Chinese and US flags fly near The Bund, before a US trade delegation meets with their Chinese counterparts for talks in Shanghai, China July 30, 2019.
Aly Song | Reuters
BEIJING – China’s Ministry of Commerce said Tuesday it is launching an investigation into Calvin Klein’s parents. PVH Group over the alleged disruption of business during its Xinjiang supply chain.
The ministry said the investigation was part of the “untrustworthy entities” list mechanism. Launched in 2019 shortly after the US blacklisted Huawei, the list is China’s version of the US Commerce Department’s list of entities that restrict named companies from accessing US-sourced goods.
The US Commerce Department on Monday announced plans to ban the import or sale of cars with special hardware or software linked to China or Russia.
China’s Commerce Ministry on Tuesday did not say why it is now testing PVH, but said the US retail group has 30 days to respond. US defense companies that were previously on the list of “untrusted entities” are prohibited from importing or exporting related goods to China.
The Chinese investigation said PVH “targeted Xinjiang suppliers who violated the principles of normal market transactions, by disrupting normal transactions with Chinese businesses, individuals and other people, along with other discriminatory measures,” according to CNBC’s translation of the Chinese text.
PVH did not immediately respond to CNBC’s request for comment outside of US business hours.
The group, which also owns Tommy Hilfiger, is one of several foreign retail companies facing scrutiny in China over its efforts to rid itself of alleged forced labor in China’s Xinjiang region.
In its July 2022 corporate responsibility report, PVH said that Xinjiang is one of the regions with no direct or indirect sources.
International revenue for Calvin Klein and Tommy Hilfiger fell 4.3% year-on-year to $1.38 billion in the quarter ended August 4, dragged down by “a challenging consumer environment in Asia Pacific, particularly in China and Australia,” PVH said in a release. profit.
Overseas revenue accounted for more than half of PVH’s total revenue of $2.07 billion for the quarter.
Xinjiang is home to Uyghur Muslims, who have been identified by the United Nations, the United States, Britain and others as an oppressed ethnic group. China has repeatedly denied allegations of forced labor and other abuses in Xinjiang. The government says facilities located in the United States, Britain, Canada and human rights groups are considered internment camps as vocational training centers.
— CNBC’s Sonia Heng contributed to this report.
