China said it would investigate US apparel maker PVH Corp for suspected boycotting of cotton sourced from Xinjiang, a probe that could lead to punishment for the parent company of Tommy Hilfiger and Calvin Klein.
The Chinese Ministry of Commerce asked PVH to submit a written response in 30 days on whether it had adopted “discriminative measures” against Xinjiang-related products in the past three years, according to a statement posted on the ministry’s Web site on Tuesday.
If found at fault, PVH could be added to an “unreliable entity list” that prevents offending foreign companies from trading with China, subjects them to fines or revokes their staff’s work permits, according to a 2020 order.
Photo: Reuters
In a separate statement, the ministry said the company is suspected of “boycotting Xinjiang cotton and other products for no reason,” accusing it of damaging Chinese companies’ rights and interests as well as China’s sovereignty, security and development interests.
PVH said in an e-mail that it is in contact with the ministry and “will respond in accordance with the relevant regulations.”
The company said it strictly complies with laws in all countries where it operates and declined to comment further.
A 2022 supply chain report from PVH said that it did not source from Xinjiang either directly or indirectly.
Tommy Hilfiger and Calvin Klein have a presence in China, and PVH still sees the country as “an important growth engine,” executives said on a recent earnings call.
However, its sales growth has suffered “a trajectory change” in China, falling to the high-single digits in the May quarter after a more than 20 percent rise during the fiscal year ending just a few months before, as weakening consumer sentiment persisted. In the most recent quarter, sales turned to a 1 percent decline.
Tommy Hilfiger’s official store on e-commerce platform Tmall posted annual sales of about 310 million yuan (US$44 million) for the 12 months ended last month — a drop of 12 percent year-on-year — according to data provider Hangzhou Zhiyi Technology Co (杭州知衣科技). Calvin Klein posted annual sales of 578 million yuan on its Tmall store for the same period, up 12 percent from a year earlier, according to the data. Tmall is owned by Alibaba Group Holding Ltd (阿里巴巴).
US and European companies have been under pressure to pull away from factories that make clothes and other products in Xinjiang, where labor groups have documented alleged forced labor camps and other poor working conditions. China disputes these claims.
The US enacted the Uyghur Forced Labor Prevention Act in 2021, which bars imported goods partly or wholly made in Xinjiang unless companies can prove the products have no ties to forced labor. Last month, the US expanded the list of Xinjiang-linked entities to 73 as worries over forced labor in China hang over the apparel industry.
China has so far publicly sanctioned five US companies using the entity list, including Lockheed Martin and Raytheon Technologies over their arms sales to Taiwan. However, such moves are largely symbolic as these firms do not do business in the country.
PVH, on the other hand, owns brands that have a large retail presence in the world’s second-largest economy.
“This investigation may target the textile sector, but now this door has been opened, companies in every sector are looking at this case and doing risk assessments of their own,” said Sean Stein, chair of the American Chamber of Commerce in China and the cochair of Covington and Burling’s China public policy practice.
PROTECTIONISM: China hopes to help domestic chipmakers gain more market share while preparing local tech companies for the possibility of more US sanctions Beijing is stepping up pressure on Chinese companies to buy locally produced artificial intelligence (AI) chips instead of Nvidia Corp products, part of the nation’s effort to expand its semiconductor industry and counter US sanctions. Chinese regulators have been discouraging companies from purchasing Nvidia’s H20 chips, which are used to develop and run AI models, sources familiar with the matter said. The policy has taken the form of guidance rather than an outright ban, as Beijing wants to avoid handicapping its own AI start-ups and escalating tensions with the US, said the sources, who asked not to be identified because the
Taipei is today suspending its US$2.5 trillion stock market as Super Typhoon Krathon approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed-income trading, statements from its stock and currency exchanges said. Yesterday, schools and offices were closed in several cities and counties in southern and eastern Taiwan, including in the key industrial port city of Kaohsiung. Taiwan, which started canceling flights, ship sailings and some train services earlier this week, has wind and rain advisories in place for much of the island. It regularly experiences typhoons, and in July shut offices and schools as
Her white-gloved, waistcoated uniform impeccable, 22-year-old Hazuki Okuno boards a bullet train replica to rehearse the strict protocols behind the smooth operation of a Japanese institution turning 60 Tuesday. High-speed Shinkansen trains began running between Tokyo and Osaka on Oct. 1, 1964, heralding a new era for rail travel as Japan grew into an economic superpower after World War II. The service remains integral to the nation’s economy and way of life — so keeping it dazzlingly clean, punctual and accident-free is a serious job. At a 10-story, state-of-the-art staff training center, Okuno shouted from the window and signaled to imaginary colleagues, keeping
Arm Holdings PLC approached Intel Corp about potentially buying the ailing chipmaker’s product division, only to be told that the business is not for sale, according to a source with direct knowledge of the matter. In the high-level inquiry, Arm did not express interest in Intel’s manufacturing operations, said the source, who asked not to be identified because the discussions were private. Intel has two main units: A product group that sells chips for personal computers, servers and networking equipment, and another that operates its factories. Representatives for Arm and Intel declined to comment. Intel, once the world’s largest chipmaker, has become the
RSS