Shein’s U.S. IPO Faces Congressional Scrutiny Over Uyghur Forced Labor Involvement

by Uyghur Times
2 minutes read
Xinjiang Cotton

By Tursunjan

November 29, 2023

In a major test for investor appetite, China-founded e-commerce giant Shein has filed for an initial public offering (IPO) in the United States, seeking a listing on the New York Stock Exchange. However, the move is accompanied by renewed scrutiny from U.S. lawmakers, who are calling on the company to substantiate claims that forced labor is not used in the production of its popular $5 t-shirts and $10 sweaters.

“Shein’s public claims that they take ‘visibility across our entire supply chain seriously’ is not supported by the materials produced to the committee in its bipartisan investigation. We are continuing to carefully examine Shein’s regulatory and compliance programs, and I would encourage investors and banks underwriting this reported IPO to do the same,” stated Rep. Mike Gallagher (R-WI), Chairman of the House Select Committee on the Chinese Communist Party.

Shein, a fast-fashion phenomenon, is anticipated to generate around $8 billion in sales in the U.S. this year alone. However, recent tests conducted for Bloomberg have raised concerns about the company’s sourcing practices. It was revealed that Shein had used cotton from the Uyghur  region in some of its clothing, a practice banned in the U.S. due to forced labor and other human rights abuses in the area, particularly against the Uyghur  population.

In November of last year, a Bloomberg report titled “Shein’s Cotton Tied to Xinjiang—Where China Is Accused of Forced Labor” exposed the Chinese online retailer’s connection to Uyghur forced labor in its clothing.

The Uyghur homeland region has been at the center of international controversy, with dozens of Western countries accusing the Chinese government of genocide and crimes against humanity. These accusations stem from mass detentions, forced sterilization, forced assimilation, and the establishment of forced labor camps targeting Uyghur people. Shein’s association with the use of the region’s cotton has intensified the debate over ethical sourcing and supply chain transparency.

Mehmetjan, communications director of Washington DC based Uyghur Union told Uyghur Times that “The outcome of this unfolding situation will not only impact Shein’s market debut but could also have broader implications for the fashion industry’s engagement with regions mired in allegations of human rights violations. “

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