Republican Congressman John Moolenaar, chairman of the US House Select Committee on China, has called on JPMorgan, Goldman Sachs, and Morgan Stanley to withdraw their support for Shein's planned initial public offering on the Hong Kong Stock Exchange, citing allegations that the Chinese-founded fast-fashion giant's supply chain is linked to forced labour. The demand, issued on 26 August, marks the latest congressional push against Wall Street's involvement with Chinese-affiliated companies.

What Moolenaar Alleged

In a formal statement, Moolenaar accused the three American banks of enabling what he described as a Chinese Communist Party (CCP)-backed scheme to draw foreign capital into China's economy. 'For major U.S. banks to bankroll Shein's IPO shows these institutions have no regard for human rights or the victims of forced labor who will be forced to pick cotton for Shein's clothes,' he said.

He went further, characterising the banks as instruments of the CCP. 'These American banks are being used as a tool by the CCP to bolster their declining economy and capital markets with outside money, enabling a CCP Ponzi scheme on the rest of the world,' Moolenaar said. He also called it 'unconscionable' for the banks' leadership to claim commitment to US national security while underwriting a company he described as tied to forced labour and genocide.

Shein's IPO History and Supply Chain Scrutiny

Shein, which grew into one of the world's largest online fashion retailers by offering a vast catalogue of low-cost, rapidly changing clothing lines, has previously failed to secure listings in both New York and London, reportedly due to concerns over forced labour in its supply chain. The company's possible exposure to cotton or other materials originating in China's Xinjiang region has drawn sustained scrutiny from American lawmakers.

The US government has formally accused China of committing genocide and crimes against humanity against Uyghurs and other predominantly Muslim minorities in Xinjiang. Beijing has denied allegations of widespread forced labour and human-rights abuses in the region.

What the Committee's Statement Did Not Say

Notably, the committee's statement did not specify the exact roles being performed by JPMorgan, Goldman Sachs, or Morgan Stanley in the proposed offering. It also did not disclose how much Shein intended to raise through the listing or provide a precise date for the transaction. No response from Shein or any of the three banks was included in the statement.

Critically, the allegations against Shein were made by Moolenaar and have not been presented as findings by any court or regulatory authority.

Broader Context

An IPO allows a privately held company to sell shares to public investors through a stock exchange. Investment banks typically assist by structuring the offering, preparing documentation, gauging investor demand, and distributing shares. Shein's repeated difficulties in securing a listing in Western markets reflect the deepening intersection of US-China geopolitical tensions and global capital markets — a trend that has intensified since Washington's passage of the Uyghur Forced Labor Prevention Act.

With the Hong Kong listing reportedly expected next month, the pressure on the three banks is likely to intensify as the transaction date approaches.