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Illustration: Sarah Grillo/Axios

By incentivizing companies to go along with the Chinese government's repressive policies in Xinjiang and imposing punishments on those that don't, the Chinese Communist Party has made complicity in repression profitable for some companies — and for others, even mandatory.

The big picture: With the second-largest market in the world — one that is projected to surpass the U.S. to take the top spot by 2028 — the Chinese Communist Party has an enormous amount of power.

  • Since Beijing has made access to the potential riches of China's markets contingent upon toeing party lines, companies face growing financial incentives to accede to China's demands — unless they face counterpressure, in the form of sanctions, export bans, or other actions, from their home governments.

Driving the news: Last week, Chinese social media users lambasted Swedish clothing retailer H&M for its previous statement disavowing the use of Xinjiang cotton, amid a state-supported nationalist backlash. H&M stores were removed from Baidu maps and their products disappeared from Chinese e-commerce platforms.

  • Other multinational brands including Nike, New Balance, and Hugo Boss soon faced a similar boycott. Hugo Boss then posted a Chinese-language statement on Weibo saying the brand would “continue to purchase and support Xinjiang cotton" — but then deleted the post the next day.

Context: The Chinese Communist Party has put at least one million Uyghurs in mass internment camps in its northwest region of Xinjiang, banned most religious practice, used forced sterilization, and destroyed cultural heritage sites, in what some international human rights lawyers and several governments are now calling genocide.

  • Hundreds of thousands of Uyghurs have reportedly been pushed into factory work and cotton production as part of the Chinese government's forced assimilation campaign, potentially tainting global supply chains and resulting in a U.S. import ban on all cotton and tomato products from Xinjiang.
  • A United Nations human rights panel recently warned that more than 150 companies, including "well-known global brands," were connected to "serious allegations" of forced labor and other abuses in Xinjiang.

What's happening: Beijing is increasingly incentivizing companies to proactively contribute to its domestic repression and global geopolitical goals.

  • The Chinese government has required domestic facial recognition companies to develop software that can recognize Uyghur faces, and has increasingly worked to integrate these requirements into national industry standards. Chinese companies, in turn, are working hard to set international standards in emerging industries.
  • The government has provided incentives for foreign and domestic companies to open facilities in Xinjiang. Demonstrating economic development in the region could burnish the Chinese Communist Party's policies there.
  • Companies that accept Uyghur "labor transfers" — a term referring to a coerced labor program — may receive government subsidies. Some Chinese suppliers who receive labor transfers are intertwined in supply chains around the world, including for major global brands.

What to watch: The U.S. has banned cotton and tomato imports from Xinjiang, and the U.S. and the EU have levied sanctions on several Chinese government officials and entities deemed complicit in Xinjiang rights violations.

  • Those actions can help push the private incentive structure in a direction that marginalizes human rights violators — but only if the measures are adopted by major markets and consistently enforced.

Go deeper

In photos: Scenes from some of the worst fires raging in the U.S.

A home explodes into flames as the Dixie Fire rips through the Indian Falls neighborhood of unincorporated Plumas County, California, on July 24. The blaze started near the origin of the deadly 2018 Camp Fire and has churned burned over 185,000 acres. Photo: Josh Edelson/AFP via Getty Images

Out-of-state crews went to Montana to tackle a wildfire that wounded five firefighters as Australia sent a large air tanker to help Californian firefighting efforts, as 88 large blazes raged in the U.S. Saturday.

The big picture: Montana Gov. Greg Gianforte (R) tweeted his thanks to Utah and California for sending crews over the weekend, as the two states battle their own blazes. The Australian tanker arrived in Calif., this week, where Gov. Gavin Newsom (D) proclaimed a state of emergency for four northern counties Friday.

Updated 3 hours ago - Sports

Swimmer Chase Kalisz first American to win Tokyo Olympics gold medal

Chase Kalisz of Team United States celebrates after winning the Men's 400m Individual Medley Final on day two of the Tokyo 2020 Olympic Games at Tokyo Aquatics Centre in Tokyo, Japan. Photo: Al Bello/Getty Images

Swimmer Chase Kalisz has become the first Team United States Olympian to win gold at the Tokyo Games.

The big picture: The Rio 2016 silver medalist's winning time in the men's 400 meters Individual Medley Final was 4 minutes 9.42 seconds. His teammate Jay Litherland took silver, .86 seconds behind him. Moments later, Kieran Smith grabbed a third medal for the U.S. when he won bronze in the 400-meter freestyle.

Go deeper: Full Axios coverage

Editor's note: This article has been updated with new details throughout.

4 hours ago - Sports

Gymnast Suni Lee to make historic debut at Olympics

USA's Sunisa Lee performs at the FIG Artistic Gymnastics World Championships in Stuttgart, Germany, on Oct. 13, 2019. Photo: Lionel Bonaventure/AFP via Getty Images

When Sunisa "Suni" Lee steps up to the mat at the Tokyo Olympics, she'll be thinking of her father's pep talks even as he watches from thousands of miles away.

The big picture: The 18-year-old made history this year when she became the first Hmong American to be named to a U.S. Olympic team. Even more special was her dad's presence in the crowd at the Olympic trials — it was only the second time he watched her compete in person since a 2019 accident paralyzed him from the chest down.