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China cotton group promotes Xinjiang crop with 361 Degrees

Sportswear maker shows new shirts to mark co-branding and supply partnership

SHANGHAI -- Chinese sportswear maker 361 Degrees International said Monday that it had formed a co-branding and supply partnership with the China Cotton Industry Alliance that will cement the company's use and promotion of Xinjiang cotton.

"The natural conditions for cotton production in Xinjiang are superior, and it is entirely possible to produce high-quality cotton that exceeds Australian cotton standards," said Liu Qiuhua, general manager of 361 Degrees Apparel Product Center in a statement.

The use of cotton from the northwestern minority region of China has been in the spotlight in recent weeks after Western governments sanctioned Beijing officials over alleged human rights abuses in Xinjiang and several declared that acts of genocide have been committed there.

A number of Western retailers and clothing brands, including H&M, Nike and Burberry then came under attack from Chinese state media and social media users over past statements of concern about reports of forced labor in Xinjiang, the source of most of China's homegrown cotton. Amid the furor, several Chinese companies left the Better Cotton Initiative, a Switzerland-based group that promotes good practices in cotton farming and production.

The new partnership is a first for the China Cotton Industry Alliance, which 361 said will give it dedicated access to "the best cotton fields" as well as high-quality raw cotton, yarn and fabric.

To mark the alliance, 361 held a showcase event in the regional capital of Urumqi with "models from ethnic minorities," including ethnic Kyrgyz professional basketball player Kyranbek Makan, to show off a new line of T-shirts with Xinjiang designs.

361 Degrees promoted its collection of new T-shirts with Xinjiang designs on its Tmall online store. (Captured images from 361 Degrees website on April 27, 2021)

Beijing has denied all reports of abuse or genocide against Xinjiang's Muslim minorities, but has said that it has been forced to take extraordinary measures to combat what it describes as separatist terrorism.

The Xinjiang controversy has added to a shift in sentiment among Chinese consumers toward local brands, according to a Citigroup survey of 1,000 Chinese consumers earlier this month.

According to a research note by analyst Paul Lejuez, 77% of respondents said the controversy had made them less likely to buy foreign-branded sportswear over the next 12 months. Local brands Li Ning and Anta have particularly benefited from the trend. 

Shares of Hong Kong-listed 361 Degrees have risen 31.7% over the past month. Fujian Province-based 361 Degrees distributes its sportswear through over 6,000 retail stores in China and some 20 international markets including the U.S., Brazil and Europe, according to its website. The company's highest-profile endorser in the U.S. is Aaron Gordon of the National Basketball Association's Denver Nuggets. 

The China Cotton Industry Alliance, formed in 2016, is committed to building a high-quality cotton industry supply chain by sourcing from Xinjiang and other areas and last month vowed to protect the region's cotton sector amid Western pressure. With an eye toward decoupling from Western suppliers and clients, Beijing is seeking to strengthen cotton sector ties with Central Asian nations, China Daily reported last week.

"If the cotton-making technology in Xinjiang is applied to Central Asian countries, the production in the region will see rapid development," the paper quoted Li Fuguan, head of China's Institute of Cotton Research.

Xinjiang's cotton accounted for 5.16 million tons, or 87%, of China's total production last year. China produced 5.9 million tons of cotton while importing another 2 million tons, making it both the largest producer and consumer of cotton.

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