International Clothing Brands Scramble to Leave China’s Xinjiang

Stephen Lamar, head of the American Apparel and Footwear Association (AAFA), told a session of the U.S. House Ways and Means Subcommittee on Trade on Thursday that import bans on products from China’s Xinjiang province could “wreak havoc” on supply chains.

Fear of such upheavals, and popular revulsion over China’s use of oppressed minorities as slaves, is driving more companies to think about pulling operations out of Xinjiang.

U.S. Customs banned imports from a number of specific suppliers based in Xinjiang this week but may impose even broader bans on goods suspected of being produced with forced labor, including cotton and textiles.

Lamar was not in favor of the disruptions he described to the House subcommittee. He warned that a blanket ban would be difficult to enforce and would “wreak havoc on human rights, economic development, and legitimate supply chains, themselves already battered by Covid-19 [Chinese coronavirus] all over the world.”

“As a country, we simply do not have the capability or capacity to implement or comply with or enforce a blanket WRO [Withhold Release Order] or the proposed legislation right now,” he said, pointing out that Xinjiang currently produces 20 percent of the world’s cotton, and the origin point of products like cotton can be difficult to trace through the international marketplace.

A 2019 report by the Center for Strategic and International Studies (CSIS) called Connecting the Dots in Xinjiang: Forced Labor, Forced Assimilation, and Western Supply Chains noted that some 30 percent of American apparel imports come from China and, since 80 percent of China’s cotton comes from Xinjiang, a deeply troubling amount of the apparel sold to American consumers is tainted by forced labor.

Lamar’s AAFA responded to that report by praising the “long relationship with China” that allowed it to “provide quality and value to our global consumers, produce garments under socially responsible conditions, and support millions of jobs in the U.S. and China through global value chains.”

The AAFA said it would “respectfully ask the Chinese government to facilitate all due diligence measures” needed to resolve questions about forced labor. After Lamar’s testimony this week, the association released a much less optimistic statement that said the problem in Xinjiang is “bigger than any one industry can handle, and requires sustained government to government pressure.”

Chinese buyers have recently been on a shopping spree to buy cotton harvesting equipment, placing huge orders with companies like John Deere to keep Xinjiang’s industry rolling, even as complaints about the enslavement of minority groups grow louder.

Human rights activists are urging major brands to avoid the “grave risk of forced labor” by cutting all ties with Xinjiang suppliers. In July, over 200 activist groups joined together to urge major apparel manufacturers and retailers to stop sourcing cotton, textiles, and clothing from Xinjiang.

“It is clear and irrefutable that China is committing large scale human rights abuses, including forced labor, against the Uyghurs and other ethnic minorities. The Chinese Communist Party [CCP] continues to deny this reality, but we must not. The U.S. must lead in condemning and confronting these horrific practices. Our most powerful tool is strictly enforcing our ban on products made with forced labor so that these products do not enter U.S. markets,” Rep. Vern Buchanan (R-FL), ranking Republican on the House Ways and Means Trade Subcommittee, said during his opening remarks at the session Lamar addressed.

Buchanan praised bipartisan cooperation on the issue and called on American businesses to “establish and strengthen best practices to tighten supply chains so they can confidently prevent their suppliers from utilizing forced labor or find new suppliers.”

“Our trading partners must step up and follow our lead in condemning China and cracking down on imports of products made with forced labor,” he added. “It’s no secret that China is willing to use all tools at its disposal to intimidate and punish countries that oppose its illegal and immoral human rights abuses. I understand the immense amount of economic power China can exert, but our allies must stand firm with us in condemning these appalling abuses.”

An Australian report published in March implicated 83 foreign and Chinese companies as directly or indirectly benefiting from the use of forced Uyghur labor. Some 80,000 Uyghurs have been shipped out of Xinjiang province to toil in factories located elsewhere in China.

Testimony before a congressional commission on China in October 2019 made it clear that determining if Chinese goods were made with forced labor is all but impossible, citing the example of discount retail giant Costco buying over a million units of baby clothing and blankets that were made by Hetian Taida, a Chinese corporation subsequently banned from exporting to the United States for using slave labor from Turkic minorities.

