Cecily Zamora
Nike, the world's leading designer, marketer, and distributor of athletic footwear, has had a presence in China since the 1970s. The company has faced controversy over its labour practices in the country, including the use of subcontracting, low wages, and the repression of independent union organising. Human rights groups have called on Nike to pressure local governments to release jailed labour leaders and change labour laws to reflect internationally recognised labour rights. Nike has also faced criticism for its stance on Xinjiang cotton, with investors putting pressure on the company over alleged human rights abuses in the region.
| Characteristics | Values |
|---|---|
| Labour laws | Lack of enforcement of labour laws and standards, repression of independent union organising |
| Human rights | Allegations of forced labour in the Xinjiang region |
| Wages | Low wages |
| Subcontracting | Nike distances itself through subcontracting, benefiting from low production costs without any direct lines of responsibility |
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What You'll Learn
The impact of China's lack of enforcement of labour laws
China's lack of enforcement of labour laws has had a significant impact on Nike's operations in the country. The sportswear giant has been accused of benefiting from the lack of labour law enforcement to increase its profits and reduce its direct responsibility.
By subcontracting production to factories in China, Nike distances itself from labour law violations and takes advantage of low production costs. The company can respond quickly to changing trends and pass on the uncertainty and insecurity to subcontractors and, ultimately, the workers. For example, Nike can change orders with little to no notice, forcing subcontractors to rapidly adapt.
The lack of labour law enforcement also enables the repression of independent union organising. In 1996, two independent trade unionists in Shenzhen were charged with subversion for disseminating pamphlets on workers' rights. This sends a signal to management that China's Labour Law will not be enforced, giving management absolute power and rendering existing monitoring systems ineffective.
Nike's subcontractors have been accused of consistently violating numerous regulations in China's Labour Law and Nike's Code, constituting systemic abuse of workers. For instance, there have been reports of workers being fired without cause, such as becoming pregnant, despite protections outlined in Chinese Labour Law.
The lack of enforcement has also enabled Nike to become entangled in forced labour controversies. In 2020, a report revealed that the Chinese government forced Uyghur women to produce Nike shoes in the Taekwang factory. Nike claimed the factory no longer used forced labour, but the credibility of its audits has been questioned.
Overall, China's lack of enforcement of labour laws has allowed Nike to benefit from low production costs, distance itself from labour law violations, and face limited consequences for systemic abuses of workers' rights.
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The right to organise and repression of independent unions
In China, all workers have the right to form or join a trade union. However, this right is limited by the fact that all enterprise unions must be affiliated with the All-China Federation of Trade Unions (ACFTU). This is the only trade union in China, and workers are denied the right to set up independent unions. Any attempts to establish an independent trade union are seen as a political threat by the Chinese Communist Party (CCP). The CCP has a history of repressing independent organizing, with labour representatives being arrested and detained for months without formal charges. The only time an independent union was established in China was the Beijing Workers’ Autonomous Federation (BWAF) in 1989, which was disbanded after a military crackdown.
The lack of legal enforcement of labour laws in China means that employers have significant power over labour relations and workers' pay and conditions. Workers often lack representation from the official trade union, leaving them to ensure labour laws are enforced through collective action or by taking complaints to arbitration or the courts. Labour dispute arbitration committees (LDACs) handle most routine labour disputes in China.
The repression of independent unions in China has been criticized by human rights organizations such as the International Federation for Human Rights (FIDH) and the World Organisation Against Torture (OMCT). They argue that China's restrictive legislation enacted in 1998 goes against the freedom of association enshrined in the Universal Declaration of Human Rights and the International Covenant on Civil and Political Rights, which China signed in 1998.
Companies like Nike benefit from the repression of independent unions in China as they do not have to deal directly with production. They distance themselves through subcontracting, avoiding direct lines of responsibility while still benefiting from low production costs. Subcontracting allows Nike to respond quickly to changing fashions and pass on the insecurity to subcontractors and ultimately, the workers.
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Human rights violations and forced labour in Xinjiang
The Xinjiang Production and Construction Corps (XPCC), a paramilitary organisation with administrative control over several areas in the region, has been implicated in these abuses. The XPCC forces members of prison populations and local communities to work in hazardous industries such as mining, construction, and manufacturing. The products of their labour are injected into international supply chains, spreading forced labour complicity globally.
