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Online fast-casual goods retailer Shein has scrambled to hide its chairman’s remarks that it is essentially an “American company” as the group’s efforts to distance itself from its Chinese roots threaten to derail IPO approval in the West.
Speaking at a Milken Institute conference in Los Angeles last month, executive chairman Donald Tang said its corporate values meant Shein could be considered an American company, reigniting debate over its origins and prompting employees to try to suppress reports of his notes. gained attention in China.
The conflicting reports about “where Shein is from” matter because Beijing has yet to formally recognize the group’s request to be listed outside China, despite Shein submitting materials to the China Securities Regulatory Commission last November.
A person briefed on the matter said Shein’s moves to distance itself from China came amid government consultations on its foreign listing application.
Approval of the IPO would be tantamount to an unofficial endorsement of founder Xu Yangtian’s model of “working hard” to achieve business success, the person said. “It raises questions of loyalty to China that some in Beijing find uncomfortable,” the person added.
They added that it is still likely that Shein will eventually get approval to sell shares abroad. The need for China’s signature suggests that, at least in Beijing’s eyes, Shein remains Chinese.
The company was founded in 2008 in the eastern city of Nanjing Xu, which also goes by the name of Sky Xu. The 40-year-old man was born in Zibo City, eastern Shandong Province. Around the end of 2021, Xu moved the company’s headquarters to Singapore and also moved his residency status to the city-state. It is unclear whether Xu continues to hold a Chinese passport.
Shein’s “Singapore laundering,” as the practice of Chinese groups relocating their headquarters has become known, also failed to appease lawmakers in the U.S., its biggest market. China hawk Marco Rubio sent a letter to the British government on Monday urging it to proceed with caution in allowing Shein’s London IPO, saying the group should be “correctly understood as a Chinese company”.
Two Chinese business columnists told the Financial Times that Shein pressured them not to write about Tang’s speech for fear it would cause “misinterpretation”. Shein employees told them that the speech upset some officials.
“If we expand this, there will be more public discussion about this issue,” one commenter said. “Shein doesn’t want that to happen.
“Why did Tang have to say that Shein is an American company?” asked a second columnist contacted by the company. “He could have said that Shein is a multinational company with relevant business functions in China and beyond.
Tang made the comment on stage, but the Milken Institute has now removed the video of Tang’s May 7 panel from both its website and its official Vimeo channel. Archived versions of Milken’s website show that the video was available until at least the end of May.
The Milken Institute did not respond to repeated requests for comment. Several Chinese online media sites have deleted posts that prominently aired Tang’s claim that Shein is an “American company,” a common occurrence in China when companies take issue with content written about them.
Asked by Milken Institute Asia Fellow Curtis Chin what kind of company Shein is, Tang said “identity” is a difficult question. He said Shein was born in China, with many employees and a significant part of its supply chain still there, so it could be considered Chinese, but its headquarters and incorporation also made it Singaporean.
Then Tang noted that his biggest market is the US and that American values have brought him success. “It’s about innovation, it’s about freedom to express individuality, it’s about fair play, fair competition, the rule of law, all of these things that we stand for are exactly what the ethos of the United States is,” he said.
“So if you look at it that way, we’re an American company.
Shein did not immediately respond to a request for comment.
Eleanor Olcott, Tina Hu and Nian Liu contributed reporting from Beijing