Adrian Zenz of the Victims of Communism Memorial Foundation warned at that 2019 hearing that China could use forced labor to “undercut global prices and turn ‘Made in Xinjiang’ into a multi-billion-dollar business model.”

According to the coalition of Uyghur and human rights groups calling for a boycott of Xinjiang, the threat of retaliation against whistleblowers by Chinese authorities “makes due diligence through labor inspections impossible and virtually guarantees that any brand sourcing from the Uyghur region is using forced labor.”

The coalition said in a July statement that “virtually the entire apparels industry is tainted by forced Uyghur and Turkic Muslim labor.”

“If leading brands and retailers are prohibited from importing garments with content from Xinjiang into the most important consumer market for clothing — which is the US — then the implications for the Chinese government and its economic development strategy in Xinjiang are enormous,” said Scott Nova, executive director of the Workers Rights Consortium, a member of the Coalition to End Forced Labor in the Uyghur Region. 

Nova said last week that apparel companies must insist on full transparency from all suppliers so they can tell where their materials are coming from, especially cotton, which has an especially opaque supply chain at present.

U.S. sportswear company Badger was one of the early companies to stop sourcing materials from China due to concerns over forced labor in January 2019. Badger made its decision after its supplier, Xinjiang-based Hetian Taida, was depicted using workers from the notorious Uyghur “re-education camps” on Chinese state television.

Cotton On and Target Australia both said they would stop sourcing cotton from Xinjiang in October 2019. Cotton On’s supplier, Litai Textiles, was located only a few miles away from one of the huge Uyghur concentration camps. 

Sweden’s huge H&M fashion company made a splash on Tuesday by announcing it would end its relationship with Chinese yarn supplier Huafu — the same supplier Target Australia stopped doing business with — due to concerns over slavery. H&M said it would no longer source any cotton from Xinjiang. When Target Australia made its announcement last year, H&M said its investigation of Huafu “showed no evidence of forced labor.”

IKEA said in April that the organization that supplies it with cotton — an organization also used by H&M — would stop approving shipments of cotton from Xinjiang.

Several other companies have issued dismissive statements similar to the one H&M issued before changing its mind. The largest of them is Nike, which insists it is “conducting ongoing diligence” with Chinese suppliers, and does not have relationships with several of the forced-labor-using suppliers it was accused of purchasing from in the March 2020 report from Australia.

“Our ongoing diligence has not found evidence of employment of Uyghurs, or other ethnic minorities from XUAR [the Xinjiang Uyghur Autonomous Region], elsewhere in our supply chain in China,” Nike said in its most recent statement on the matter.

Two of the companies most frequently castigated by Uyghur rights activists are Japanese clothiers Muji and Uniqlo, which actually bragged about obtaining cotton “delicately and wholly handpicked in Xinjiang,” as Muji’s advertising put it. Uniqlo boasted its clothes are “made from Xinjiang cotton, famous for its superb quality.”

“The idea that a company would use that as a selling point for a product, especially at a moment when there are growing and legitimate concerns about forced labour in that region — I’m trying to come up with the right word here — is pretty mind-boggling,” Sophie Richardson of Human Rights Watch said of the advertising from Muji and Uniqlo. 

Reuters noted in August that most apparel companies simply refuse to say where they obtain their supplies, or claim they do not know.

Muji and its parent company Ryohin Keikaku were cited as bizarre exceptions that brag about using Xinjiang cotton in their advertising, while shoe and apparel maker Puma disclosed its supply chains and said it would direct all suppliers to begin using cotton certified by the Better Cotton Initiative, which no longer approves cotton from Xinjiang. H&M and IKEA’s suppliers also require certification from the Better Cotton Initiative.

“Wise corporate managers might want to get ahead of media coverage and any restrictions imposed by governments. More ethical cotton sourcing may be a hassle for them now. But turning a blind eye to the issue could end up being a false economy,” warned Dasha Afanasieva, writing for Reuters.