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Swedish retailer H&M is facing a sudden consumer boycott in China after a Chinese Communist Party affiliate—the Communist Youth League—resurfaced on Wednesday a months-old statement expressing “deep concern” over reports of forced labor in western China’s Xinjiang Uighur Autonomous Region.
“Spreading rumors to boycott Xinjiang cotton while trying to make money in China? Wishful thinking!” the Communist Youth League wrote in a post on Weibo—China’s version of Twitter—while sharing an image of a statement on the issue that H&M published in English last year.
As of Thursday, the Weibo post had been liked over 400,000 times. Access to H&M’s storefronts on China’s e-commerce sites such as Taobao and JD.com have been blocked, and local celebrities have publicly severed ties with the brand.
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H&M appears to have removed the offending statement from its website but published a new statement on the brand’s Chinese website, saying its actions on Xinjiang are apolitical and that the company “respects Chinese consumers as always.” H&M’s careful response highlights the delicate balancing act all brands in China undertake; if they oppose Beijing in any way, they risk losing access to China’s lucrative market of 1.4 billion people.
H&M, which operates more than 500 stores in China, isn’t alone in its struggle. Chinese consumers began targeting Nike on Thursday for its old statements on Xinjiang too, signaling the string of other brands that issued similar statements on Xinjiang last year could face backlash.
What happened?
Since 2017, numerous reports have detailed Beijing’s persecution of the minority ethnic Uighur population in China’s Xinjiang region, documenting human rights abuses that include forcibly detaining Uighurs in cramped “reeducation camps,” where the detainees, most of whom are Muslim, are indoctrinated with party ideology.
The mounting allegations of Beijing’s abuses in Xinjiang—which the U.S. State Department labeled “genocide” in January—pose a dilemma for global fashion brands. China accounts for some 20% of global cotton production, and, according to China’s National Bureau of Statistics, 80% of that comes from Xinjiang.
In March last year, the Australian Strategic Policy Institute (ASPI) reported that detainees from these camps, as well as other minority groups from the region, were being forced to work in factories around China as well as in the cotton fields of Xinjiang. ASPI listed several fashion houses, including H&M, as “potentially benefiting” from forced labor, prompting many brands to publish statements distancing their businesses from the region.
In October last year, the Better Cotton Initiative (BCI)—a nonprofit organization that certifies cotton farms as organic, sustainable, and free of labor abuses—halted operations in Xinjiang, too. The halt meant that brands that had committed to only sourcing BCI cotton could no longer source cotton from Xinjiang.
Why now?
Beijing has denied charges that its policies in Xinjiang are oppressive and extolled government labor programs in the region as part of a successful poverty alleviation campaign that provides paid jobs to rural residents. But as global governments continue to push the issue, Beijing has begun to retaliate in kind.
On Monday, the EU sanctioned four Chinese officials for their conduct in Xinjiang, marking the first time the European bloc has taken punitive action against China since 1989. Canada and the U.K. soon followed suit and sanctioned the same four individuals while the U.S., which had already sanctioned two of them, slapped restrictions on the other two as well.
Beijing’s response was swift. China’s Foreign Ministry announced sanctions against 10 European individuals and four entities on Monday, including five members of the European Parliament and two academics. Those facing sanctions are prohibited from traveling to China or doing business with any Chinese entities.
Then on Wednesday, the Communist Youth League shared H&M’s statement from last year, prompting a consumer backlash against the European brand.
Who’s next?
Consumer boycotts are among Beijing’s subtler tools of retaliation, leveraging the country’s massive spending power to inflict economic damage on brands and even entire countries. Since 2017, Italian fashion house Dolce & Gabbana, the NBA, the English Premier League, Apple, and even model Gigi Hadid have suffered some form of boycott in China, typically over an issue of national pride.
The extent to which Beijing is actively involved in each boycott is often blurry, as some movements appear more organic than others, such as the 2018 episode in which consumers denounced as racist a Dolce & Gabbana advertisement that featured a Chinese model struggling to eat pizza with chopsticks.
Other times, Beijing’s hand in fanning nationalist sentiment is more obvious. Last year, as relations between Beijing and Canberra soured, China’s ambassador to Australia warned that consumers might boycott Australian wine and beef in response. But instead, Beijing levied heavy import duties on those products, torpedoing the trade.
Some Chinese consumers revel in boycotts. On Thursday, as Nike was singled out for its statement regarding Xinjiang, nationalistic netizens began burning pairs of Nike shoes and posting videos of the fires online. In the statement Nike appeared to publish last year, the sportswear brand said it is “concerned about reports of forced labor” in Xinjiang, while maintaining that the brand doesn’t source any materials or use any labor from the region.
In its report last March, ASPI listed some 20 fashion brands and roughly 60 other companies as having potential ties to forced labor in Xinjiang—including Abercrombie & Fitch, Calvin Klein, Muji, Ralph Lauren, and Skechers.
Many of those brands issued statements at the time to distance themselves from Xinjiang and refute ASPI’s suggestion of benefiting from forced labor. Now those statements put them at risk of retaliation in China.
On Thursday, the previous statement issued by Calvin Klein parent company PVH, in which the group said it was “deeply troubled” by reports of abuses in Xinjiang, was no longer accessible through its website. PVH shared with Fortune a link to that statement last week.
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