitute legal advice.