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  • Shein lawyer refuses to say if it uses Chinese cotton

    A senior lawyer representing Shein has repeatedly refused to say whether the company sells products containing cotton from China, prompting an MP to brand her evidence “ridiculous”.

    Yinan Zhu, general counsel for the fast-fashion giant, confirmed its suppliers did manufacture products in the country, but declined to say whether they used Chinese cotton.

    Firms that source clothing, cotton, and other products from the Xinjiang region in the north west of China in particular have come under pressure following allegations of forced labour and human rights abuses.

    Ms Zhu’s refusal to answer questions was met with backlash from a committee of MPs, who accused her of “wilful ignorance”.

    Shein has grown rapidly since it was founded in 2008, and saw its business boom during the pandemic.

    Its steep rise has meant the company has gone from a little-known brand to one of the biggest fast fashion retailers globally, shipping to customers in 150 countries.

    But the company, which was founded in China but is now headquartered in Singapore, has come under fire over its environmental impact and working practices, which include allegations of forced labour in supply chains. Shein has denied this.

    China has been accused of subjecting members of the Uighur, a mainly Muslim ethnic minority, to forced labour. In December 2020, research seen by the BBC showed that up to half a million people were being forced to pick cotton in Xinjiang, but Beijing has denied any rights abuses.

    The allegations have led to some big fashion brands, including H&M, Nike, Burberry and Adidas, removing products using Xinjiang cotton, which has led to a backlash in China, and boycotts of the companies.

    On Tuesday, MPs on the Business and Trade committee repeatedly challenged Ms Zhu over whether Shein products contained Chinese cotton and in particular cotton from Xinjiang.

    Ms Zhu declined to answer and asked if she could write to the committee following the hearing.

    She told MPs that the company does not own any factories or manufacturing facilities, but works with a large network of suppliers, mostly in China, but also in Turkey and Brazil.

    She added that Shein complied with “laws and regulations in the countries we operate in”.

    Ms Zhu said its suppliers were required to sign up to robust standards and that third party agencies carried out thousands of audits.

    Challenged on whether the company specifically prohibits its suppliers from sourcing cotton from Xinjiang as part of its checklist of conditions, she said: “I’m going to have to ask for permission to write back to this.”

    The hearing came after the BBC reported the company had filed initial paperwork to list shares on the London Stock Exchange, which could value it at £50bn.

    Ms Zhu refused to provide answers on the potential listing.

    Charlie Maynard, a Liberal Democrat MP on the committee, hit out at Ms Zhu’s comments, and accused her for “wilful ignorance”.

    “I am on your website and I can see about 20 products which are all cotton…. and yet you say to our chair that you can’t state whether Shein is selling any products which are made in China, which are made of cotton? I find that completely ridiculous,” he said.

    “You mention every other spot of the compass, but you don’t mention west China, you don’t mention Xinjiang at all. It’s wilful ignorance.”

    Ms Zhu responded saying she was “doing the best I can”, and was “giving answers to the best of my ability”, which prompted Maynard to reply: “That is simply not true.”

    Appearing exasperated, Liam Byrne, chair of the committee, said for a company that sells £1bn worth of goods to consumers, and was looking to list in the UK, the committee had been “pretty horrified by the lack of evidence” Ms Zhu had provided.

    “You can’t tell us anything about listing, you can’t tell us anything about cotton in Shein products, and you can’t tell us much, in fact.”

    Byrne added that Ms Zhu’s reluctance to answer basic questions “bordered on contempt of the committee”.

    In contrast, fellow fast-fashion retailer Temu told the committee that it did not permit sellers from the Xinjiang region to sell products on the platform.

    Stephen Heary, senior legal counsel at Temu, said: “Any issues of labour practices are something that we take fundamentally very seriously.”

    Byrne said the company had given “some reassurance” over its supplier agreements.

  • China probes Calvin Klein over Xinjiang cotton

    China has announced it is investigating the company that owns US fashion brands Tommy Hilfiger and Calvin Klein for suspected “discriminatory measures” against Xinjiang cotton companies.

    The move marks a new effort by Beijing to fight back against allegations from western officials and human rights activists that cotton and other goods in the region have been produced using forced labour from the Uyghur ethnic group.

    The US banned imports from the area in 2021, citing those concerns.

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

    PVH, which owns the two brands and has a significant presence in China as well as the US, said it was in contact with Chinese authorities.

    It has 30 days to respond to officials, at which point it could be added to the country’s “unreliable entities” list, raising the prospect of further punishment.

    “As a matter of company policy, PVH maintains strict compliance with all relevant laws and regulations in all countries and regions in which we operate,” the company said. “We are in communication with the Chinese Ministry of Commerce and will respond in accordance with the relevant regulations.”

    On Wednesday, a Chinese Ministry of Commerce official denied that the probe was linked to US plans to ban certain Chinese electric vehicle technology.

    “China has always handled the issue of the unreliable entity list prudently, targeting only a very small number of foreign entities that undermine market rules and violate Chinese laws,” they said.

    “Honest and law-abiding foreign entities have nothing to worry about.”

    Cullen Hendrix, senior fellow at the Peterson Institute of International Economics, said it was not clear exactly what prompted the investigation into PVH now.

    But he said the announcement was likely to hurt the firm’s reputation among Chinese shoppers – and send a wider warning to global firms of the risks of simply bowing to western concerns.

    “China is, to a certain extent, flexing its muscle and reminding, not necessarily western governments, but western firms… that actions have consequences,” he said.

    “This same kind of naming-and-shaming tactic, that human rights organisations in the west have used, can be weaponised here.”

    The investigation of PVH comes as tensions between China and the west have been growing on a range of issues, including electric cars and manufacturing.

    On Monday, the US proposed rules to ban the use of certain technology in Chinese and Russian cars, citing security threats.

    China has previously put US firms on its unreliable entities list, which it created as trade tensions heated up between Beijing and Washington.

    Those firms were major defence contractors, such as Lockheed Martin and Raytheon, over their business in Taiwan.

    Mr Hendrix said the decision to target PVH – a consumer-facing firm with a clearly recognisable US brand – showed the two countries’ disputes were widening beyond areas such as defence and advanced technologies.

    “These things have a way of spilling over,” he said. “It’s affecting a growing number of supply chains across different sectors of the economy.”

    In its annual report, PVH warned investors of revenue and reputational risks stemming from the fight over Xinjiang.

    It noted that the issue had been “subject to significant scrutiny and contention in China, the United States and elsewhere, resulting in criticism against multinational companies, 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.

    At the time PVH said it took the reports seriously and would continue to work to address the matter.

    PVH employs more than 29,000 people globally and does more than 65% of its sales outside of the US.

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