Yesterday ZeroHedge discussed why western Corporations are terrified to confront China, even if it means losing on those all-important virtue signaling brownie points which are all that matter in Western society today: as a reminder, the stock of H&M, Nike and Adidas came under fire on Chinese social media on Thursday after Beijing’s propaganda offensive against Swedish fashion brand H&M sparked by the company’s expression of concern about labor conditions in Xinjiang. The sportswear companies were the latest to be caught up in a backlash prompted by a government call to stop foreign brands from tainting China’s name as internet users found statements they had made in the past on Xinjiang.
On Friday, as the Xinjiang spat escalated, China showed just how easy it is for Western companies to literally disappear when outlets belonging to Sweden’s H&M (Hennes & Mauritz AB) – the fashion retailer that found itself at the center of an escalating spat over human rights in Xinjiang – did not to show up on Apple Maps and Baidu Maps searches in China.
Apple’s map service in China is provided by Alibaba-owned AutoNavi (高德地图), which is one of the most popular map services for Chinese users. The other popular service, Baidu Maps, also disappeared H&M stores. Other companies like Nike are still safe. — Yurui Wu (@wuyurui99) March 25, 2021
As Bloomberg reports, users in Beijing reported that any searches for H&M in either Apple Maps on the iPhone or Baidu Maps returned no results while competing retailers, such as Uniqlo outlets, continued showing as usual. A similar search in Google Maps showed over a dozen H&M locations in the capital or its vicinity, though that service is only accessible to locals via the use of a VPN that skirts a state ban on products from Google.
Apple sources its mapping data in China from AutoNavi Software – owned by Alibaba Group Holding Ltd. – while Baidu collects its own.
The disappearance of H&M’s physical stores from online maps came after the retailer was removed from Alibaba’s e-commerce platform earlier this week as the controversy escalated, according to Bloomberg.
The company was blasted by China’s Communist Youth League and the People’s Liberation Army Wednesday after social-media users dug out an undated statement about accusations of forced labor in the region’s cotton-picking industry. Realizing that losing one biggest sources of revenue is far more important than empty virtue signaling to impress a handful of teenage liberal snowflakes, the statement has been since removed from H&M’s website as of Friday.
According to Bloomberg it’s unclear who’s driving the removal of H&M stores from mapping apps, which are operated by privately run enterprises that have recently come under increased scrutiny from regulators, although one can have a pretty safe guess of where the order comes from: China has a vast apparatus for censoring online content and its so-called Great Firewall restricts access to websites and apps from global companies like Facebook and Twitter. Social media is policed, with posts about controversial topics blocked or restricted from view.
Realizing that it in its pursuit to become an authoritarian state on par with China, the US has been scrambling to recreate China’s success in censoring anything it finds objectionable.
Commenting on China’s sudden crackdown on western brands – which comes in the aftermath of last week’s disastrous Alaska summit with the Biden admin, this morning Rabobank’s Michael Every had this to say:
Yes, we’ve seen similar Chinese moves against foreign products before. Some Aussie agri exports are currently locked out; South Korean soap operas and Norwegian salmon have been in the past; and back in 2012 there were major anti-Japanese boycotts and protests due to the geopolitical backdrop. Yes, those earlier storms passed: but that was arguably a very different China, at least in the eyes of the West, and according to its own combative rhetoric. Indeed, ‘Wolf Warrior’ diplomacy –in the past few days alone– has seen massively growing scepticism about China’s direction from Western diplomatic, military, and even businesses elites.
The problem is now on both sides. In China, the 2012 protests were quashed by the government, but this time round the Communist Youth League is actively trolling, and the diplomacy is blaring. The question in the minds of some who have read history is if this a –non-violent– replay of the anti-foreigner Boxer Rebellion rather than just a Boxer-Shorts Rebellion. In the West, the firms involved face a stark choice: stick to their professed social values and lose the China market, or accept China gets to dictate what they worry about – even when it reaches the alleged level of forced labour and genocide…and then try to explain corporate mottos like “Just Do It”. Could this even escalate to the level of the 2022 Olympics so we see the Para- and Parallel games? Probably not – but if it did, China has stated any boycotting countries will be sanctioned, dragging even more firms in. The risk is that this backdrop could accelerate existing moves towards decoupling of the global economy, which had been expected to be focused on semiconductors, but may now be on Lycra, sneakers, and socks and underwear value-packs too.
In short, yet again we see the underlying dynamic of hard choices having to be made by those who don’t want to make them: which we have been flagging as a logically-inevitable risk since 2017.
But we digress: unlike the US, where the middle class is encumbered with massive debt, China’s hundreds of millions of consumers are far more desirable to companies like H&M. It’s also why – as we said yesterday – the kind of hollow virtue signaling that Americans are bombarded with every day – has no place in China which has zero tolerance for such empty indications of corporate “virtue”. It’s why foreign brands have, in recent years, had to contend with a more assertive China and its ability to mobilize its 1.4 billion consumers. Lotte Group was among a number of South Korean corporations that took a sales hit or had their stores shut down after China objected to its neighbor’s 2016 decision to deploy a U.S missile defense system. Other companies have also run afoul in the market for infractions like identifying Hong Kong and Taiwan as countries rather than Chinese territories, or for perceived insults to China.