Nike CEO John Donahoe defended the company’s association with Communist China last week despite abuses against Muslim Uighurs in the Xinjiang region, saying, “Nike is a brand that is of China and for China.”
“We’re confident about what we’re seeing in China as we drive long-term growth, and we have a long-term view about China,” Donahoe said during a call with Wall Street analysts on Nike’s earnings, according to a transcript published by Nasdaq. “We’ve always taken a long-term view. We’ve been in China for over 40 years, still invested significant time and energy in China in the early days, and today, we’re the largest sport brand there, and we’re a brand of China and for China.”
Donahoe’s remarks come after many Chinese called to boycott the sportswear company because it claimed in a statement in March that it is “concerned about reports of forced labor in, and connected to, the Xinjiang Uyghur Autonomous Region.”
“Nike is committed to ethical and responsible manufacturing and we uphold international labor standards. We are concerned about reports of forced labor in, and connected to, the Xinjiang Uyghur Autonomous Region (XUAR),” the company’s statement read. “Nike does not source products from the XUAR and we have confirmed with our contract suppliers that they are not using textiles or spun yarn from the region.”
While Nike may not directly source products from Xinjiang, an investigation by the BBC published in December found that nearly half a million minority workers are being forced to pick cotton in the region, which amounts to “85% of China’s cotton and 20% of the world’s cotton,” according to Dr. Adrian Zenz, a senior fellow at the Victims of Communism Memorial Foundation in Washington.
“For the first time we not only have evidence of Uighur forced labour in manufacturing, in garment making, it’s directly about the picking of cotton, and I think that is such a game-changer,” he said. “Anyone who cares about ethical sourcing has to look at Xinjiang, which is 85% of China’s cotton and 20% of the world’s cotton, and say, ‘We can’t do this anymore.’”
Nike said it takes reports of forced labor “very seriously” and explained that it has “not lobbied against the Uyghur Forced Labor Prevention Act, or any other proposed forced labor legislation.”
“We will continue to collaborate with industry associations such as Retail Industry Leaders Association, American Apparel & Footwear Association, National Retail Federation and U.S. Fashion Industry Association as well as with industry experts, partners, stakeholders and other organizations to understand, evaluate and address this critical global issue,” the company’s statement said.
In the fourth quarter, the sportswear giant reported $1.9 billion in sales in China, falling short of Wall Street’s $2.2 billion expectation.
“And the biggest asset we have in China is the consumer equity,” Donahoe said. “Consumers feel its strong deep connection to the NIKE, Jordan, and Converse brands in China, and it’s real. I saw that in my first week there, can’t wait to get back there, and it’s strong. And that’s brought to life on streets all over China through the over-7,000 monobrand stores we have in China. So, we have a strong consumer franchise in China, and they feel very connected to our brand.”
