H & M Announced To Cut Off Business With Service Enterprises

H & M, a well-known Swedish clothing brand, announced recently that in view of the so-called "forced labor" problem, the company will discontinue its "indirect business contacts" with China's textile giant Huafu company, according to media reports such as AFP and Pengbo.

In March this year, the Australian Institute for strategic policy (ASPI) produced a report accusing H & M of doing business with Huafu in Anhui Province, and that Huafu's products had so-called "forced labor" problems. But H & M once denied direct business with Huafu.

On September 15, the U.S. Customs and Border Protection (CBP) announced a ban on imports from five Chinese companies and one manufacturing plant on suspicion of forced labor. H & M immediately announced that it would terminate its "indirect business dealings" with Huafu company, and also investigate all Chinese suppliers to ensure that there is no so-called "forced labor".

Huafu company is a well-known textile company in China, and started to invest in Xinjiang in 2006. According to the data on its official website, Huafu Xinjiang company has formed a scale with a spinning capacity of 900000 spindles, with an annual output of 120000 tons of colored yarn; the Huafu Aksu Industrial Park, which is under construction, has a project scale of 1 million spindles of colored yarn, which can achieve an annual output of 160000 tons of colored yarn.

H & M company is an international famous fashion retail giant. As of August 31, 2020, H & M has 449 stores in mainland China. With the improvement of the epidemic situation in China, H & M's sales in mainland China have gradually recovered. Headquartered in Shanghai, Haines Morris (Shanghai) Commercial Co., Ltd. (China H & M company) is a subsidiary of Swedish parent company H & M Hennes & Mauritz AB in China. According to reports, H & M's pre tax profit in the third quarter reached 2 billion Swedish kronor, eight times the analysts' expectation.