China adds US firms PVH Group, Illumina to Unreliable Entity List
China adds US firms PVH Group, Illumina to Unreliable Entity List

China adds US firms PVH Group, Illumina to Unreliable Entity List

China has decided to add US-based apparel company PVH Group and biotech company Illumina, Inc. to the Unreliable Entity List in a move to safeguard national sovereignty, security, and development interests, according to a notice released by the Ministry of Commerce’s Bureau of Security and Control on Tuesday.

The decision is based on China’s Foreign Trade Law, National Security Law, Anti-Foreign Sanctions Law, and relevant regulations of the Unreliable Entity List, it said.

The two entities violated fair market transaction principles, disrupted normal business dealings with Chinese companies, and imposed discriminatory measures, causing serious harm to the legitimate rights and interests of Chinese enterprises, according to the notice.

China’s Ministry of Commerce introduced the Unreliable Entity List regulations in September 2020, allowing it to take countermeasures against foreign companies that cut off trade with or impose discriminatory measures on Chinese firms.

PVH (Phillips-Van Heusen, NYSE: PVH), founded in 1881 and headquartered in New York, operates in the apparel industry, selling men’s, women’s, and children’s clothing as well as footwear. PVH owns well-known brands such as Calvin Klein, Tommy Hilfiger, Izod, Van Heusen, and Arrow.

China’s move against PVH are linked to its boycott of cotton and other raw materials from Xinjiang. On September 24, 2024, the ministry launched an investigation into PVH based on reports and complaints that the company had violated fair market principles by cutting off transactions with Chinese entities related to Xinjiang and imposing discriminatory measures.

PVH was required to submit a written report within 30 days of the announcement, providing documentation on whether it had taken discriminatory actions against Xinjiang-related products in the past three years.

A Ministry of Commerce official stated that PVH had allegedly boycotted Xinjiang cotton products without factual basis, violating fair market transaction principles and harming the legitimate interests of Chinese enterprises, as well as China’s sovereignty, security, and development interests.

Illumina (NASDAQ: ILMN) is a US biotechnology company founded in 1998 and headquartered in San Diego, California.

On September 9, 2024, the US House of Representatives passed the Biosecurity Act (H.R.8333), which targeted several Chinese companies, including BGI Group companies such as BGI Genomics (300676.SZ), MGI Tech (688114.SH), and its subsidiary Complete Genomics, were added to a list of specified biotech firms.

In late 2023 and early 2024, US lawmakers introduced biosecurity bills that sought to ban foreign-controlled biotech firms from operations deemed national security threats and prevent them from receiving federal contracts, grants, or loans funded by U.S. taxpayers.

MGI Tech argued that monopolistic practices in the U.S. gene sequencing industry stifle innovation and raise costs. “This legislation is based on misinformation and baseless accusations,” MGI Tech stated, “and it only serves to help a dominant U.S. company eliminate market competition in the U.S. gene sequencing sector.”