Chinese and US flags wave near The Bund, before the US trade delegation meets their Chinese counterparts for talks in Shanghai, China, July 30, 2019.
Aly's song | Reuters
BEIJING — China's Ministry of Commerce said Tuesday that it was launching a probe At Calvin Klein's parent company PVH Group for alleged business disruptions in its Xinjiang supply chain.
The ministry said the investigation is part of its “untrustworthy entities” list mechanism. Launched in 2019, shortly after the U.S. blacklisted Huawei, the list is China’s version of the U.S. Commerce Department’s entity list that restricts named companies from accessing items originating in the United States.
The U.S. Department of Commerce announced plans Monday to ban the import or sale of cars with specific hardware or software. linked to China or Russia.
China's Commerce Ministry did not explain on Tuesday why it was investigating PVH now, but said the U.S. retail group had 30 days to respond. U.S. defense companies previously on the “unreliable entities” list are No imports or exports related to China are allowed.
The Chinese investigation alleges that PVH “targeted Xinjiang suppliers in violation of the principles of normal market transactions, with disruptions to normal transactions with Chinese companies, individuals and other persons, along with other discriminatory measures,” according to a CNBC translation of the Chinese text.
PVH said in a statement to CNBC: “As a matter of company policy, PVH maintains strict compliance with all relevant laws and regulations in all countries and regions in which we operate. We are in communication with the Chinese Ministry of Commerce and will respond in accordance with relevant regulations. We have no further comment at this time.”
The group, which also owns Tommy Hilfiger, is one of several foreign retailers that have faced scrutiny in China over their efforts to distance themselves from alleged forced labor in China's Xinjiang region.
In a July 2022 Corporate Responsibility ReportPVH said Xinjiang is one of the regions where direct or indirect sourcing is not permitted.
Calvin Klein and Tommy Hilfiger's international revenue fell 4.3% year-over-year to $1.38 billion in the quarter ended Aug. 4, weighed down by a “challenging consumer environment in Asia Pacific, particularly in China and Australia,” PVH said in a statement. earnings release.
These overseas revenues accounted for more than half of PVH's total revenue of $2.07 billion for the quarter.
Xinjiang is home to the Uighur Muslims, who have been identified by the United Nations, USA, United Kingdom and others as a repressed ethnic group. China has repeatedly denied allegations of forced labor and other abuses in Xinjiang. The government says facilities there that the United States, Britain, Canada and human rights groups have characterized as internment camps are actually vocational training centers.
—CNBC's Sonia Heng contributed to this report.