Does Shein Use Xinjiang Cotton? It Depends.
- Shein's general counsel faced intense questioning from British lawmakers regarding the sourcing of cotton from China's Xinjiang region, ultimately revealing that the company requires contract manufacturers to only source cotton from approved regions to comply with U.S. laws.
It was the British parliamentary hearing heard round the world. Unable to respond to what one visibly aggravated lawmaker said were “very, very, very simple questions,” including whether Shein sourced its cotton from China’s controversial Xinjiang region, Yinan Zhu, the e-tail leviathan’s general counsel for Europe, the Middle East and Africa, was lambasted for “being disrespectful,” “obfuscating wildly” and “bordering on contempt.”
Two weeks after the Jan. 7 to-do , Zhu provided Liam Byrne, Member of Parliament for Birmingham Hodge Hill and Solihull North and chair of the House of Commons’s Business and Trade Committee, with some—if not all—of the answers he and his colleagues were seeking. And it’s clear that perhaps the questions were not so simple after all, at least from the China-founded firm’s vantage point.
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So do Shein products contain Xinjiang cotton? Or, to put it another way, do they contain Chinese cotton, more than 90 percent of which hails from Xinjiang? It depends. Zhu wrote that the company does not “prohibit” the use of Chinese cotton “specifically where such use would not contravene the laws and regulations of the jurisdictions in which we operate.” But what this means is that Shein requires that contract manufacturers of merchandise destined for the United States, where the Uyghur Forced Labor Prevention Act makes any content from Xinjiang verboten, only source cotton from “approved” regions such as Australia, Brazil, India, the United States, and in limited cases, certain countries in the EMEA and Southeast Asia regions.
“We have developed a proprietary materials traceability system that provides visibility into the origin of the cotton used in our products to ensure our compliance with applicable and relevant U.S. laws, including the UFLPA,” Zhu said. “This system integrates supply chain documentation relating to yarn, fabric and finished products to help ensure that those products do not contain cotton sourced from unapproved regions.”
The UFLPA was signed into law in 2021 amid mounting allegations of what the U.S. government has characterized as “genocide” against Uyghurs and other Turkic Muslim minorities, complete with a campaign of “imprisonment, torture, enforced sterilization, and persecution” that Beijing has repeatedly and vociferously denied. Unless compelling evidence is provided, the rule says, any product manufactured in whole or in part in Xinjiang is assumed to be the result of forced labor and therefore barred from infiltrating the American market.
Zhu said that any supply chain partner that signs Shein’s code of conduct has to agree that it will not use forced labor, including prison and bonded labor, and that it will comply with the International Labour Organisation’s forced labor conventions in their direct or indirect procurement activities. To complement this agreement, the Singapore-headquartered company has also adopted the so-called Shein Responsible Sourcing , or SRS, program, which “facilitates compliance” by establishing “clear definitions and penalties” for violations and provides for “comprehensive” on-site audits conducted by both its in-house auditors and “internationally renowned” third-party auditors from the likes of Bureau Veritas, SGS, TÜV Rheinland and Qima.
Cotton from “unapproved regions,” like Xinjiang, still manages to sneak in, Zhu admitted. Since 2022, Shein has partnered with Oritain, a New Zealand-based origin-testing firm that’s been called “CSI, but for cotton.” In November 2023, Oritain found that less than 2 percent of the Missguided owner’s cotton tested positive for unapproved cotton, lower than the industry average. Zhu, in a belated response to Byrne’s parliamentary query about the latest figures, said that testing conducted during 2024 found the outlawed amount to be around 1.3 percent, though she didn’t explicitly call out Xinjiang. “Xinjiang,” in fact, is used only twice in the 12-page document, with both instances in the context of the Business and Trade Committee’s questions. “Uyghur” is mentioned only once, in reference to the UFLPA. What is unsaid is likely on purpose .
Zhu said that Shein decided in 2024 to expand its testing regime with Oritain to a five-year program that “reinforces our commitment to ensuring the highest levels of compliance from manufacturing to sale.” Any indication that a contract manufacturer is using forced or child labor is also considered an “immediate termination violation” that, prior to October 2023, had resulted in a suspension of orders and a 30-day opportunity for remediation but now leads to an immediate termination of the business relationship.
“Since we adopted the stricter approach in October 2023, we have identified two cases of underage labor in our supply chain, which resulted in immediate termination of the non-compliant suppliers, in line with our current SRS policy,” Zhu said. “Both individuals were working for the respective manufacturer for less than six weeks before an audit discovered the violation.”
Byrne intends to write back to Shein to ask if it sends products made with Xinjiang cotton to the United Kingdom, a spokesperson for the Business and Trade Committee told Reuters on Friday. The timing of Zhu’s testimony also dovetails with Tuesday’s announcement that the Joint Committee on Human Rights will be launching a new inquiry to examine how the United Kingdom’s legal and voluntary frameworks underpin its response to forced labor in international supply chains.
