Fast Fashion as Strategic Threat: Report

A new report warns that Chinese state-supported e-commerce giants pose a strategic threat to American technological leadership, economic competitiveness, and consumer protection, and that it is by design.

Writtten by Eli Clements at the Center for Data Innovation, the report—How China’s State-Backed E-Commerce Platforms Threaten American Consumers and U.S. Technology Leadership—details how Chinese platforms such as Temu, SHEIN, and AliExpress are gaining global market share through extensive government support, including subsidies, regulatory advantages, and access to state-run logistics and data systems.

“China’s aspirations are clear: Use economic levers to make e-commerce into a strategic asset to grow China’s global influence, financial footprint, and ability to compete in AI,” Clemens writes. He warns that without decisive policy action, “U.S. companies [will be] left at a structural disadvantage and U.S. consumers [exposed] to unnecessary safety and security hazards.”

The report highlights a range of consumer protection concerns, including counterfeit goods, lax enforcement of product safety standards, and weak oversight of labor practices. According to the study, Temu and SHEIN exploit loopholes in the U.S. de minimis rule to flood the American market with low-cost goods, bypassing customs duties and inspections.

Clemens also raises alarm over data security. “Chinese platforms’ apps collect extensive user data, exploit device vulnerabilities, and potentially expose sensitive information to the government,” the report states, referencing known surveillance risks and Chinese laws that facilitate state access to corporate-held data.

The report contends that these platforms benefit from “artificial cost advantages,” including subsidized warehousing, streamlined export policies, and preferential treatment through industrial parks and pilot zones. Clemens notes that “pilot-zone policies… reduce operational costs for platforms in foreign markets” and fund brand expansion and legal protections abroad.

In addition to identifying risks, the report offers a set of policy recommendations. These include closing customs loopholes, strengthening supply chain audits, enforcing reciprocal market access, and investing in next-generation U.S. logistics infrastructure. “The United States has the chance to set the terms of this competition,” Clemens concludes, “but time is running out.”

The full report is available on the website of the ITIF.