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As the furore over Xinjiang cotton shows, companies cannot escape politics

March 29, 2021, 10:05 AM UTC

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Good morning. David Meyer here in Berlin, filling in for Alan.

The furore over Xinjiang cotton just won’t go away, and Western fashion houses can’t win.

After having been disappeared from mapping apps in China last week, H&M is now seeing some of its stores actually being shut down by their landlords. An old statement by the Swedish multinational, expressing worries over reports of forced labor in the region, was recently unearthed, leading to huge pushback within the country over H&M’s perceived disrespect.

Meanwhile, Hugo Boss is busy tying itself in knots. First it said it wouldn’t use Xinjiang cotton, then its Weibo account said last week that it would “continue to purchase and support Xinjiang cotton,” then that post was deleted and the company now says it “has not procured any goods originating in the Xinjiang region from direct suppliers.”

Chinese celebrities are cutting ties with Hugo Boss over the slight. The likes of Nike, Burberry and Adidas are also being hit by consumer boycotts.

According to Chinese officials, the answer is for companies to stay out of politics. Here’s Xinjiang government spokesman Xu Guixiang: “I don’t think a company should politicize its economic behavior. Can H&M continue to make money in the Chinese market? Not anymore.”

However, these firms also have the U.S. and its allies on the other side, banning Xinjiang exports that are the product of forced labor.

“American consumers, and consumers everywhere, deserve to know that the goods they are buying are not made with forced labor and many companies are standing up for consumers and for human rights,” the Commerce Department said Friday, decrying the Chinese boycotts.

I have no doubt that most companies would dearly love to steer clear of playing politics. But you can only navigate the middle path (hello to Apple, which scrubbed H&M stores from its Maps app in China) for so long—particularly when the two sides you’re trying to straddle are moving further apart, and especially when basic human rights are the central issue.

Ultimately, as Thomas Mann once wrote, everything is politics. News below.

David Meyer


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Greener crypto

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This edition of CEO Daily was edited by David Meyer.