Western brands continue to face significant negative publicity and consequences in China over statements made by both companies and western governments concerning forced labor accusations in the Xinjiang region of Japan.
Multinational employers in China need to be extremely aware to the potential ramification such statements have not only on market access to China, but also on internal employee sentiments as well.
In our March 2021 update, we detailed the ramifications of statements made by Swedish clothing retailer H&M had on the company’s ability to do business in China. What is important to note is that the Chinese Government – often viewed as the power at play – did not play a publicly direct role in driving the public pushback against H&M. Instead, Chinese social media and e-commerce platforms led the pushback with citizens denouncing the brands and products disappearing from sites and search results. Other brands, like Nike and Burberry are
seeing similar push back as well.
This scenario focused on public pushback against company products, however, CHROs and Global HR Executives should be keenly aware of potential “employee voice” issues stemming from employee sentiment and cultural ramifications.
Like any other region, talent management and employee voice are important issues in China. If you are the CHRO of a western company that makes a Xinjiang-like statement, what do you do if the Chinese employee population takes offense like they have with H&M? The reputational damage to a company within China could be significant, making HR and employee relations very difficult. At the same time, companies face mounting pressure in the West to take stands against issues as seen in Xinjiang. One could easily see employee protests accusing firms of using sourcing derived from Xinjiang or even for failing to take a stand against the forced labor accusations.
HR Policy Global Outlook: China’s relations with the US and other Western powers has been fraught with difficulties of late and,
based on recent talks, appears likely to continue. A prevailing theory here is that the fashion industry is being used as somewhat of a
political football. Thus, statements made months earlier (like H&M’s which was made last year) can resurface. It goes without saying, for multinational employers, careful consideration of any corporate statements implicating China is paramount.
