France draws EU battle line in China cotton spat

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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

LONDON (Reuters Breakingviews) - When it comes to Chinese cotton, fashion retailers are damned if they do, and damned if they don’t. French prosecutors have opened an investigation into four firms suspected of concealing "crimes against humanity" in the northwest Xinjiang region, where Beijing is accused of forcing Muslim Uyghurs to work. It denies the allegations.

Japan's Fast Retailing, $93 billion Zara-owner Inditex, France's SMCP, majority-owned by China’s Shandong Ruyi, and $8 billion Skechers are the targets of the French probe. Given the bulk of Chinese cotton comes from the region, it’s hard to avoid and tracing it is notoriously difficult. Those who have taken a tougher stance, including $34 billion H&M, are under Chinese boycott. Other European countries will be under pressure to follow France’s lead. Washington has already been impounding shipments it believes contain Xinjiang thread. Picking a side in the fracas is becoming harder. (By Dasha Afanasieva)

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(Editing by Ed Cropley and Karen Kwok)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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