How Chinese is Shein?

TO WHICH country does Shein belong? The online apparel giant, headquartered in Singapore, is expected to list its shares in London in the coming months. Earlier this year Donald Tang, its executive chairman, proclaimed it to be American, by virtue of its values and the fact that it makes most of its money there. Meanwhile, most of Shein’s employees are in China, where the company was founded in 2012. All this might suggest Shein is multinational, beholden to no single country. Unfortunately, the matter of nationality is not so straightforward for a firm that straddles China and the West.

Shein is part of a new generation of innovative Chinese companies that has taken the rich world by storm. It now accounts for half of fast-fashion sales in America, and is expected to sell around US$50 billion worth of cheap blouses, skirts and other clothing and accessories globally this year, up from roughly US$32 billion in 2023. That is about as much as H&M and Zara, the West’s two biggest fast-fashion brands, combined. Temu, an overseas offshoot of Pinduoduo, a Chinese e-commerce company, has enjoyed similar success. Some 170 million Americans use TikTok, a video-sharing app controlled by ByteDance, a Chinese tech firm. Chinese companies in industries from gaming to electric vehicles are also expanding in Western markets.

Consumers in the West have lapped up these new offerings. The enthusiasm, however, has not been shared by their governments, which fear that Chinese companies will pilfer citizens’ data or undermine national security. Last year, America passed a law requiring ByteDance either to sell TikTok or leave the country (though its future is uncertain under Donald Trump, who has flip-flopped on the issue). American lawmakers are investigating Shein and Temu over allegations of forced labour in their supply chains (which the companies deny). And in September, America’s government said it planned to remove a trade rule that exempts imports worth less than US$800 from customs duties, from which the two firms benefit. At the same time, Chinese officials have also grown suspicious of these globe-trotting firms, fearing that they will leak sensitive information to foreign adversaries or wriggle their way out of the Communist Party’s grip.