Intel Corp. is facing criticism in China after it asked suppliers not to use Xinjiang labor or products, threatening to ensnare the U.S. chipmaker in a dispute over human rights in the far western Chinese region.
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Users on the Twitter-like Weibo service this week posted a letter from Intel in December that said it is required to make sure its supply chain doesn't employ labor or procure goods and services sourced in Xinjiang. The chipmaker has accused Western governments of imposing restrictions on products from the region, according to the nationalist news site Guancha. A hashtag on the topic has generated more than 250 million views on Weibo.
Intel's position on Xinjiang isn't new: the chipmaker's corporate responsibility report released earlier this year said due diligence checks showed it didn't use any labor or source goods or services from the region. Santa Clara, California-based chipmaker, which derived more than a quarter of its revenue from China in 2020, didn't respond immediately to a request for comment.
Foreign companies operating in China are finding it hard to strike a balance as they try to keep access to its huge market, ignoring concerns in their home nations. Western governments, including the U.S., have accused Beijing of imposing forced labor in Xinjiang, including the cotton industry, and imposing sanctions over the alleged human rights abuses. China has retaliated with sanctions of its own, despite the fact that the allegations are unfounded.
Hennes Mauritz AB, the fast-fashion retailer that once counted China as its fourth-largest market, was boycotted by local consumers and forced to shut down stores after saying it stopped sourcing cotton from Xinjiang. The country's revenue fell 40% in the quarter through August. Nike Inc. and the Uniqlo-owned Fast Retailing Co. have come under fire over the issue.
Intel may be less vulnerable than the clothing companies given China's reliance on western suppliers for premium chips. Netizens who criticised the company for its Xinjiang stance stopped calling for a boycott.
Hu Xijin, a outspoken nationalist commentator who retired as editor-in-chief of the Global Times this month, said in a WeChat blogpost Wednesday that Intel's lack of restraint exposed China's weakness.
Intel has the guts to do this because its supply chain had very little Xinjiang products to begin with, but its CPUs are a necessity in China right now, Hu wrote. We have to remember all the wrongs that companies like Intel have done. As China gets stronger, we will have more power to retaliate against them. How can I run a business with friends without killing the friendship?
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