SinoInsight 1
March 24
In a post on its official Sina Weibo account, the Chinese Communist Party Youth League (CYL) criticized a September 2020 statement by Swedish fast fashion company H&M in which the latter claimed that it would stop sourcing cotton from Xinjiang or work with garment manufacturers from the region over concerns of forced labor. The H&M statement, which has since been taken down from its website, noted that the company was “deeply concerned by reports from civil society organizations and media that include accusations of forced labor and discrimination of ethno-religious minorities” in Xinjiang. On September 22, 2020, the U.S. House of Representatives passed the Uyghur Forced Labor Prevention Act; an updated version of the bill was reintroduced in the House on Feb. 18 this year.
H&M and other big brands like Nike and Adidas are members of the Better Cotton Initiative (BCI), a nonprofit organization that certifies cotton farms according to their sustainability standards. In October 2020, BCI announced in a statement its decision to “cease all field-level activities” in Xinjiang “effective immediately, including capacity building and data monitoring and reporting,” and added that it had in March 2020 “suspended licensing and assurance activities” in the Xinjiang Uyghur Autonomous Region. BCI’s statement appeared to have been scrubbed after the outbreak of the CYL-provoked controversy.
The CYL’s criticism of H&M was picked up by Party and state media, leading to a campaign to “cancel” and boycott BCI companies in the PRC. A Weibo account ran by People’s Daily said that “Chinese netizens won’t stand for [H&M’s statement]” and stressed that “national interests are above all.”
In response to the CCP pressure campaign, H&M said in a statement, “H&M Group has always managed our global supply chain in an open and transparent manner, ensuring that our suppliers worldwide comply with our sustainability commitments such as the OECD Guidelines for Responsible Business Conduct and do not represent any political position.”
That day, H&M, Adidas, and Nike stocks fell 5.3 percent, 3.45 percent, and 2.89 percent respectively.
March 25
1. When asked about the Communist China’s intimidation of H&M and other companies, PRC foreign ministry spokeswoman Hua Chunying replied that allegations of forced labor in Xinjiang are “lies are cooked up by some so-called scholars and the media” and “the Chinese people wouldn’t allow foreigners to reap benefits in China on the one hand and smear China on the other” (中國老百姓不允許外國人一邊吃著中國的飯，一邊砸著中國的碗).
2. In a widely circulated video on Chinese social media, a young woman carrying a placard reading “I support Xinjiang cotton and boycott H&M” tried to dissuade passersby from entering the H&M store in Wanda Plaza at Zhengzhou City’s Zhongyuan district. The young woman was eventually led away by the police.
March 26
1. Despite boycotts against BCI companies like H&M, Adidas, and Nike, Nike shoes on JD.com attracted hundreds of thousands of bidders; a pair of black-and-white colored Nike Low Dunks garnered over 340,000 bids before bids were closed, according to a widely circulated image on the Chinese internet. Meanwhile, young Chinese rushed to buy products from H&M, Adidas, and Nike online after those companies offered a 30 percent discount, according to videos on the Chinese internet.
2. E-commerce platforms in mainland China (Taobao, JD.com, Pinduoduo, etc.) were found to have blocked the sale of H&M products and some goods produced by BCI companies. About 200 brands were affected by the sales boycott. Meanwhile, Chinese members of BCI announced their withdrawal from the organization.
3. Some mainland and Hong Kong celebrities terminated their contracts with companies that refuse to use Xinjiang cotton or have not expressed their views on the topic. Some mainland shows even censored out the “canceled” brands in post-production. Concurrently, some international celebrities and politicians announced their support of boycotting Xinjiang cotton.
4. The Chinese Football Association and its associated professional league organization convened an urgent internal meeting on the Xinjiang cotton incident. The organizations condemned Nike’s “wrong behavior” and announced that they reserve the right to renegotiate their contract with the company.
5. The China branch of the BCI said that it had not found forced labor of cotton production in Xinjiang, and would continue communications with its Chinese partners in the region.
6. Global Times and its editor-in-chief Hu Xijin issued commentaries urging a lowering of temperatures on the Xinjiang cotton boycott:
- In a Weibo post, Hu wrote that concerns raised about the stance of Western companies toward Xinjiang cotton “doesn’t mean that the Chinese market is ‘breaking off relations’ with those companies, nor does it mean ‘blocking’ them.” He added, “As far as this crisis is concerned, some people may be saying goodbye to some brands; while emotional responsibility is worthy of respect, this doesn’t mean that others must imitate that form of social coercion.”
- A Global Times op-ed titled, “Today, Bad Guys Have Joined the Boycott H&M Crowd!” argued: “We must be wary of those who take less sensible actions, as well as forces that try to muddy the waters, carry out ‘gao ji hei,’ and attempt accelerationism.”
