As Xinjiang cotton row rages, European firms ‘caught between rock and hard place’

EU Chamber of Commerce in China says its members are facing an increasingly politicised business environment

Firms face backlash if they are perceived to be saying something that is ‘anti-China’, it says

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European firms are facing a tough time in China, an EU trade group says. Photo: AFP

Published: 10:24pm, 25 Mar 2021Updated: 1:25am, 26 Mar 2021

European companies in China are facing an increasingly politicised business environment, a leading trade group said on Thursday.

“On the one side, public opinion in Europe is demanding that companies demonstrate clear and transparent corporate social responsibility principles,” the European Union Chamber of Commerce in China said.

“On the other, they are potentially subjected to public backlash in China if, through showing that they are acting responsibly and that their supply chains are beyond reproach, they are perceived to be saying something that is ‘anti-China’.”

The chamber, which represents more than 1,700 companies, issued the statement as Swedish multinational clothing retailer H&M is facing a boycott after saying last year that it did not source cotton from Xinjiang.

China has been accused of using forced labour in its far western region, with Uygur workers being transferred away from their homes to pick cotton. Former US secretary of state Mike Pompeo in January accused Beijing of “genocide and crimes against humanity” for its treatment of Uygur Muslims in the region.

Beijing has repeatedly denied the allegations.

The EU chamber said that while it did not comment on individual cases, “the increased politicisation of business is seeing more European companies being caught between a rock and a hard place”.