The United States government has taken steps to address these abuses, issuing sanctions against the XPCC and its leadership in 2020. The Department of Homeland Security's Customs and Border Protection has also issued Withhold Release Orders to block goods connected to forced labour in Xinjiang from entering the United States.
Despite these efforts, companies such as Nike have faced challenges in ensuring their supply chains are free from forced labour. Due to Chinese government restrictions, it is "impossible" to conduct effective due diligence on forced labour in Xinjiang supply chains, according to a US official. As a result, some companies have had no choice but to stop operating in the region to comply with US law.
The situation in Xinjiang has also led to consumer boycotts of companies that are perceived to be complicit in human rights abuses. Nike, for example, faced a boycott over its stance on Xinjiang cotton, although its shoes still sold out.
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Nike's response to changing styles and fashions
In the 1980s, Nike released the Air Force One sneaker, which incorporated pressurized air technology to enhance athletic performance. Unexpectedly, the shoe became a fashion sensation, particularly in New York, where it acquired the nickname "the uptowns". This marked the beginning of Nike's collision of sport and design, creating a unique connection with the New York City community.
To adapt to changing styles, Nike has employed various strategies. In 2014, they launched NikeLab, a platform showcasing product innovation and the intersection of sports and fashion. They have also collaborated with athletes and designers, expanding their reach and tapping into new trends. One notable collaboration was with Michael Jordan, which revolutionized the sports industry and elevated athletes to global icons.
Nike has also responded to changing fashions by embracing sustainability and environmentalism. At the 2012 Olympics, they introduced Flyknit technology, an ultra-light yarn manufactured with minimal waste. This not only improved athletic performance but also became a fashion symbol, allowing Nike to explore new expressions of style.
However, Nike has faced challenges in responding to changing styles and fashions. In 2025, they faced criticism for their defensive move of introducing a line of $100 sneakers in various markets, indicating a shift in their strategy. Additionally, Nike has faced backlash over human rights violations in their supply chains, particularly regarding forced labour in Xinjiang, China. As a result, they have faced boycotts and criticism from human rights organizations and governments.
To address these challenges, Nike has made changes in leadership, with Elliott Hill appointed as the new leader to resume past strategies and protect the brand's essence. Despite these challenges, Nike continues to adapt to changing styles and fashions, leveraging its innovative marketing and performance innovations to stay at the cutting edge.
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The impact of China's criminal law system on human rights
China's criminal law system has had a significant impact on human rights within the country, with critics arguing that the ruling Communist Party restricts human rights and imposes absolute control on its citizens. Amnesty International has reported that human rights lawyers in China face intimidation, control, and suppression from the state for taking up sensitive cases. The lawyers are threatened with the suspension of their licenses, disbarment, and criminal punishment.
The Chinese government has been accused of misusing its criminal law system to restrict human rights, particularly in the Xinjiang region, where forced labour of Uyghurs and other persecuted groups has been reported. The US and other countries have banned exports to certain Chinese companies due to these human rights abuses, and companies like Volkswagen have exited their Xinjiang plants.
Additionally, China's household registration and temporary residence permit system have been criticised for restricting the freedom of association, including the freedom to choose membership in trade unions and political parties, which is a right guaranteed under the Universal Declaration of Human Rights. The Chinese government also does not recognise same-sex marriage or civil unions, and according to Chinese criminal law, a man who has been raped cannot accuse his attacker of rape.
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Frequently asked questions
China's labour law has allowed Nike to benefit from low production costs and no direct lines of responsibility. This is because Nike distances itself from production through subcontracting.
China's labour law has resulted in workers facing massive unemployment, low wages, and repression of independent union organising.
US law has pressured Nike to stop operating in China due to allegations of forced labour in the Xinjiang supply chains.
In China, workers are denied the basic right to organise independent unions. This has allowed Nike to benefit from low production costs and no direct lines of responsibility.
Nike has faced criticism for the environmental impact of its factories in China. However, the company has taken steps to become more sustainable by recycling materials and cutting down on the extraction of raw materials.
