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China Power | Economy | East Asia
While China’s efforts to name and shame foreign brands sometimes work, more often than not, brands and businesses simply have to wait out the nationalist outcry.
Coinciding with the sanctions imposed on Chinese officials by Australia, Canada, the European Union, and the United States over reported human rights abuses in Xinjiang, multiple major clothing brands that are members of the Better Cotton Initiative (BCI) – a governance group promoting high standards in cotton production – are facing a nationalist backlash in China for previous statements on dropping the use of Xinjiang cotton over allegations of forced labor in the region.
Boycott of clothing company H&M (Hennes & Mauritz) erupted after the brand’s rejection of Xinjiang cotton was denounced by the Communist Youth League on Weibo. The CCP account stated: “Spreading rumors to boycott Xinjiang cotton, while also wanting to make money in China? Wishful thinking!” Other state media accounts joined to “dianming” (点名) H&M – a term referring to being “picked out” by authorities, a practice commonly employed by the government to direct the narrative and indicate how businesses and opinion leaders should act on issues. The Spanish brand was taken down from online stores and disappeared from online maps. China’s Foreign Ministry spokesperson later stated that “One thing is for sure: the Chinese people wouldn’t allow foreigners to reap benefits in China on the one hand and smear China on the other.”
Yet, having demonstrated that the CCP is “the best and most determined defender of China’s interests” to its domestic audiences, Beijing may have decided to show restraint on the issue. Global Times editor Hu Xijin, whose words often serve as a bellwether of the government’s attitude, publicly advised state institutions and media accounts to “refrain from participating, act with restraint in denouncing the Western businesses, and avoid leading the narrative.” With no more “dianming” to direct online services to act on other brands, authorities seem to have decided to leave the boycott to the people and celebrities. Over 30 Chinese celebrities ended their promotional partnerships with brands that “violate China’s dignity.”
The pullback may indicate the government’s concern that the boycott may ultimately be too costly to continue, since none of the “China-insulting” brands have made apologies despite the pressure. Fashion house Hugo Boss backed away from its pledge to “continue to purchase and support Xinjiang cotton” and later announced that “so far, HUGO BOSS has not procured any goods originating in the Xinjiang region from direct suppliers.” One concern may be that it would be impossible to ban such a significant number of clothing brands given the employment they together generate. Authorities may also be unsettled with the attention brought to Xinjiang, which ha prompted more and more Chinese to ask the question of “just what happened there?” There is also reason to be wary of betting against the businesses’ compliance with other market restrictions, given the recent rollout of government bans in other markets and the concern for corporate social responsibility. Beijing would also hope to prevent brands from pulling out of the 2022 Beijing Winter Olympics since businesses face increasing pressure from rights activists over their participation in the Games.
The question is whether Chinese consumers alone can carry out an effective boycott without the government leading the way for patriotic action. Big brands like Nike and Adidas seem to be capable of riding out the storm. Despite becoming the top trending topic on Weibo and the social pressure on e-commerce platforms to take down the brand, all online and offline Nike stores persisted, with no signs of sales dwindling. In fact, Nike received 330,000 orders in an online pre-sale of its new Dunk Low shoe, which is now sold out. Even the Chinese Football Association seems unprepared to cut ties with Nike despite the social pressure.
While China’s efforts to name and shame foreign brands sometimes work with government-imposed sanctions, more often than not, brands and businesses simply have to wait out the nationalist outcry. This is not the first time consumerism has ultimately triumphed over nationalism in China. Despite having been branded as “anti-China” and seeing their contracts terminated by Chinese celebrities, Coach, Versace, Givenchy, Swarovski, and Lancome have picked up new Chinese celebrities as brand ambassadors. Canada Goose’s revenue numbers have gone up since China boycotted the brand over Canada’s arrest of Huawei executive Meng Wanzhou in Vancouver; the luxury brand is now opening four new stores in China.
In the latest round of action, the Nike and Adidas apps were removed from several app stores in China, but online sales from e-commerce platforms are what actually matter, and those have endured. Without government directions to impose the “H&M” treatment on other major brands, consumerism may soon declare victory over nationalism.
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