The Chinese government is upset with the American company PVH, whose brands include Calvin Klein and Tommy Hilfiger, for discriminating against products from Xinjiang. The Xinjiang region “produces a fifth of the world’s cotton.”
Meanwhile, American law is telling American companies to discriminate against products from the region of Xinjiang because of the slave labor commonly relied on there (“For Companies in China, Pulling Out of Xinjiang Poses ‘Messy Dilemma,’ ” The New York Times, October 4, 2024).
At issue is whether PVH violated Chinese law by pulling back from purchasing cotton or garments from Xinjiang, where researchers have cited evidence of forced labor, mass arrests and confinement to re-education camps among the region’s predominantly Muslim ethnic groups, particularly the Uyghurs.
The investigation [of PVH] has made clear that China will not tolerate companies that shun Xinjiang. That puts some multinationals in a legal vise grip because a growing number of governments, including the United States and the European Union, restrict or ban imports from Xinjiang….
In the U.S., one of the relevant laws is the Uyghur Forced Labor Prevention Act, which is designed to prevent “goods made with forced labor in the Xinjiang Uyghur Autonomous Region of the People’s Republic of China [from entering] the United States market.”
“European companies find themselves increasingly caught between a rock and a hard place,” the European Union Chamber of Commerce in China said in a statement. “If they cease operations in, or sourcing from, regions like Xinjiang they may face a severe backlash from both government and consumers in China,” the chamber continued. “If they stay, they risk negative consequences from their home and other international markets.”
This is the kind of thing that an Italian lady I once knew would have called “baloney sauce.” What dilemma? There is no dilemma.
The Chinese Communist Party is upset because foreign companies that had rewarded the use of slave labor by Xinjiang companies by giving Xinjiang companies massive amounts of business are being forced by foreign governments to stop rewarding this use of slave labor. CCP slave drivers are therefore determined to make things difficult for the foreign firms that by their obedience to their own governments are now complicit in no longer being complicit.
And?
When your company must make a choice between the negative consequences of supporting slave labor and the negative consequences of no longer supporting slave labor, and you have the ability to pack up and leave the slave-driving country, there is no dilemma.
In light of the Chinese government’s retaliatory targeting of foreign firms, these firms must apparently make wrenching adjustments. PVH and other foreign firms may need to leave China altogether, and suddenly, instead of gradually and partially.
Well, do that. It’s a big world.
