China’s market is essential for many foreign companies. But the province of Xinjiang is becoming increasingly problematic for some. An investigation by the authorities is therefore causing uncertainty.
China is investigating the US fashion group PVH over allegations that it is boycotting cotton and other products from the Xinjiang province, which has been widely criticized for its human rights record. PVH, the owner of the Calvin Klein and Tommy Hilfiger brands, is acting without any factual basis and is thus violating the rights of Chinese companies and China’s development interests, the Ministry of Commerce in Beijing said. The company could end up on a blacklist in China.
According to US media reports, PVH said it was in contact with the Chinese authorities and assured that it strictly adhered to relevant laws in all countries. According to yesterday’s announcement, the Department of Commerce gave the New York-based company 30 days to respond to the accusation that it had taken “discriminatory measures” against products from Xinjiang over the past three years.
EU Chamber: Announcement unsettles companies
The province in the far northwest of China has become a difficult place for foreign companies because there is suspicion that human rights are being violated and people are being forced to work there. The USA and the EU have therefore each issued their own guidelines for companies to check their locations and supply chains in this regard.
The announced investigation has caused concern among companies, the EU Chamber of Commerce in China said today. “European companies are increasingly in a dilemma,” it continued. If they stop their activities in regions such as Xinjiang, they must expect strong reactions from Beijing and consumers; if they stay, they risk negative consequences in other markets or reputational damage.
China’s Foreign Ministry stressed today that Beijing wants to push ahead with the opening of the world’s second-largest economy. So far, only a small number of foreign companies have been affected by the list of “unreliable” companies.
Source: Stern
