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Contending With China’s Clout – WWD

Damn if you do, damn if you don’t.

Such is the uncomfortable situation of countless companies doing business in China found myself. Matters may change – Hong Kong protests, Xinjiang cotton, Tibet or Taiwan – but one thing remains steadfast is Beijing’s willingness to use its economic might to attract companies to the world’s vision.

In the past, it could have been an option for companies to circumvent geopolitics by avoiding the setting China instead of catering to the Chinese when they shop abroad. But the closed borders caused by the pandemic have eliminated that option, and as H&M, Nike, Adidas, Versace and most recently Walmart and Intel have noticed, the consequences of disrupting Communist Party ideology Production can be fast and harsh. For more proof, look at China’s criticism of Walmart’s “stupidity and short-sightedness” about removing products made in China. Xinjiang from its online website and warehouse club shelves.

For a while, regardless of China’s push, companies had to line up to maintain market access even as reports regarding their human rights records in Hong Kong and New Zealand came to light. Cuong. But a comprehensive US ban enacted in December on all imports from Xinjiang – which the US and some European legislatures consider an ongoing genocide – will force companies to have to define their position more clearly.

Now, the world’s largest economy’s compliance with the law on the matter is directly against the second largest economy, as chipmaker Intel was quick to discover. Their requirement of suppliers to avoid Xinjiang to comply with US regulatory requirements has drawn major criticism in China from the media as well as consumers.

This development and the global reaction to Peng Shuai – the tennis star who disappeared and is suspected to have not been raped despite re-appearing in public – may signal a change in attitudes. for China is happening.

“WTA [World Tennis Association] Joanna Chiu, author of the recently published book “China Unbound: A New World Disorder,” points out that there has been a stronger response, immediately suspending all tournaments in China, depriving them of competition. millions of dollars. “That’s in contrast to many of the world’s biggest companies, including the world’s biggest luxury brands or other sports associations like the NBA. I think the next company that responds to criticism of the Chinese government or criticism of Chinese nationalists with an over-the-top apology may receive a more intense backlash from the Chinese government. international consumers for failing to protect company values. “

She added: “It also reflects the growing international community’s awareness of human rights issues in China. “The fact that people can disappear in China has been a news story for many years – those are the disappearances of booksellers in Hong Kong, two Canadian Michaels detained for Huawei, and with the Law. National Security in Hong Kong now even includes examples of American citizens arrested there. But Peng Shuai’s popularity and being a known face has changed the stereotype that many people still don’t care about.”

The willingness to push back may reflect deep frustration with the country over its initial handling of the COVID-19 pandemic. A 2020 study by the Pew Research Center found that unfavorable views of China scored the highest in many countries since Pew began probing the topic more than a decade ago.

The next flash point could be at the Beijing Winter Olympic Games. Due to begin in February, the Olympics have been subject to a diplomatic pause from the US, UK, Canada and Australia over Xinjiang. Japan also announced it would not send an official government delegation to the Olympics but stopped short of calling it a boycott.

“It is long overdue to understand – not just in China – concerns about forced labor around the world,” said Chiu. “One way to manage the situation more diplomatically is to make these systems more secure so that they apply more broadly than just to meet regulatory obligations towards Xinjiang. Companies should commit to eliminating forced labor whether it is in Xinjiang, Bangladesh or any other region. “

Related:

US Senate Passes Widespread Uighur Forced Labor Bill

US boycott, many reports point to persistent Xinjiang cotton crisis

https://wwd.com/business-news/business-features/what-to-watch-china-clout-1235024475/ Contending With China’s Clout – WWD

Linh

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