Giles: All Eyes on China
May 24, 2021 China has for years moved the cotton market. So, we keep an eye on what they are up to as a matter of course. But it seems China has been in the news much more in the past year.
It started with the origins of coronavirus but took a turn toward the cotton world with the announcement that the U.S. would ban cotton originating from the Xinjiang region. That’s the top cotton producing region of China. The sanctions initiated under the Trump administration and continued under the Biden administration targets the region for reported human rights violations against the Muslim Uighurs that live in the northwest part of Xinjiang.
The ban has far reaching effects. U.S. Customs and Border Protection (CBP) is policing the ban and notes the ban applies to products “made in whole or in part” with cotton produced in Xinjiang. Cotton grown there is cut and sewn into garments across Asia. The CBP also notes the ban applies “regardless of where the downstream products were produced.” That means those textiles produced in other countries using Xinjiang cotton are a no-go in the U.S.
To say that’s shaken things up is a great understatement. In an article appearing in the Washington Post titled “U.S. ban On China’s Xinjiang cotton fractures fashion industry supply chain,” the topic is addressed. The article notes: “What’s happening now in the fashion industry is rare in the history of global trade – a multibillion-dollar supply chain splintered almost overnight over a human rights issue.”
Before and after the ban, U.S. brands were taking action to shift supply lines and sourcing. Several include popular companies like Patagonia, Gap, Old Navy, Banana Republic, and Nike.
China has even initiated campaigns against brands participating in the ban or commenting on human rights violations.
H&M, a Swedish-based retailer, has drawn the ire of the Communist country. The company has stores in China which are being closed by their landlords after the company stated concerns about alleged human rights violations. Chinese celebrities and other officials have taken to (or ordered to) social media to blast H&M. After a mass boycott by the Chinese, H&M released a subsequent comment stating China was a “very important market” to the retailer and it wants to be a “responsible buyer in China, and elsewhere.”
China is reacting because the U.S. has taken a stand and others are following suit. Secretary of State Antony Blinken noted in a statement: “Beijing’s attempts to intimidate and silence those speaking out for human rights and fundamental freedoms only contribute to the growing international scrutiny of the ongoing genocide and crimes against humanity in Xinjiang.”
It is good we are taking a stand, but it could make for a bumpy ride in the market at times. In the meantime, you have a way to showcase the fact your cotton is grown in an environmentally and socially responsible way. Check out the U.S. Cotton Trust Protocol. It showcases and proves the reliability of U.S. grown cotton.
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