Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Axios on your phone

Get breaking news and scoops on the go with the Axios app.

Download for free.

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios NW Arkansas

Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

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

Juneteenth forces U.S. to confront lasting impact of slavery economy

Photo illustration: Sarah Grillo/Axios. Photo: Corbis, Brittany Murray/MediaNews Group/Long Beach Press-Telegram via Getty Images

Juneteenth, a once-obscure commemoration of emancipation of enslaved people in Texas, has transformed into an annual reminder about how slavery robbed Black Americans of generational wealth.

Why it matters: That lack of generational wealth still denies Black families the economic security that many white families take for granted.

Biden to meet with U.S. financial regulators on Monday

Photo: Drew Angerer via Getty Images

President Biden will meet with financial regulators on Monday.

Driving the news: "The meeting will cover regulatory priorities including climate-related financial risk and agency actions to promote financial inclusion and to responsibly increase access to credit," said press secretary Jen Psaki, according to a press pool report.