How U.S. companies have been dealing with the tensions between China and the U.S.

Information verified correct on April 1st, 2021

The tensions are over the alleged human rights abuses in China’s far west region of Xinjiang, and with all of the calls to boycott brands like Nike and H&M, we decided to go down to a popular shopping district here in Beijing to see what’s going on.

What we found was that H&M was really quiet – there were very few customers. The Swedish retailer is the primary focus and target of the Chinese outrage ever since last week when a past statement from the company surfaced online. It said that they were not going to use Xinjiang cotton because of reports of forced labor in its production.

Nike store

Those are allegations that the Chinese government has been denying. Now the Nike store was busier though a staffer did tell us that business was down since the controversy began. And we spoke to some customers, but nobody would agree to come on camera for us because of the political sensitivity. Off-camera though the responses were mixed, for the most part, most people said that they were feeling pressure not to buy the targeted brands.

They said that instead, they would buy Chinese or alternative foreign brands. We also learned that Nike has a very strong, loyal fan base. They told us that they would either delay their purchases for a month or so until all the controversy comes down or would just buy online so that they wouldn’t be seen at the shop.

This is where things get pretty tricky for the Chinese government because Nike, for example, is a huge employer of Chinese people, and that was another theme that we heard. One staffer at the Nike store said that she’s really worried about her job, and because Nike does employ so many people, the Chinese government has to be careful about a negative impact on the economy.

We think this shows one way in which foreign companies can push back despite all of this rhetoric. Most of the companies have not been saying anything. They’ve been shying away from commenting at all because some of the staff have actually been verbally abused online, and that’s because Nike has a way of trying to reach out to customers. They actually live stream, so some of those staff members have been told that they are traitors, so it’s a very hot button issue.

We think what was also interesting is the fact that the Chinese government pushed back on U.S.’s allegations that this whole effort to boycott foreign brands is state-led. The government said that why would we need to do that when so many people don’t like this effort by foreign companies. But we think one more point that was really fascinating – in our conversations with Chinese people was that for the most part, they don’t even understand what the controversy is all about because there is no open discussion about Beijing’s policies towards Xinjiang.

Most people thought that foreign companies, including Nike and H&M, just didn’t want to use Chinese products. So we think that also shows the challenge that foreign companies face because of this very closed information and environment.

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