Broadcasters in China are blurring the logos of any Western brands in their programs in an escalation of a consumer-driven boycott that began after H&M, Nike and others expressed their concerns about reported forced labor in the Xinjiang Uyghur Autonomous Region.
The censorship broadside, which BBC News says has caused delays in the post-production process of TV shows, purposefully obscures telltale swooshes on T-shirts or triple stripes on sneakers appearing on screen. The move sometimes had unintentionally risible results, such as in the case of the “Chuang 2021” reality show, which blurred contestants from head to toe because they were fully outfitted in clothes that betrayed their Western origins. In one episode of the popular variety show, “Sisters Who Make Waves,” the fogged-out shoes of contestants made them appear as if they were floating on clouds.
The move is a clear warning shot to businesses that have long wooed the world’s second-largest economy for its massive 1.4-billion-strong consumer base. In the darkest days of the pandemic last summer, China’s sharp V-shaped recovery served as a critical growth engine that kept many struggling bottom lines afloat. H&M, for instance, derived $1.1 billion in sales from Greater China, its fourth-largest market, in 2020. In December, Nike reported that its revenues for its fiscal second quarter grew 24 percent year over year in Greater China, compared with 1 percent in North America. And just before the kerfuffle began, Burberry had upgraded its full-year profit forecast after it saw a rebound in sales since December, which the luxury house credited to an upswing in demand in China and South Korea.
But China’s efforts to clobber Western brands for siding with their governments, several of which have sanctioned Beijing for suspected genocidal abuses, could backfire, said Marshal Cohen, chief industry analyst, retail, at NPD Group.
“It will hit Western brands selling in China [since that market is] a big part of their growth plan,” Cohen told Sourcing Journal. “But it will hurt China, too, if brands pull out and even more so if they stop producing there. [It’s a] slippery slope.”
Signs of an exodus were brewing even before the Uyghur crisis hit a critical point. In a Gartner survey last year, 33 percent of supply-chain leaders said they had already moved their manufacturing activities out of China, or plan to do so by 2023.
Though brands now find themselves in the challenging position of choosing between their business interests in China and their ethical reputations in North America and Europe, Sheng Lu, assistant professor of fashion and apparel studies at the University of Delaware, thinks Western companies, for the most part, will stand against human-rights violations. This is particularly true of the United States, he said.
“From relevant industry associations’ joint public statements, it is clear that U.S. fashion brands and retailers fully support the U.S. government’s policy actions against forced labor in the apparel supply chain, including the recent Customs and Border Protection Withhold Release Order against cotton products from the Xinjiang region,” Lu said. “I do not think U.S. fashion companies’ compliance with these regulations will change regardless of the social media campaign in China.”
Tensions may flare further, however, if bills broadly outlawing imports from Xinjiang, such as the Uyghur Forced Labor Prevention Act, are signed into law. “We [can] never underestimate the impact of non-economic factors on trade,” he added.
Beijing has repeatedly denied allegations of human-rights abuses against Uyghurs and other Turkic Muslim minorities, calling them “malicious slander.”
“The so-called problem of forced labor is totally a lie fabricated by some organizations and personnel in the United States and the West,” Foreign Ministry spokesman Wang Wenbin told reporters in September.
Still, members of Congress say stricter measures are needed to hold the ruling Communist Party to account.
Last week, Senate Foreign Relations Committee Chairman Bob Menendez (D-N.J.) unveiled a bipartisan agreement on a new “comprehensive” legislation aimed at checking Beijing’s “predatory” global ambitions and investing in “universal values” such as human rights and democracy.
The draft legislation, known as the Strategic Competition Act of 2021, recommends a total of $655 million in Foreign Military Financing funding for the Indo-Pacific region for fiscal years 2022 through 2026, and a total of $450 million for the Indo-Pacific Maritime Security Initiative and related programs for the same period.
“I am incredibly proud to announce this unprecedented bipartisan effort to mobilize all U.S. strategic, economic and diplomatic tools for an Indo-Pacific strategy that will allow our nation to truly confront the challenges China poses to our national and economic security,” Menendez said in a statement. “The United States government must be clear-eyed and sober about Beijing’s intentions and actions, and calibrate our policy and strategy accordingly.”