A local Chinese regulator and state media highlighted this week a roughly $50,000 fine Walmart Inc. WMT -0.28% paid last year, keeping a spotlight on the U.S. retailer at a time of rising political tensions between Beijing and Washington.
In recent weeks, Chinese authorities and media have criticized Walmart or touted past infractions. In late December, Walmart was warned by China’s anticorruption watchdog after local reports that it wasn’t selling products from Xinjiang. A few days later, a media outlet backed by China’s market regulator highlighted an administrative action from 2021 for cybersecurity infractions that didn’t result in a fine.
In China large corporations are frequently charged small fines for infractions, but those fines aren’t often highlighted publicly by regulators.
The Biden administration in December signed a law barring most U.S. imports from the Chinese region of Xinjiang, where the Chinese government has conducted a campaign of forcible assimilation against religious minorities. The U.S. also announced a diplomatic boycott of the Olympic Games in Beijing next month.
Walmart hasn’t discussed the various actions by Chinese authorities and a spokesman declined to comment Friday. The company has operated in China for decades, importing Chinese-made goods into the U.S. and running more than 400 stores in the country.
This week, Walmart was among a dozen cases that regulators in the southern province of Guangdong introduced in a lecture this week on China’s “anti-unfair competition law,” promoting their law-enforcement work.
The Guangdong Administration for Market Regulation said Wednesday that it had fined Walmart 300,000 yuan, equivalent to $47,200, after it determined its Sam’s Club app automatically assigned products five-star reviews when users had yet to rate the products themselves. It didn’t specify when Walmart was fined.
The practice, which took place from October 2020 to May 2021, amounted to misleading consumers and making false product promotion, the regulator said on its website. The fine was issued in July 2021 and paid by Walmart the following month, said a person familiar with the situation.
Meanwhile on Thursday, a spokesman for Xinjiang region’s government sent a warning message to foreign companies.
“We advise these companies not to underestimate the patriotic enthusiasm of Chinese consumers, not to underestimate the ability of Chinese consumers to safeguard their legitimate rights and interests in accordance with the law, and not to underestimate the possible consequences of sneaky political manipulation,” Xu Guixiang, a spokesman, said in a news conference.
Walmart in recent weeks faced a backlash on Chinese social media after some internet users shared comments that purported to show that the company had stopped stocking products in its Chinese stores from Xinjiang.
Xinjiang has become a source of geopolitical tension. Researchers say authorities in the western region have detained as many as a million members of ethnic minorities in a network of internment camps as part of the government’s ethnic assimilation campaign, which they say also includes mass surveillance, forced labor and stringent birth controls. The U.S. government, along with some lawmakers from other Western countries, have said those policies amount to a form of genocide.
Beijing has dismissed the genocide charge as a fabrication, describing its campaign in Xinjiang as an innovative effort to counter religious extremism and terrorism.
China is Walmart’s second-largest international market by retail square footage after Mexico, while the company is most dependent on its U.S. business for revenue and profit. International sales overall account for around 22% of Walmart’s $559 billion in global revenue. Walmart doesn’t disclose revenue by country.
In 2016, Walmart sold its core Yihaodian e-commerce site to JD.com Inc. Walmart recently has been focusing on expanding the popular Sam’s Club business, as well as building up e-commerce services for the membership warehouse chain.
—Sarah Nassauer, Liza Lin and Yoko Kubota contributed to this article.
Write to Clarence Leong at [email protected]
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