China launches probe into U.S. company suspected of market discrimination

China's Ministry of Commerce said on Tuesday it has launched a probe into U.S. company PVH Corp. under the unreliable entity list framework for suspected discriminatory measures and other practices violating market trading principles regarding Xinjiang-related products.

The company, which owns fashion brands like Tommy Hilfiger and Calvin Klein, is suspected of boycotting cotton products from China's Xinjiang Uygur Autonomous Region without any factual basis and terminating transactions with Chinese companies and other organizations or individuals, according to the ministry.

Such practices have "seriously undermined the legitimate rights and interests of relevant Chinese enterprises and jeopardized China's sovereignty, security and development interests," said a spokesperson for the ministry.

The investigation was initiated based on recent reports from relevant organizations, and PVH Corp. is expected to provide information to the office of the unreliable entity list mechanism within 30 days as of Tuesday's announcement to explain if it had taken discriminatory measures against Xinjiang-related products in the past three years, said the ministry.

It said organizations or individuals may report to the office and provide evidence regarding the company's violations of market principles, and appropriate measures will be taken based on the results of the investigation.

China introduced the unreliable entity list system in September 2020 to protect its national interests and business environment. However, it was not until February 2023 that the Chinese government first added foreign entities to the list.

The country has been exercising prudence when handling issues related to the unreliable entity list, which targets only a few foreign entities that disrupt market rules and violate Chinese laws, the ministry explained.

The spokesperson reiterated the Chinese government's firm commitments to advancing high-standard opening up, upholding the multilateral trade system, and safeguarding the legitimate rights and interests of all market participants.

"Foreign entities that operate with integrity and abide by the law have no reason to be concerned," said the spokesperson.