June 28, 2021
Last week, we took a look at the latest developments concerning China, including information reportedly provided by a high-level Chinese defector linking the Wuhan lab with the military bioweapons program, and also the crack-down by the CCP on academics and billionaire business moguls to keep them in line. Today, we see how they must have put the screws to Nike, as that corporation’s Chief Executive Officer John Donahoe said in a phone call to Wall Street analysts, “Nike is a brand that is of China and for China.”
That statement, part of a transcript released by Nasdaq, seems oddly inconsistent, considering that as recently as March, Nike expressed concern about “reports of forced labor in, and connected to, the Xinjiang Uyghur Autonomous Region.” In a statement, they said that “Nike is committed to ethical and responsible manufacturing and we uphold international labor standards...Nike does not source products from the XUAR and we have confirmed with our contract suppliers that they are not using textiles or spun yarn from the region.” Read the whole statement, and it sounds as though they were concerned and being quite diligent about this.
But the inconsistencies are stark. According to an article in THE FEDERALIST, there are believed to be over 1 million Uyghur Muslims being held in Xinjiang and used for forced labor to deliver 80 percent of Chinese cotton. And last November, when the Uyghur Forced Labor Protection Act was making its way through the House –- overwhelmingly passed 406 to 3 –- Nike joined with Coca-Cola and Apple to lobby against it. The bill prohibits “certain imports” from Xinjiang and imposes sanctions on those responsible for human rights violations in that region. Why would American corporations have been lobbying against THAT?
Nike is the biggest sports brand in all of China. Donahoe’s revealing phone call came as a new earnings release shows Nike’s sales in China for the past three months at $1.9 billion. This is 17 percent higher than the same time last year.
Incidentally, Nike gave over $604,000 in campaign donations in 2020, 80 percent of which went to Democrats, no doubt because they prefer the Democrats’ looser policy towards China.
“We’ve been in China over 40 years,” Donahoe said in the phone call, “and the biggest asset is consumer equity...it’s real; I saw it in my first week on the job.”
We did a little research to try to understand what Donahoe meant by “consumer equity" regarding their marketing plan in China. In general, this term translates to “the present value of the total revenues that the customer base will generate in its lifetime.” This value is driven by three factors: perceived value for the money, emotional connection to the brand, and loyalty to the brand. The greater the consumer equity, the more future revenue can be derived over the lifetime of its clients.
And apparently, in his first week on the job, Donahoe saw evidence that these measures of long-term profitability are strong in China. When it comes to China, Nike is playing the long game, and so they have to stay on the CCP’s good side.
In light of that, a story in the WASHINGTON EXAMINER made some sense out of Nike’s flip-flopping. Apparently, after Nike’s statement in March, they were hit with a backlash on China’s social media. Looks as though the CCP has pulled Nike back into line.
In March of 2020, the Australian Strategic Policy Institute reported that “the Chinese government has facilitated the mass transfer of Uyghur and other ethnic minority citizens from the far west region of Xinjiang to factories across the country. Under conditions that strongly suggest forced labor, Uyghurs are working in in factories that are in the supply chain for 82 well-known global brands in the technology, clothing and automotive sectors, including Apple, BMW, Gap, Huawei, Nike, Samsung, Sony and Volkswagen.”
According to this report, “Since 2017, more than a million Uyghurs and members of other Turkic Muslim minorities have disappeared into a vast network of ‘re-education camps’ in the far west region of Xinjiang, in what some experts call a systematic, government-led program of cultural genocide.” Inside these camps, detainees are forced to undergo political indoctrination, to renounce their culture and religion, and even in some instances to undergo torture. It’s a harsh, military-style life in which the workers are under constant surveillance and the threat of detention.
“There is mounting evidence that that many Uyghurs are being forced to work in factories within Xinjiang,” the report says. “...Some factories appear to be using Uyghur workers sent directly from re-education camps.”
This report is an eye-opener, a must-read. In addition to outlining exactly what China is doing to essentially enslave its ethnic minorities, it also contains a long list of companies, mostly American, “potentially directly or indirectly benefiting” from forced labor. Nike is just one, sharing the honor with many well-known brands. “Some brands are linked with multiple factories,” it says.
I would add that some of these corporations are going overboard right now trying to build an image of “woke-ness” in the United States. How “woke” are they to the idea that slave labor is a bad thing?
Don’t miss Case Study #1: UYGHUR WORKERS MAKING NIKE SNEAKERS IN QINGDAO. It even has pictures.
According to this report, these people who apparently make Nike shoes are not free, are not allowed to practice their faith, and must undergo political indoctrination in “night school” after work. They live and labor in a compound surrounded with barbed wire and watchtowers and are monitored everywhere they go.
Under Case Study #3, about workers making selfie cameras for Apple iPhones, the report says their work assignments were “highly politicized.” According to a local Xinjiang newspaper, the workers “were expected to ‘gradually alter their ideology’ and turn into ‘modern, capable youth’ who ‘understand the Party’s blessing, feel gratitude towards the Party, and contribute to stability.”
In its conclusions, the report says, “The tainted global supply chain that results from these practices means that it is not difficult to guarantee that products manufactured in China are free from forced labor.” Can you say, “MADE IN THE USA”?
This report is quite long and detailed, but I hope you’ll read the whole thing. As for Nike, I would say that hearing from their CEO that the Nike brand is “of China and for China” should be enough to tell us that it’s not for America. Nike's marketing plan seems to be based more in China, anyway. And if they’ve decided it’s worth humoring the CCP to maintain “consumer equity” in China, well, they can have it.
But I hope Americans will renounce any brand loyalty THEY might have had and go to the trouble of looking for shoes, sporting gear and clothing made here –- or at least not in China –- by people who choose the work they do, can think and worship as they please, and don’t exist behind barbed wire.
Finally, if you have access to THE EPOCH TIMES’ “premium” reporting, I recommend a related piece, about the CCP’s manipulation of American companies (like Nike) to shape public opinion, influence government decisions, and acquire U.S. technology.