European fashion stocks hit by China Xinjiang row

US and allies announces sanctions on Chinese officials

Chinese state media had singled out H&M on Wednesday over a statement that was reported past year in which the Swedish retailer said it was deeply concerned by reports of accusations of forced labour in Xinjiang, and that it did not source products from the Chinese region. Later, at least three major Chinese e-commerce platforms - Pinduoduo, JD.com and Tmall - stopped selling H&M products.

The Communist Party youth organisation wrote that H&M can not "boycott Xinjiang cotton, while also wanting to make money in China".

People's Daily, the Chinese Communist Party's paper of record, created a hashtag, #ISupportXJCotton, that had generated 1.5 million posts and been viewed 700 million times by Thursday morning on the social media platform Weibo.

On Monday, the United States, the European Union, Britain and Canada announced coordinated sanctions on several Chinese officials responsible for policy in Xinjiang.

Beijing hit back with retaliatory sanctions on European lawmakers, scholars and institutions.

China has launched a PR war with the help of celebrities who are breaking up with Western brands such as Nike, Burberry and H&M over their comments on labour conditions in Xinjiang Uighur Autonomous Region.

H&M shares fell as much as 2.8 per cent in afternoon trading in Stockholm.

Chinese internet users also targeted the Better Cotton Initiative (BCI), a group that promotes sustainable cotton production which said in October it was suspending its approval of cotton sourced from Xinjiang, citing human rights concerns.


BCI members include Nike, Adidas, H&M and Japan's Fast Retailing.

Inditex did not respond to a request for comment.

"Spreading rumours to boycott Xinjiang cotton, while also wanting to make money in China?" Xinjiang, along with other issues, is at the heart of the political tug-of-war between China and the U.S.in recent years. "Either Adidas quits BCI, or get out of China", one internet user wrote.

A security guard stands outside a store of the Swedish fashion retailer H&M at a shopping complex in Beijing, China on March 25, 2021.

For emphasis, she held up a black-and-white photo that she said depicted black slaves harvesting cotton in the United States and compared it to a bright, colour photograph of a cotton field under a blue sky in Xinjiang region.

Hua then held up a second photograph of cotton fields in Xinjiang.

Xinjiang has promoted the application of green agricultural machinery and technologies and actively introduced advanced intelligent agricultural machinery and equipment, including cotton picking machines, high-power tractors, plasma dosing machines, intelligent precise fertilizer matching machines, satellite navigation and automatic driving and unmanned plant protecting machines.

The Global Times, a tabloid affiliated with the ruling Communist Party, quoted the People's Daily as saying, "H&M would rather believe the lies spread by a few people than hear the voices of billions of Chinese people, and would not go to Xinjiang to take a look". Inditex has previously said it does not have any commercial relations in Xinjiang.

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