OUR TAKE
1. According to official CCP data, China is the world’s leading producer, consumer, and importer of cotton, as well as the largest manufacturer of cotton textiles. China’s cotton production in 2020-2021 was about 5.95 million tons and saw total demand reach about 7.8 million tons. Officially, China also imports about 2 million tons of cotton annually; in 2020, China’s cotton imports increased 16.6 percent to 2.159 million tons. Meanwhile, Xinjiang accounts for 87 percent, or 5.2 million tons, of China’s domestic production, as well as 67 percent of domestic consumption.
Per statistics issued by Xinjiang’s department of agriculture and rural affairs, more than 90 percent of cotton fields in northern Xinjiang are fully mechanized, and the cotton yield accounts for 42 percent of the region’s total. In reading between the lines of CCP data, the bulk of Xinjiang cotton comes from southern Xinjiang and is picked by hand. Research by international scholars locate many Uyghur concentration camps in southern Xinjiang, including near the two traditional cotton growing areas of Kashgar and Aksu.
Cotton and textiles are a key industry in China. At the end of 2020, there were 27.35 million people working in China’s textile industry, according to official data. Nearly 50 percent of three major types of cotton products (clothing, home textiles, industrial textiles) are slated for export, on a scale of nearly $1.9 trillion.
From the data above, it is clear that there are potentially serious ramifications for the CCP regime in the event of a prolonged domestic boycott or concerted international community action over the Xinjiang cotton issue. Chinese companies may be forced to import more cotton from abroad for compliance purposes; importing 50 percent or more cotton will cost about $2 billion, money that could otherwise be saved without the Xinjiang controversy for the PRC. Increased demand in China will also drive up the price of cotton internationally, which in turn increases the cost of China’s textile exports and heightens pressure on China’s foreign exchange reserves. Concurrently, the increasing cost of manufacturing textiles in China will grant other countries an opportunity to expand and improve their own supply chains, providing added challenges to China’s textile companies and the PRC in general.
2. There are several possible reasons why the CYL decided to spotlight the Xinjiang cotton issue at this time. We will look at two more likely reasons.
First, the CCP could be dazzled by its propaganda victory at the Sino-U.S. meeting in Alaska, and was looking to press home the advantage. With the U.S. and her Western allies recently imposing sanctions over the persecution of Uyghurs in Xinjiang, the CCP might believe that playing the nationalism card would be a good counter to external pressure and another propaganda opportunity. However, the CCP’s aggressiveness and “wolf warrior” diplomacy over the Xinjiang cotton issue could backfire, inspiring greater international resistance towards the PRC and negatively impacting the regime’s economy. The CCP’s failure to successfully “weaponize” the Chinese market would signal to the international community that Beijing is more bark than bite, and future efforts at intimidation have a higher chance of falling flat. Instead of another propaganda victory, the CYL’s provocation of H&M could offset Beijing’s Alaska momentum and increase political risks for Xi Jinping. If neither the PRC nor the international community budges on the Xinjiang cotton issue, it could potentially develop dramatic consequences that are detrimental to the CCP.
Another possible reason for the CYL’s attack on H&M is collusion between Xi’s domestic factional rivals and the Western elite establishment as part of an “anti-Xi, not anti-CCP” strategy. In recent years, Xi has criticized and moved to weaken the influence of the CYL after the latter was involved in suspicious, excessively flattery of Xi (高級黑, or “gao ji hei”) before and after the 19th Party Congress. Party elite interests in the CYL who bear a grudge against Xi could have seized upon Western sanctions over Xinjiang to carry out another move that seems politically correct and unimpeachable at the time, but in reality creates fresh headaches for Beijing and strategically benefits Xi’s rivals. The more recent “temperature lowering” commentaries by Hu Xijin and Global Times hint that the CYL may have again overstepped at a crucial time.
SinoInsight 2
Feb. 27
A national-level political and legal affairs education and rectification (全國政法隊伍教育整頓) mobilization and deployment meeting was held in Beijing with the approval of Party Central. Guo Shengkun, the Central Political and Legal Affairs Commission secretary and Politburo member, presided over the meeting and delivered a speech. Guo also announced the creation of the National Political and Legal Affairs Education and Rectification Leading Group and Office, which are housed within the CPLAC headquarters.
Key points in the meeting include:
- The meeting urged officials to “thoroughly make use of the revolutionary spirit … to focus on deep-seated problems exposed by the eradication of evil, turn the knife blade inward, and scrape poison from bone.”
