Chinese and American flags fly near the Bund before the US trade delegation meets their Chinese counterparts for talks in Shanghai, China, July 30, 2019.
Aly song | Reuters
BEIJING – China’s Ministry of Commerce said Tuesday that this was the case launching a probe in Calvin Klein parent PVH group over alleged business disruptions around Xinjiang’s supply chain.
The ministry said the investigation is part of the “unreliable entities” listing mechanism. The list, launched in 2019 shortly after the US blacklisted Huawei, is China’s version of the US Commerce Department’s Entity List that bans named companies from accessing items from the US.
The U.S. Commerce Department announced plans Monday to ban the import or sale of cars with specific hardware or software connected to China or Russia.
China’s Commerce Ministry did not indicate on Tuesday why it is now investigating PVH, but said the US retail group has 30 days to respond. American defense companies that previously ended up on the list of ‘unreliable entities’ are excluded from China-related import or export.
The Chinese investigation alleges that PVH “targeted Chinese text.
PVH said in a statement to CNBC: “As a matter of company policy, PVH maintains strict compliance with all relevant laws and regulations in all countries and regions in which we operate. We are in communication with the Chinese Ministry of Commerce and will respond as soon as possible. in accordance with relevant regulations. We have no further comment at this time.”
The group, which also owns Tommy Hilfiger, is one of several foreign retail companies that have come under scrutiny in China for efforts to distance themselves from alleged forced labor in China’s Xinjiang region.
In one Corporate Social Responsibility Report July 2022PVH said that Xinjiang is one of the regions where no direct or indirect procurement is allowed.
Calvin Klein and Tommy Hilfiger’s international sales fell 4.3% year over year to $1.38 billion in the quarter ended August 4, driven by a “challenging consumer environment in Asia Pacific, particularly in China and Australia” , said PVH. An release of income.
Those foreign revenues accounted for more than half of PVH’s total revenue of $2.07 billion for the quarter.
Xinjiang is home to the Uyghur Muslims, who have been identified by the United Nations, United States, United Kingdom and others as an oppressed ethnic group. China has repeatedly denied allegations of forced labor and other abuses in Xinjiang. The government says the facilities there, which have been characterized as internment camps by the U.S., Britain, Canada and human rights groups, are actually vocational training centers.
—CNBC’s Sonia Heng contributed to this report.