LDN - Business

UK lawmakers slam Shein for refusing to answer questions on its cotton supply

[January 08, 2025] By SYLVIA HUI

LONDON (AP) — A lawyer for Shein summoned to a British parliamentary hearing evaded questions Tuesday on whether the fast-fashion giant sells products containing cotton from China, angering lawmakers seeking answers on the retailer's labor practices and allegations of forced labor in its supply chains.

Executives from Shein and its rival Temu were grilled on their labor rights compliance and how they source their products at Parliament’s business and trade committee Tuesday. The hearing came amid reports that Shein, which was founded in China but is now based in Singapore, is preparing for a 50 billion-pound ($62 billion) listing on the London Stock Exchange in the first quarter of this year.

Both global retailers are growing in popularity worldwide for selling mostly Chinese-made clothes and products at bargain prices. But they have drawn criticism over allegations that their supply chains may be tainted by forced labor, including from China's far-west Xinjiang province, where rights groups say serious human rights abuses were committed by Beijing against members of the ethnic Uyghur group and other Muslim minorities.

Yinan Zhu, general counsel at Shein in London, declined to answer repeated questions at the hearing on whether cotton from Xinjiang or elsewhere in China is present in the products it sells.

She also refused to state whether its code of conduct prohibits its suppliers from sourcing Xinjiang cotton, or comment on whether the company feared there is forced labor in Xinjiang.

“I don’t think it’s our place to comment on … to having a geopolitical debate," she said.

“We comply with the laws and regulations in the countries that we operate in. We are in compliance with relevant U.K. laws," she added, insisting that thousands of audits are carried out on Shein's behalf by verified external firms to ensure the robustness of its supply chains.

Committee chairman Liam Byrne said the parliamentary committee was “horrified” by the lack of information provided by Zhu and that her statements have given lawmakers “zero confidence” in the integrity of Shein's supply chains.

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Pages from the Shein website, left, and from the Temu site, right, are shown in this photo, in New York, June 23, 2023. (AP Photo/Richard Drew, File)

“The reluctance to answer basic questions has frankly bordered on contempt,” Byrne said.

Shein was founded in China in 2012 and has grown rapidly to become a global leader in fast fashion, shipping to 150 countries. In October Shein said it doubled its profits in the U.K. in 2023, with sales up nearly 40% to 1.5 billion pounds.

Its proposed London listing has drawn concerns from politicians and others including the U.K.’s independent anti-slavery commissioner over potential ethical and governance issues.

An earlier attempt by Shein to list in the U.S. was halted by lawmakers who wanted the company to verify it does not use forced labor from China's predominantly Muslim Uyghur population.

Stephen Heary, a senior lawyer for Temu, told the hearing that forced labor was an issue its senior management was concerned about and that no sellers from the Xinjiang region are allowed to sell goods on the global online marketplace.

A U.S. Congressional report in 2023 criticized Temu’s supply chains, saying there was an “extremely high risk” that it contained Chinese forced labor. The report said Temu “conducts no audits and reports no compliance system to affirmatively examine” whether its suppliers are observing U.S. forced labor law.

Temu, launched in 2022, is owned by Chinese e-commerce company PDD Holdings. Along with Shein, it has won over scores of consumers for selling a vast selection of cheap goods — from clothing to homeware — that are shipped from China.

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