Ban Shein, China’s Fast-Fashion Company

Commentary Shein, China’s fast-fashion company, moved its headquarters from Nanjing to Singapore last year, apparently in an attempt to globalize and escape the bad reputation of its parent country. Yet most of its business operations, including almost all its factories and warehouses, remain in China. Shein apparently tried to rehabilitate what’s left of its China image last month by funding an all-expenses-paid influencer boondoggle to Guangzhou in southeast China, with a side trip to Singapore. The public relations stunt soured when followers pilloried their influencers for naively promoting Shein’s labor and environmental policies after getting VIP treatment, including business-class flights, massages, and stays at the swankiest of swank hotels, the Four Seasons. “On the first day, the creators checked into the Four Seasons Hotel Guangzhou,” according to Elite Daily, which describes itself as “The Voice of Generation Y.” The report cites Shein’s vlog, noting “each creator was given their own Superior Room with views of the Canton Tower and goodies like a pillow, blanket, and custom pajamas … these rooms are priced at around $346 a night,” amounting to at least $1,384 per creator on Guangzhou hotel costs alone, not including the five-star resort where they swooned and swayed for their own cell phone cameras in Singapore. That’s cheap PR for a company now valued at $66 billion, with annual revenue in 2022 of $23 billion. Cheap, if the trip went well. But instead, it served as a hook for irate followers and other Shein critics to raise accusations against the company, including unsold merchandise overflowing landfills, the Shein production process that contributes to pollution, use of forced labor, self-admitted and criminal use of cotton from Xinjiang, where genocide against the Uyghurs is ongoing, and intellectual property theft from independent designers to fuel an unbelievable 6,000 new Shein products that hit the virtual shelves daily. Sen. Marco Rubio (R-Fla.) on Capitol Hill in Washington on Feb. 23, 2021. (Drew Angerer/Pool/AFP via Getty Images) A marketplace investigation in 2021 found unsafe levels of lead, phthalates, and PFAS in products shipped to Canada from three companies—Shein, AliExpress, and Zaful—from China and Hong Kong. Sen. Marco Rubio (R-Fl.) wrote in a letter last month that “Shein is able to offer this array of products at rock-bottom prices not because of any particular competitive advantage, but because it steals intellectual property, infringes copyrights, exploits U.S. trade law, and uses fabric linked to Uyghur slave labor.” Rubio said Shein gets free access to U.S. markets by dodging China tariffs. “Shein ships small packages direct-to-consumer using a trade loophole known as de minimis entry,” he wrote. “Shein abuses this entry category to avoid customs duties and inspections on its unethically produced products. Shein’s exploitation of de minimis entry prevents scrutiny under UFLPA [Uyghur Forced Labor Protection Act], cheats taxpayers of customs revenue, and undercuts American competitors that play by the rules.” Shein admitted that some of its cotton comes from Xinjiang, which, according to Rubio, is a self-admission of guilt and makes the company “complicit in genocide.” Meanwhile, American clothing companies that first ship products made in China to their own stores must pay the full tariffs. Our politicians have unconscionably left the de minimis loophole in our trade laws, allowing Shein to outcompete American companies and the companies of our allies that we should support before buying from China’s sweatshops. Shein’s attempts at PR and lobbying in the United States, ahead of an expected IPO, include the hiring of K-Street firms. The lobbying appears effective, as a bill introduced last year by Rep. Earl Blumenauer (D-Ore.) to close the de minimis loophole for non-market economies remains in limbo. The U.S. Securities and Exchange Commission (SEC) headquarters in Washington on Jan. 28, 2021. (Sauk Loeb/AFP via Getty Images) In an open letter, Blumenauer, Rep. John Rose (R-Tenn.), and others asked the Securities and Exchange Commission to pause Shein’s expected IPO until an independent audit confirms that the company has no slave labor in its supply chain. “We strongly believe that the ability to issue and trade securities on our domestic exchanges is a privilege, and that foreign companies wishing to do so must uphold a demonstrated commitment to human rights across the globe,” the bipartisan letter said. Shein’s operations in China can be taxed by Beijing for use any way it sees fit, whether to repress its own people by strengthening the Chinese Communist Party’s police state, militarize more thoroughly to conquer the territory of neighbors India and Taiwan, for example, or steal more IP to strengthen its economy and military yet further. The private data of Shein customers, if allowed to traverse China’s internet, can be legally captured and

Ban Shein, China’s Fast-Fashion Company

Commentary

Shein, China’s fast-fashion company, moved its headquarters from Nanjing to Singapore last year, apparently in an attempt to globalize and escape the bad reputation of its parent country. Yet most of its business operations, including almost all its factories and warehouses, remain in China.

Shein apparently tried to rehabilitate what’s left of its China image last month by funding an all-expenses-paid influencer boondoggle to Guangzhou in southeast China, with a side trip to Singapore.

