Shein faces regulatory hurdles ahead of IPO amid US-China scrutiny

Shein faces regulatory hurdles ahead of IPO amid US-China scrutiny

Shein faces regulatory hurdles ahead of IPO amid US-China scrutiny By

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EditorAhmed Abdulazez AbdulkadirPolitics

Published Jan 12, 2024 03:36PM ET

SINGAPORE – Shein, the fast-fashion behemoth valued at $66 billion, is currently navigating through a complex regulatory landscape as it prepares for its initial public offering (IPO). The company, known for its affordable and trendy clothing, is under the microscope of both U.S. and Chinese authorities, with particular attention being paid to its supply chain practices.

In the United States, Shein has been the subject of supply chain scrutiny over claims that it sources cotton from Xinjiang, a region mired in controversy over labor rights. The company has firmly denied these allegations, asserting its commitment to adhering to labor laws and regulations.

The regulatory challenges for Shein are further compounded by new requirements from Beijing, which now demands that companies obtain formal approval before pursuing foreign IPOs. This change comes in the wake of the Didi Global incident, which has prompted Chinese regulators to tighten control over domestic companies seeking to list abroad. Shein, with its significant production ties to China, finds itself in a delicate position as it seeks to comply with these regulations.

In response to these challenges, Shein has intensified its compliance and lobbying efforts. The company aims to align with international standards and navigate the geopolitical tensions that are influencing its IPO prospects. As the fast-fashion leader awaits the SEC’s decision on its confidential IPO filing, the path forward will require careful maneuvering through the evolving regulatory demands of both the U.S. and China.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Shein faces regulatory hurdles ahead of IPO amid US-China scrutiny

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