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Article

30 Mar 2021

Author:
CLAY CHANDLER AND EAMON BARRETT, Fortune

Commentary: Why China’s boycott of H&M, Nike, and other Western brands may blow over

"If history is a guide, China’s boycott of H&M, Nike, and other Western brands may blow over", 30 March 2021

Hong Kong's South China Morning Post reported Monday that Chinese efforts to mobilize a nationwide boycott against Nike and Adidas already seem to be "losing steam." [...]

And yet in the major cities, H&M stores remain open. And by Sunday, the Post reports, Nike and Adidas products were widely available on all major Chinese e-commerce platforms. Meanwhile, China's premier, Li Keqiang proceeded as scheduled with a visit to the plant of a German-Chinese joint venture that makes chemicals used by both brands.

Nike, like H&M, has said it doesn't source cotton from Xinjiang. Michael Schuman argues in Bloomberg that the U.S. sportswear maker is getting lighter treatment than H&M because its products are so popular—accounting for more than a fifth of the Chinese sportswear market. He suggests the controversy over Xinjiang cotton will eventually blow over.

"The reality on the ground," Schuman writes, "is that Beijing can't afford to toss so many foreign companies out of China over Xinjiang cotton or anything else. The leadership still likes to appear open to foreign investment, and the employment, capital and technology it brings, and can't risk scaring off the international business community at a time when global attitudes towards China are already souring."

There's some precedent for that view. In 2016, China tried to strong-arm South Korea into rescinding a decision to deploy a U.S. missile defense system China considered a security threat by punishing Korean businesses. Beijing orchestrated a boycott of autos, electronics, tourism—and even scuttled tours of popular K-Pop bands. China eventually abandoned the campaign, though a primary corporate target, the Lotte Group, was forced to retreat from the China market. [...]

And then there's the case of the National Basketball Association [...] As Schuman argues: "The NBA is simply too popular, and too lucrative, to obliterate over a tweet." [...]

Part of the following timelines

China: 83 major brands implicated in report on forced labour of ethnic minorities from Xinjiang assigned to factories across provinces; Includes company responses

China: Mounting concerns over forced labour in Xinjiang

Brands face boycott in China over decision not to source Xinjiang cotton due to allegations of forced labour