Walt Disney Co. Terminates its Business Relations with Chinese Companies Due to Labor Violations

Labor abuse damages business ties of the US mass media behemoth with China and its toymakers, acting as a precursor for the already intensifying political imparity between the two countries.

Subcontracting manufacturing and other business operations to companies beyond the country’s regulatory jurisdictions has always been a dicey decision for US corporations. The politically-inflicted US-China business ties have stirred up controversies in the past and things are quite the same even at the moment. The impact of abrupt cessation of such ties is evidently ruinous for companies from respective countries. But, continuing with unlawful business practices is not practical either. A similar incidence has been recently reportedly, startling media and business news agencies in China and the US.

Walt Disney Co. has reportedly ended its businesses with a Chinese toymaker, and also, has filled labor violations against another company from the Asian country. Pissing off one of the largest entertainment company is less likely to go unnoticed as Walt Disney has posted a memo on its website, declaring that China’s Dongguan Qing Xi Juantiway Plastic Factory will no longer manufacture products that depict the company’s trademarked characters. While the announcement was made in Los Angeles, Disney was initially alerted by New York-based non-profits organization called China Labor Watch, which notified the media multinational company of labor violations in its Chinese factories.

Investigations of China Labor Watch disclosed the shortcomings of Dongguan Qing Xi Juantiway Plastic Factory in China as it failed to reconcile human resources problems despite Disney urging it to do so. The red flag from this organization compelled Disney to terminate its relationship with the factory and abruptly ending its product manufacturing from China. With it, the Burbank-based mass media entertainment company has warned Lam Sun Toy Limited Co., a toymaker based in China, to rectify similar discrepancies before it’s too late. Lam Sun Toy has been offered a chance to repair issues such as inaccurate maintenance of records, inadequate healthy and fire safety measures, and malpractices in human resources operations.

For now, Disney’s relations with this Chinese toymaker are hanging by a thread, anticipating the latter to conform the former’s expectations. However, uncertainty over the undulating US–China political intrusions leaves the fate of these relations ambiguous. Furthermore, regulations on US-China businesses are likely to get stricter under the watch of President-elect Donald Trump in the months to come.

About Siddhesh Asalekar 26 Articles
Siddhesh Asalekar is an independent columnist and writer, covering latest news and market updates on a variety of industrial verticals. With over three years of experience in reporting cutting-edge stories & events, Siddhesh continues to quench his undying thirst of being a competent expert. The budding writer devotes his downtime indulging into Netflix shows and gaming.