Major Japanese apparel makers and other companies are in a dilemma over Xinjiang cotton, considered one of the best cottons in the world.
In addition to its high global esteem, Xinjiang cotton is seen as symbolizing China’s repression of ethnic minority Uyghurs, mostly Muslim, in the Xinjiang Uyghur autonomous region. Users of the cotton increasingly face a backlash from the international community.
In May, it was learned that the United States had blocked imports of shirts for Fast Retailing Co.’s Uniqlo casual wear chain, alleging that they were made from Xinjiang cotton. The U.S. Customs and Border Protection took the action against Uniqlo in January on suspicion of violating a U.S. ban on the import of goods from the Chinese region, where forced labor is reportedly practiced.
Uniqlo denied the U.S. allegations, saying that the shirts were made from cotton produced outside China and sewn at its plant in the country. The clothing chain also said it had not confirmed any use of forced labor in the production process for the cotton it uses.
Under the new U.S. rules, however, it is not enough for importers to prove that cotton they use was not made in Xinjiang. They are required to provide evidence that there has been no trade whatsoever with the Xinjiang Production and Construction Corps, a Communist Party of China-affiliated economic and paramilitary organization in the region, at any stage of the marketing channel after production.
“Now that supply chains are spread across the world, it is almost impossible to prove the absolute absence of any deal with XPCC,” said a Japanese trading house official handling textiles.
In April, a French nongovernmental organization supporting Uyghurs filed a complaint against Uniqlo’s unit in France, Inditex, the Spanish owner of the Zara apparel retail chain, and two other global apparel makers, claiming that they were benefiting from forced labor in Xinjiang.
Tadashi Yanai, president and chairman of Fast Retailing, came under fire after he declined to comment on the complaint, in order to remain “politically neutral.”
After French law-enforcement authorities then launched an inquiry into the four companies for alleged concealment of crimes against humanity, Fast Retailing changed its stance, saying that it would “fully cooperate with the investigation if requested.”
Ryohin Keikaku Co., the retailer and wholesaler of Muji-brand products, initially maintained a hands-off stance on the question of Xinjiang cotton, noting that it had confirmed “no serious legal or other violations.”
In mid-April, the company admitted to the use of the cotton. President Satoru Matsuzaki said, however, “We will continue using Xinjiang cotton with self-assurance as we have found no cases of serious violations.”
Mizuno Corp., a comprehensive producer of sporting goods, announced a decision in May to stop using Xinjiang cotton, while underwear maker Gunze Ltd. was found in June to be considering an end to the use of the cotton. Gunze will adopt an alternative cotton for certain types of socks, while maintaining that it had “discovered no violations such as forced labor” in the production process for the Xinjiang cotton it uses.
Users of Xinjiang cotton face a Catch-22 dilemma. They are criticized by U.S. and European NGOs and investors for low awareness of human rights if they continue using the cotton, but may be forced out of the Chinese market if they stop using it.
Actually, a boycott campaign targeting a well-known international apparel maker has spread in China. In April, sportswear maker Asics Corp. lost its sponsorship of a major marathon race in China after a long silence on the question of Xinjiang cotton.
Apparel and other companies concerned are under growing pressure to make delicate decisions and silence is not an option.