The public relations stunt soured when followers pilloried their influencers for naively promoting Shein’s labor and environmental policies after getting VIP treatment, including business-class flights, massages, and stays at the swankiest of swank hotels, the Four Seasons.

“On the first day, the creators checked into the Four Seasons Hotel Guangzhou,” according to Elite Daily, which describes itself as “The Voice of Generation Y.”

The report cites Shein’s vlog, noting “each creator was given their own Superior Room with views of the Canton Tower and goodies like a pillow, blanket, and custom pajamas … these rooms are priced at around $346 a night,” amounting to at least $1,384 per creator on Guangzhou hotel costs alone, not including the five-star resort where they swooned and swayed for their own cell phone cameras in Singapore.

That’s cheap PR for a company now valued at $66 billion, with annual revenue in 2022 of $23 billion. Cheap, if the trip went well.

But instead, it served as a hook for irate followers and other Shein critics to raise accusations against the company, including unsold merchandise overflowing landfills, the Shein production process that contributes to pollution, use of forced labor, self-admitted and criminal use of cotton from Xinjiang, where genocide against the Uyghurs is ongoing, and intellectual property theft from independent designers to fuel an unbelievable 6,000 new Shein products that hit the virtual shelves daily.

Sen. Marco Rubio
Sen. Marco Rubio (R-Fla.) on Capitol Hill in Washington on Feb. 23, 2021. (Drew Angerer/Pool/AFP via Getty Images)

A marketplace investigation in 2021 found unsafe levels of lead, phthalates, and PFAS in products shipped to Canada from three companies—Shein, AliExpress, and Zaful—from China and Hong Kong.

Sen. Marco Rubio (R-Fl.) wrote in a letter last month that “Shein is able to offer this array of products at rock-bottom prices not because of any particular competitive advantage, but because it steals intellectual property, infringes copyrights, exploits U.S. trade law, and uses fabric linked to Uyghur slave labor.”

Rubio said Shein gets free access to U.S. markets by dodging China tariffs. “Shein ships small packages direct-to-consumer using a trade loophole known as de minimis entry,” he wrote. “Shein abuses this entry category to avoid customs duties and inspections on its unethically produced products. Shein’s exploitation of de minimis entry prevents scrutiny under UFLPA [Uyghur Forced Labor Protection Act], cheats taxpayers of customs revenue, and undercuts American competitors that play by the rules.”

Shein admitted that some of its cotton comes from Xinjiang, which, according to Rubio, is a self-admission of guilt and makes the company “complicit in genocide.”

Meanwhile, American clothing companies that first ship products made in China to their own stores must pay the full tariffs. Our politicians have unconscionably left the de minimis loophole in our trade laws, allowing Shein to outcompete American companies and the companies of our allies that we should support before buying from China’s sweatshops.

Shein’s attempts at PR and lobbying in the United States, ahead of an expected IPO, include the hiring of K-Street firms. The lobbying appears effective, as a bill introduced last year by Rep. Earl Blumenauer (D-Ore.) to close the de minimis loophole for non-market economies remains in limbo.

The headquarters of the US Securities and Exchange Commission
The U.S. Securities and Exchange Commission (SEC) headquarters in Washington on Jan. 28, 2021. (Sauk Loeb/AFP via Getty Images)

In an open letter, Blumenauer, Rep. John Rose (R-Tenn.), and others asked the Securities and Exchange Commission to pause Shein’s expected IPO until an independent audit confirms that the company has no slave labor in its supply chain.

“We strongly believe that the ability to issue and trade securities on our domestic exchanges is a privilege, and that foreign companies wishing to do so must uphold a demonstrated commitment to human rights across the globe,” the bipartisan letter said.

Shein’s operations in China can be taxed by Beijing for use any way it sees fit, whether to repress its own people by strengthening the Chinese Communist Party’s police state, militarize more thoroughly to conquer the territory of neighbors India and Taiwan, for example, or steal more IP to strengthen its economy and military yet further.

The private data of Shein customers, if allowed to traverse China’s internet, can be legally captured and utilized by the regime for its own purposes.

The CCP is attempting every trick in the book to concentrate power for its bid for global hegemony and anything that adds to that power, including a fast fashion company like Shein that undermines competitors in the United States, Europe, Japan, and other market democracies.

This should have us all thinking about how and why we allow companies under the thumb of a totalitarian regime like the CCP to use their authoritarian advantages to insert themselves so thoroughly into our democratic lives.

The United States, European Union, Japan, and our allies need to do more to stop China-dependent companies like Shein from replacing existing companies from the United States and our allies. Through tariffs and sanctions that protect market democracies from the wolf in sheep’s clothing—available on the Shein website for $3.30—we protect jobs, human rights, health, and ultimately, our political liberties and freedoms. Banning companies like Shein that conduct most of their production in totalitarian countries like China should be a no-brainer.