- The meeting acknowledged that the political and legal affairs team is “an important force in defending the Party’s leadership and the people’s democratic dictatorship,” and is the “knife handle” (刀把子) of the Party and the people. Therefore, “political loyalty is directly connected to the Party’s ruling position and the country’s long-term stability.”
- “Education and rectification” work is not only an “urgent and important political task,” but also “requires inward determination and courage.”
- The meeting noted efforts by the Supreme People’s Court and Supreme People’s Procuratorate in promoting “lifelong accountability” from officials in the political and legal affairs apparatus, including retroactive investigations.
Feb. 28
According to an article published on the political and legal affairs apparatus’s official website, as of Nov. 30 last year, a total of 2,247 officials were punished in the five areas in China (Heilongjiang, Jiangsu, Henan, Sichuan, and Shaanxi) where “education and rectification” work were piloted in July 2020. Of the 2,247 officials, two were bureau-level cadres and 227 were at the division-level; 448 officials had formal investigation cases opened against them; and 39 officials saw their cases transferred to judicial organs for prosecution.
The article noted that the “education and rectification” pilot work “left no areas ‘out of bounds,’ was full coverage, and showed zero tolerance” (做到無禁區、全覆蓋、零容忍 ), and served the purpose of “resolutely eliminating black sheeps and maintaining the physical health of political and legal affairs teams.”
March 18
The directors of newly established provincial political and legal affairs education and rectification offices held what was almost certainly its first formal meeting to discuss work implementation issues. According to the official WeChat account of the CPLAC, the meeting called on officials to “thoroughly study and implement the spirit of General Secretary Xi Jinping’s important instructions” and meet the requirements of “Comrade Guo Shengkun,” the CPLAC head.
According to mainland media reports, the “education and rectification” of the political and legal affairs apparatus target two broad segments of the apparatus over a roughly half-a-year period. The first segment beginning in February and concluding at the end of June targets political and legal affairs commissions in the city and counties, work units, and provincial prisons and drug rehabilitation centers. The second segment beginning in August and concluding at the end of October will target the CPLAC and its work unit, as well as provincial political and legal affairs commissions and their work units.
The official CPLAC WeChat account previously noted on March 10 that 16 central guidance groups were being formed to implement the “education and rectification” work, and 364 provincial-level guidance groups had already been established.
March 22
Guo Shengkun presided over a meeting of the National Political and Legal Affairs Education and Rectification Leading Group. Guo called on the leading group to adhere to Xi Jinping’s policies, play its role well, improve its “political stance,” strengthen supervision and guidance, and promote “education and rectification in an orderly manner.”
OUR TAKE
1. Since the 19th Party Congress, Xi Jinping has rolled out one campaign after another to rectify the political and legal affairs apparatus, including the targeting of organized crime and “protective umbrellas” in 2018, retroactive investigation in Inner Mongolia in 2020 (see here and here), and the arrest of notable individuals like Meng Hongwei, Sun Lijun, and Peng Bo.
As we have noted in previous analyzes, Xi’s political and legal affairs rectification campaign is simultaneously:
- A genuine effort at strengthening Party discipline and rooting out corruption, particularly in the middle and lower official ranks.
- An ongoing endeavor to eliminate deeply entrenched Jiang Zemin faction influence and factional networks in the political and legal affairs apparatus.
- A part of Xi’s power consolidation work to pave the way for him to secure, with minimal incident and pushback, a norm-breaking third term in office at the 20th Party Congress in 2022.
2. Xi faces extreme opposition to his rule, both inside the PRC and from the international community. Western establishment elites and Xi’s factional rivals will almost certainly do their best to undermine the Xi leadership around “sensitive” periods for the regime (centennial celebrations in July, key political conclaves, major persecution dates, etc.) with the goal of weakening his “quan wei” and tainting his legitimacy and legacy in the lead up to the 20th Party Congress. The “anti-Xi coalition” will also look to force Xi to designate a successor when the Party elite gather to discuss key personnel reshuffle matters at Beidaihe during the July-August period, or other unofficial gatherings.
The more pressure Xi encounters, the more dangerous he will become. In the lead up to the 19th Party Congress, Xi arrested “big tigers” Fang Fenghui and Sun Zhengcai; at the time, Sun, Chen Min’er, and Hu Chunhua were widely tipped to be Xi’s heir designate. We would not be surprised to see the downfall of more “big tigers” in the political and legal affairs apparatus this year, especially after investigations into the CPLAC and provincial-level political and legal affairs commissions commence in August (coincidentally or otherwise, around the Beidaihe period). Escalation of the “you die, I live” Xi-Jiang factional struggle could even lead to the emergence of significant political Black Swans that would result in China undergoing tremendous change.
