China threatens Calvin Klein with a blacklist for cotton from Xinjiang

China accused Calvin Klein’s parent company of boycotting cotton in its western Xinjiang Region, threatening to place a US firm with significant interests on a blacklist for national security.

Beijing’s threats to put PVH, an apparel maker whose brands include Calvin Klein, Tommy Hilfiger and Tommy Jeans, on its list of “unreliables” are likely to alarm foreign companies at a time when China struggles to attract foreign investment.

In a Tuesday statement, the Chinese Commerce Ministry said that PVH has 30 days to explain whether it has discriminated against Xinjiang products in the last three years.

In a separate notification, the ministry accused this group of “violating normal market trading principle and unfairly boycotting Xinjiang Cotton and other products with no factual basis”.

The pressure on international clothing companies to source cotton from Xinjiang, which is rich in cotton, has been increasing and conflicting by both China and Western governments. Beijing rejects the accusations of the UN High Commissioner for Human Rights, independent watchdogs and other human rights groups that it is responsible to abuses committed against Xinjiang’s mainly Muslim Uyghur group. This includes widespread forced labour.

The Chinese commerce ministry announced that PVH will be investigated by the “Unreliable entity List Working Mechanism Office”. is a national-security-related organization set up in 2005 after a trade dispute with the US erupted.

The list of unreliable companies is similar to the “entities list” of the US Commerce Department, which targets companies that are accused of violating American laws and human rights. Beijing implemented the blacklist after US sanctions and restrictions on Chinese technology and its exports, especially on its telecom equipment manufacturer Huawei.

Foreign lawyers claim that China’s blacklist is too vague and targets companies accused of “endangering the national sovereignty, security, or development interests” of China. China has placed five US firms on its list for selling arms to Taiwan. These companies, however, do very little business in China.

PVH may face fines or restrictions on its activities in China, among other penalties. PVH, a New York-based firm with subsidiaries in China, as well as stores and warehouses there, issued a prepared press release in which it stated: “As part of our company policy, PVH adheres to all applicable laws and regulations throughout the world.” We are in contact with the Chinese Ministry of Commerce, and we will respond according to the applicable regulations.

In a statement, the ministry said that PVH’s alleged treatment of Xinjiang-produced products was “seriously damaging to legitimate rights and interests” of Chinese companies. It also put China’s sovereignty and security interests at risk.

The US has banned goods from Xinjiang under the Uyghur Forced Labor Prevention Act of 2021, unless the importers can show that they were not produced using forced labor.

PVH stated in a filing made this year that it had “made efforts” to confirm materials covered by US Acts “are not present within our supply chain”.

China’s Commerce Ministry rejected any suggestions that its blacklist could deter foreign investors.

China is “prudent” in its handling of the Unreliable Entity List. It targets only a small number of foreign companies that violate Chinese laws and market rules. “Honest, law-abiding entities from abroad have nothing to fear.”