Walmart Put On Notice In China

THERE IS NO ambiguity in the message the Central Commission for Discipline Inspection, the Party’s anti-graft watchdog, has sent to US retailer Walmart: put products from Xinjiang back into its Sam’sSam’s Club stores in China or face a consumer boycott.

The need for foreign multinationals to choose which of their major markets to prioritise — China or the United States — is being ratcheted up another notch by Beijing.

In late December, Chinese social media lit up over allegations that Walmart had stopped selling items from Xinjiang at its members-only Sam’s Clubs, which, unlike their US incarnation, are upmarket hypermarkets in China. Netizens claimed they could no longer buy Xinjiang-sourced items such as apples and dates on the Sam’sSam’s Club app that were previously available, and that the groceries had been de-stocked by Walmart. Typical Xinjiang produce such as cantaloupes and apricots were available, but they were not from Xinjiang.

The flare-up emerged two days after US President Joe Biden signed into law a bill banning companies from selling goods from Xinjiang or containing Xinjiang-made components unless they can prove forced labour was not involved.

The Central Commission for Discipline Inspection’s statement pulls no punches in dismissing suggestions that this was the result of inventory management:

Removing all products from a region without a valid reason hides an ulterior motive behind it, exposes stupidity and short-sightedness, and is bound to suffer its own evil consequences…Suppressing and boycotting Xinjiang products is another “card” played by Western anti-China forces, which is doomed to failure… From H&M Group’s boycott of Xinjiang cotton, to Intel’s letter to suppliers demanding that Xinjiang labour and products be banned, to the removal of all Xinjiang products from Sam’s Club, these Western companies that once flaunted no political interference have punched themselves in the face with their own actions.

The anti-graft watchdog also noted the expected patriotism of consumers in such circumstances:

Chinese consumers expressed strong dissatisfaction and resisted with the action of returning cards, expressing their position of resolutely safeguarding national interests.

If the remedy required of Walmart — to back down — is not forthcoming, then, the Commission says, Chinese consumers will ‘respond resolutely with practical actions’.

Walmart Gets Ensnared In US-China Dispute Over Xinjiang

NOW IT IS Walmart. Chinese social media has lit up over allegations that Walmart has stopped selling items from Xinjiang at its members-only Sam’s Clubs in China.

Netizens claimed they could no longer buy Xinjiang-sourced items such as apples and dates on the Sam’s Club app that were previously available, and that the groceries had been de-stocked by Walmart. The nationalistic state media, Global Times, said it had found typical Xinjiang produce such as dates, cantaloupes and apricots available, but they were not from Xinjiang.

There has not yet been a formal response from Walmart.

The flare-up comes a day after US President Joe Biden signed into law the bill Congress passed last week, banning all imports of Xinjiang products into the United States without pre-authorised clearance following proof that forced labour was not involved.

The law has already escalated tensions between Washington and Beijing, which denies all allegations of human rights abuses in the province, and is increasingly dragging multinationals into the fray.

Walmart is only the latest Western company to face the Sisyphean task of balancing reliance on Chinese suppliers and markets with the need to comply with US sanctions and maintain its reputation in Western markets.

US semiconductor maker Intel ran into a storm earlier this week after it apologised to China for reminding its suppliers that they had to comply with the US sanctions over Xinjiang. Its apology, posted on its Chinese social media accounts, that its commitment to avoid supply chains from Xinjiang was an expression of compliance with US law, rather than a statement of its position on the issue, was criticised for being insincere at best and duplicitous at worst in both China and the United States.

The stakes are higher for Walmart because it is an easier target for a direct Chinese consumer boycott than Intel, whose products go into other manufacturers’ products.

Sam’s Club is positioned as a premium grocery in China, unlike in the United States, where it is a bulk discount club. It has been a rare success story for Walmart in China. The US retailer is struggling online and offline against domestic rivals in the highly competitive retailing sector.

McDonald’s Raises Yuan As China’s Capital Markets Creak Open

Back in February, China said foreign companies could issue yuan-denominated debt in Hong Kong. The intention was to bolster the Hong Kong market and promote the internationalization of the yuan. Now McDonald’s, the U.S. burger joint group, has become the first non-financial company to do so, raising 200 million yuan ($29 million) via 3% notes due  in Sept. 2013. The money is to be used to open more McDonald’s outlets in China.

Such a small issue is a toe in the water but one being watched closely by other companies. Investors snapped up the issue. For one, 3% is a better rate than a yuan would earn sitting in a deposit account, for another expectations that the yuan will rise against the U.S. dollar makes the issue a currency play. Wal-Mart, the U.S. retailer with extensive operations in China, is said to be weighing an issue, too, with a slew of other companies to come in its wake as Beijing moves steadily to give foreign investors greater access to its capital markets.

Union Strikes Pay Deal With Wal-Mart

Wal-Mart, the superstore group that is the world’s largest retailer and famously anti-union in its home country of the U.S., has struck pay deals with the officially-sanctioned All China Federation of Trade Unions’ locals in Shenyang and Quanzhou, the FT reports.

A similar deal has been struck in Shenzhen, the Economic Times reports. Such collective bargaining agreements with management are required by the Labour Contract Law that came into effect in January.

The deals ensure a (below inflation) 8% pay rise for employees this year and next. More than 48,500 Wal-Mart employees at 105 stores across the country have been unionized since workers in Quanzhou formed the first Wal-Mart union in 2006 in the face of years of resistance in the country.

While many foreign owned companies now have locally unionized workforces, the ACFTU, the only officially sanctioned union allowed in China, has used Wal-Mart as the vanguard for its campaign to organize at other prominent foreign-owned companies with a history of opposing unions such as Eastman Kodak and Dell.