Xinjiang cotton: H&M and Nike’s differing fates hold lessons for global brands
- Far from frantic, the boycott movement is reasoned, controlled and firmly aligned with China’s vision of its tech-empowered economic ascendancy
- Nike is protected from wrath for now because it fills a gap in wearable tech in China’s value chain, especially ahead of the Olympics – unlike H&M
Why were there such starkly different responses to H&M and Nike? Both companies made the same decision to remove Xinjiang cotton from their supply chains. The difference is that fashionistas can easily find alternatives to H&M in any Beijing mall.
Nike, to China’s fashion garment industry, is like chips to China’s telecoms industry.
It is increasingly important for global brands to understand how to survive the challenges of the Chinese market. China is expected to surpass the US as the world’s largest importer by 2025, consuming nearly half of all luxury goods. China’s economic right to consume is increasingly an expression of its economic might.
“If Tesla used cars to carry out espionage activities in China or anywhere, we will get shut down,” Musk assured senior Chinese leaders at the China Development Forum.
Musk expects China to become Tesla’s largest market, but Tesla cars are now banned for Chinese military and key public sector employees, including in state-owned enterprises, due to its camera technology.
Brake on Tesla an example to others
China is hardly likely to hand the crown of autonomous driving technology to a US company.
The next wave of global technology, from AI and telecommunications to biotechnology, should be built on Chinese standards over the next 15 years, a mission laid out in “China Standards 2035”.
As Chinese companies close in on the tech gap, Tesla is becoming less crucial to China’s new energy vehicle strategy. Similarly, Nike is protected from wrath because, for now, it fills a gap in China’s value chain. This is a limited blessing and for an uncertain period of time – and should be a wake-up call for entrepreneurs in China.
As Global Times editor Hu Xijin put it: the West is free to take its ideological stands as long as it does not touch China’s core interests – namely, economic growth and national security.
Historian Niall Ferguson quoted Greek poet Archilochus in highlighting the difference in the US and Chinese national character: “The fox knows many things, but the hedgehog knows one big thing.”
The Xinjiang cotton saga fundamentally reflects an enduring clash between the constructs of the world’s two great powers, one built on a foundation of individual liberty and the other on crude national power.
Spring has arrived in the northern hemisphere, but a chill still lingers for the world’s fashion industry.
Dr Shirley Ze Yu is a political economist, an Asia fellow at the Ash Centre for Democratic Governance and Innovation and a former Chinese national television (CCTV) news anchor