Financial and business news from Bulgaria

Radio China. Boycott of Xinjiang cotton will hurt interests of companies that use it

Xinjiang's cotton production occupies 20 per cent of the world's and is key to ensuring global supply, so it's not easy to find a replacement for it. However, in January the US announced it was suspending imports of Xinjiang cotton and products it produced, leading to a rise in the cost of their output, Radio China reports.
Xinjiang cotton is among the best quality in the world, and the boycott is likely to cause an unnatural change in its price on the international market and damage companies and consumers.

Reasing on false information, a number of foreign companies announced that they would abandon the use of Xinjiang cotton, which is why they suffer image damage among Chinese consumers and other negatives for their business will manifest in the long term.

For transnational companies, the large Chinese market is important. Thanks to its recovery in 2020, clothing and footwear companies hit hard by the pandemic have barely made profits. For example, in 2020, Nike's revenue from the Chinese market grew 8 percent year-on-year. The company's financial report said performance in China helped offset the damage globally. Sweden's H&M, which is at the centre of the Xinjiang cotton scandal, also needs the Chinese market, which is one of five key for it. In 2020, its sales were 5.2% of the total.

Companies have the right to choose where to buy materials and raw materials, but if they become victims of political interests it will harm their interests. The Chinese market is open and the country welcomes investment from around the world and continuously improves the business environment. But he won't accept if someone on the one hand tries to win on him, and on the other, criticizes the country without justification.