China’s biggest region, Xinjiang, produces about a fifth of the world’s cotton (and 84-87 percent of all cotton from China, depending on your data source).
The human rights abuse allegations in Xinjiang have placed cotton production under the spotlight in recent weeks. Global brands such as H&M have been effectively ousted from China. This is following the resurfacing of condemnations online by the brands, alleging forced labour in the Xinjiang region, which were singled out by Beijing as “offensive” to China.
What happened first?
In September 2020, Swedish brand H&M said on its website it would no longer source cotton from Xinjiang because of its concerns over forced labour upon the Uyghurs, a Muslim ethnic minority. According to the Lowy Institute, H&M was prompted by a statement from the Better Cotton Initiative, “an industry group promoting sustainability and labour standards”, which counts H&M and other major brands such as Adidas, Burberry, New Balance, Nike, and Zara as its members. At the time, China took no action.
In December 2020, The BBC published an investigation called “China’s tainted cotton”; reporting that hundreds of thousands of Uyghurs and other minorities are being forced into arduous, manual labour in the vast cotton fields of Xinjiang. The US blocked imports of cotton from Xinjiang in early December. The Guardian soon reported more than three million people were forced to pick cotton; making the allegations of human rights abuses more widespread than originally thought.
On 22 March 2021, several Western nations (the US, UK, Canada and EU) imposed sanctions on China in what Al Jazeera called “coordinated action to pressure China on Uyghur policies”. This triggered a furious response from the Chinese Communist Party (CCP), which governs the nation. New Zealand and Australia supported the sanctions but did not impose their own.
In the following days, the CCP-backed Communist Youth League of China found the statement on the H&M website condemning the use of alleged forced labour, and made it (alongside Nike, which had voiced similar concerns) the subject of a boycott in China. Within 24 hours, the H&M online shops became blocked in China, physical stores (which remained open) were removed from digital maps, and it became impossible to order a rideshare car via an app to any of the stores. By the end of March, more than 20 H&M stores in China had been closed, reported The New York Times.
Burberry, Adidas, Converse and others were then targeted in the boycott. China began to champion local brands instead, through its “support Xinjiang cotton” campaign. The Lowy Institute suggested this signalled a hardened “us-versus-them” dichotomy, showing that China sees little chance in mending ties with the West. Accordingly, this represents, “an attitude that will leave foreign businesses in China with little room to manoeuvre.”
New Zealand connections
As far back as December 2020, Kiwi brands such as Macpac, and AS Colour, expressed concern over Xinjiang cotton. Newsroom reported that the former two brands had boycotted the cotton’s use, while the latter was reviewing its relationship with a Dunedin importer Silk Sensation, that advertised itself as using Xinjiang cotton. New Zealand’s Ministry of Foreign Affairs and Trade (MFAT) warned local companies doing business with Xinjiang to “review relevant information carefully and, if necessary, seek independent legal advice”.
However, no New Zealand brands have thus far been targeted by the CCP. In February 2021, Newshub reported that China was comparing Xinjiang to New Zealand in state media outlets, rejecting all claims of slave labour and saying, “Xinjiang is the same as other great farming regions of the world from Italy to New Zealand, where travellers are often impressed by the local spirit of hard work, passion for life, and desire to succeed." The CCP maintains all accusations of forced labour in Xinjiang are “malicious lies and fabrications”.
Who stands to lose most?
The market value of H&M slumped by about 4.8 billion yuan (USD$730,938 million) in late March. Adidas and Nike saw their combined market value dissipate by more than 70 billion yuan or USD$10.7 billion. This hurts these multinational companies badly – Adidas was expecting a 20-30 percent growth in China in 2021, according to Global Times.
Global consumers, too, lose out because the “us-versus-them” row between China and the West will disrupt the supply chain and push up costs, according to Malaysia’s The Star in the article “Winners, losers in Xinjiang cotton row”. As brands source cotton from places they believe to be more ethical, the result is time and money spent, which will be passed onto the consumer to meet margin minimums on garments.
Some brands may profit from taking sides with the CCP’s stance, conversely. Clothing brands Fila China and Muji China have released pro-China stances and are enjoying Chinese public support for it, reports The Star. Anta, the Chinese sportswear brand often called the “Nike of China”, is “doubling down on buying the controversial cotton and welcoming disaffected Nike and Adidas customers with open arms”, reports Fortune. Anta was a member of the Better Cotton Initiative but announced it will quit the organisation. Anta has continued to buy Xinjiang cotton and has received widespread support in state-run media, and seen its shares surge 5.6 percent as Chinese consumers back the firm, according to the South China Morning Post.
How do you know if cotton is Xinjiang cotton?
Given the fact 20 percent of cotton has been coming from Xinjiang, it’s likely every one of us owns garments made from the material source of this controversy. According to The BBC, however, tracing cotton to a factory is extremely difficult overall, and impossible for a consumer to do: “a retailer commissions a shirt from a supplier, who buys the fabric from a mill, which buys the yarn from a spinning mill, which bought the cotton from a broker, who bought cotton from any number of farms”.
While some brands such as Skechers (USA) have completed audits and found no evidence of Xinjiang cotton in its products, New Zealand brands like Silk Sensation told Newsroom they cannot afford to audit their Chinese supplier.
Therefore, the only way a consumer like you or I can be confident an item of clothing is not made with Xinjiang cotton is if it is marked as Fairtrade cotton, Soil Association organic cotton, or been through another sustainable certification process.
- Asia Media Centre