Walmart’s big-box discount store Sam’s Club held a conference call on Wednesday in which it denied pulling products from its shelves because they were sourced to Xinjiang, where the oppressed Muslim Uyghurs are sold as slaves by the Chinese Communist regime.
Walmart, like many other corporations with extensive business interests in China, appears to be concerned about a backlash from Chinese consumers and possible retaliation from the Communist Party, as China uses its economic leverage to silence Western companies that dare to acknowledge the genocide of the Uyghurs.
On the day before Christmas, Chinese social media users erupted in fury because they believed Sam’s Club had removed items sourced to Xinjiang. Human rights activists have long urged Western companies to ensure none of their products or supplies are sourced to Xinjiang’s concentration camps and in December the U.S. passed a law requiring importers to prove their goods are not tainted by forced labor.
The primary cause of the outraged response on Chinese social media appears to have been a set of screen captures that showed no search results on the Sam’s Club app for the word “Xinjiang.” Some users claimed they were previously able to find produce from Xinjiang at Sam’s Club by searching for the name of the province, so the blank search results could only mean Walmart had de-stocked them.
This online freakout occurred within 24 hours of President Joe Biden signing the Uyghur Forced Labor Prevention Act into law, leading some observers to wonder if the response was an orchestrated shot across Walmart’s bow by the Chinese Communist Party. Others speculated Walmart might really have de-stocked Xinjiang items – or at least removed the term from its search engines – in response to the new law.
In either case, the topic pulled 170 million views in a single day on Weibo – China’s alternative to Twitter, which ordinary citizens are banned from using, although Communist Party operatives can use it to transmit their propaganda to the free world. Many Weibo commenters claimed they were canceling their Sam’s Club memberships.
A week later, on New Year’s Eve, the regime in Beijing used its “anti-corruption watchdog” agency, the Central Commission for Discipline Inspection, to send Walmart a stern warning that it will suffer from “practical actions” if it does not “respect the feelings of the Chinese people.”
“To take down all products from a region without a valid reason hides an ulterior motive, reveals stupidity and short-sightedness, and will surely have its own bad consequences,” the commission said.
Walmart studiously avoided making public comments on the situation, but on Wednesday Reuters published an insider account of a closed conference call in which an enigmatic Chinese regional representative of Sam’s Club named “Zhang” said the controversy was a “misunderstanding.”
“We didn’t defend ourselves, because, there is no reason to be afraid of things we haven’t done,” Zhang said to explain Walmart’s reluctance to respond over the past week.
According to Zhang, the Chinese social media users who launched the controversy were mistaken, because the Sam’s Club app never allowed searches for items based on the names of locations like “Xinjiang.” This would imply the claim that customers were once able to search for “Xinjiang apples” or similar goods was a deliberate lie.
The Sam’s Club representative also said the much-ballyhooed wave of Chinese customers canceling their memberships in outrage amounted to just a few hundred people, a tiny fraction of the company’s 4.4 million Chinese members. Walmart as a whole reported $11.43 billion in revenue from China for the previous fiscal year.
“It has negative impact on our membership base, but time will prove everything in the future. We think the potential in China is very big,” Zhang said of the cancellations.