France draws EU frontline in Chinese cotton spat
LONDON, July 2 (Reuters Breakingviews) – When it comes to Chinese cotton, fashion retailers are damned if they do, and damned if they don’t. French prosecutors have opened an investigation read more into four companies suspected of covering up “crimes against humanity” in the northwestern region of Xinjiang, where Beijing is accused of forcing Muslim Uyghurs to work. He denies the allegations.
Japanese Fast Retailing (9983.T), owner of $ 93 billion Zara Inditex (ITX.MC), French SMCP (SMCP.PA), majority owned by Chinese Shandong Ruyi, and $ 8 billion Skechers ( SKX.N) are the targets of the French probe. Since the bulk of Chinese cotton comes from the region, it is difficult to avoid, and its tracing is notoriously difficult. Those who have taken a tougher stance, including $ 34 billion H&M (HMb.ST), are under a Chinese boycott. Other European countries will be under pressure to follow France’s example. Washington has already impounded shipments it says contain Xinjiang thread. Choosing a side in the fight becomes more and more difficult. (By Dasha Afanasieva)
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Editing by Ed Cropley and Karen Kwok
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