TAIPEI (Taiwan News) — Japanese retailer Muji saw its stock price plunge on Friday (March 26) despite the company's claim that it had found no significant issues in its supply of cotton from Xinjiang.
Western brands such as Nike and H&M that have pledged to stop using cotton from Xinjiang over concerns of widespread human rights abuses in the region are facing a Chinese boycott.
In a statement to Chinese state mouthpiece the Global Times on Thursday (March 25), Muji China confirmed that the company is still selling products made from the controversial crop. In an effort to be spared from the boycott, the retailer labeled garments as "Xinjiang cotton" and published a video about long-staple cotton from the western region.
Some Chinese netizens have called the labeling hypocritical, as the company had previously pledged not to export any products made of Xinjiang cotton to the U.S. to comply with its ban. "The Japanese company banned Xinjiang cotton with the U.S. [stores] but still wants to earn money here by playing friends with us. No way I will buy its products," one netizen wrote on Weibo.
"Xinjiang cotton" advertised on Muji's Chinese site.
According to a report published by Reuters, Muji operator Ryohin Keikaku Co. said it was “deeply concerned” about Xinjiang's forced labor reports. The company claimed it was working to ensure compliance with EU and U.S. laws regarding human rights in Xinjiang and had so far found no significant problems with its suppliers there.
Friday morning, the stock price of Ryohin Keikaku Co. tanked by 6.76 percent, its biggest drop since last July. Its market value decreased by 22.9 billion Japanese yen (US$208.84 million).
Many foreign brands hit by the backlash from Chinese customers based their decision on the Better Cotton Initiative's (BCI) announcement last October that the organization had decided to end field-level activities in Xinjiang because of the continued allegations of forced labor and humans rights abuses in the region. The announcement is no longer available on its website but can be viewed in an archived form.
The BCI's Chinese branch defended the sourcing of Xinjiang cotton on Friday, asserting that “Since 2012, the Xinjiang project site has performed second-party credibility audits and third-party verifications over the years and has never found a single case related to incidents of forced labor.”
According to an investigation by German scholar Adrian Zenz, who was recently sanctioned by the Chinese Communist Party for publishing studies about Xinjiang internment camps, three of the region's prefectures alone had mobilized at least 570,000 people into cotton-picking operations through the government’s coercive labor training and transfer scheme.
The report stated that cotton-picking is strategically important to achieving the Chinese Communist Party's poverty alleviation targets and that the laborers are poorly paid for their grueling work and are under constant on-site surveillance.
One propaganda report cited by Zenz shows the Chinese government presents the work in cotton fields as a way to eliminate the “deep-rooted, lazy thinking” of poor, rural villagers by showing them that “labor is glorious.” Another such report said locals' desire to stay home and rear children is an "important cause of poverty."