“The complexity and range of global supply chains have meant that consumers in the U.K. may be buying goods made using forced labor,” David Alton, chair of the committee, said in a statement. “We want to see if current legislation is effective and whether lessons could be learned from the approaches taken by other countries. We also want to explore how businesses can manage the risk of forced labor in their supply chains and better protect consumers.”
IPO a go?
Shein products, because they’re dispatched in small, low-value shipments, fall into a liminal space for enforcement in the United States. They’re still beholden to the UFLPA, but they can also bypass more intense scrutiny because of the so-called de minimis loophole that allows items worth less than $800 to enter the United States duty-, tax- and relatively fuss-free. This could change with de minimis reform that seeks greater visibility into the 4 million parcels that enter the United States daily through that route. Or Shein’s ultra-fast, ultra-cheap business model could be upended by President Donald Trump’s promised 10-60 percent “punitive” tariffs on China, its largest manufacturing base.
On Thursday, Donald Tang, the company’s executive chairman, appeared unfazed, saying that Shein’s offerings can remain at their cut-rate prices—think $15 maxidresses and $10 sneakers—as long as the proposed tariffs are “applied equally.”
“Affordability is a big anchor.…It’s the whole package of it, it’s a value for [your] money,” Tang told CNBC reporter Sara Eisen during an interview at the World Economic Forum in Davos, Switzerland. Still, he demurred when asked about Shein’s much-talked-about public float on the London Stock Exchange, saying only that “being a public company embraces the very universal and unique mechanism for accountability.”
Zhu also declined to respond to Byrne’s question about why Shein stopped seeking a listing on the New York Stock Exchange, which appeared to be Plan A. But then a bipartisan phalanx of U.S. legislators, from Democrat Congresswoman Jennifer Wexton to Republican Senator—and now Secretary of State— Marco Rubio , voiced their concerns about Shein’s reported “state influence” (read: China) and potential use of Uyghur forced labor, even writing to the Security and Exchange Commission to urge it to require independently certified evidence that Shein was free and clear of either or else scupper the IPO altogether. Of its London aspirations, Zhu was also tight-lipped.
“Shein is not able to comment on news reports regarding any possible listings,” she said. “We regularly evaluate the capital markets to identify suitable opportunities for a listing of our shares. While we cannot confirm plans for a listing at this time, we are pleased to share with the committee our view that the United Kingdom is a priority market for the business, and we look forward to a period of sustained growth here.”
Stop Uyghur Genocide is one organization that is intent on freezing a London listing. Its lawyers at Leigh Day had sent the Business and Trade Committee a dossier containing what it said demonstrated “clear, identifiable links” between Xinjiang cotton production and forced labor, along with “publicly available evidence” that connected Shein’s supply chains to the same. The Financial Conduct Authority, Stop Uyghur Genocide said, should block Shein’s listing because there is “good reason” to believe that its supply chains benefit from modern slavery, violating Britain’s 2002 Proceeds of Crime Act.
“We have strong concerns about the possibility that Shein’s supply chain may be linked to forced labor practices reported in the Uyghur region of China,” Rahima Mahmut, executive director of Stop Uyghur Genocide, said after the hearing. “It is vital that these concerns are fully examined by our institutions, and we are pleased that evidence we provided was used by the select committee in its robust interrogation of Shein.”
In a response published by the Business and Trade Committee on Friday, Julia Hoggett, CEO of the London Stock Exchange, said she couldn’t comment on specific companies but that Britain’s regulatory standards are “among the highest in the world,” with scrutiny on those that seek to access public markets “significantly higher” than that imposed on those privately owned.
Nikhil Rathi, chief executive of the Financial Conduct Authority, also sidestepped any specific mention of Shein, saying that the agency’s role is to “ensure that the requisite disclosures have been made so that potential investors can understand the risks.” But it also has its limits.
“A key part of the regime is that the issuer and the directors are responsible for the factual accuracy of the statements made in a prospectus and are subject to a range of legal liabilities as a consequence,” he said. “It is for the issuer and its directors to confirm that the information provided is accurate. Beyond the process described above, the FCA does not undertake independent verification of the factual statements in a prospectus: in fact, we have no investigatory powers that would enable us to do so.”
A dissatisfied Bryne has written back, Reuters said, to ask the bodies what protections the United Kingdom has against corporations that might flout modern slavery laws.
“What we want to know is whether you ask firms to prove that there are safeguards against the use of forced labor and we want to know whether you ask firms whether they’re using goods or products from Xinjiang in their supply chains,” he said. That would ensure that “if and when the day comes that Shein seeks to float on the LSE we have the right safeguards around forced labor in place on the statute book.”
