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The top Republican on the US Senate intelligence committee has urged the UK government to investigate whether Shein, the Chinese fashion group planning to list in London, has used forced labour in its operations.
Marco Rubio, a Florida Republican and China hawk, wrote to UK chancellor Jeremy Hunt to raise concerns about the fast-fashion company, which had considered listing its shares publicly in New York.
“Shein previously sought to list in New York City but failed due to concerns about its unethical and irresponsible business practices. At the time, I warned US securities regulators about Shein’s alleged exploitation of slave labour and trade loopholes,” Rubio wrote. “I now feel a duty of friendship to repeat these warnings and urge caution before the United Kingdom allows Shein to list in London.”
The letter, which was sent on Tuesday, was also addressed to Nikhil Rathi, the chief executive of the UK’s Financial Conduct Authority.
Shein is seeking to list on the London Stock Exchange. Senior UK politicians from Labour and Conservative parties, including Hunt, have recently met with the company.
A prospective London listing would be a boost for the financial centre after a dearth of large IPOs in recent years. However, top UK institutional investors have told the Financial Times that the controversy over Shein’s alleged use of forced labour would deter them from investing in the group.
Human rights groups say ethnic minorities are being used as forced labour in Shein’s cotton supply in the northwestern Chinese region of Xinjiang. The company has denied the claims and said it has a “zero tolerance policy for forced labour”.
The company declined to comment on Rubio’s letter. The UK Treasury said it would not comment given the pre-election period in Britain.
Shein is just one of many Chinese companies that have come under scrutiny over allegations of using forced labour in Xinjiang. In the US, the Biden administration has accused Beijing of committing “genocide” in Xinjiang where more than 1mn Uyghurs and other minorities have been detained in camps.
“Slave labour, sweatshops, and trade tricks are the dirty secrets behind Shein’s success,” Rubio added in his letter to Hunt and Rathi. “I trust you will treat these allegations against Shein with the utmost seriousness, investigate them fully, and take appropriate action to protect investors.”
Shein, which moved its headquarters to Singapore, has also come under criticism for what critics say are practices designed to circumvent US customs enforcement and tax rules. Rubio said it exploited a regulatory loophole that allows it to ship products from China to US consumers without any customs inspections or duties.
Congress is working on legislation that would close that loophole, and Rubio urged the UK to take similar action.
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