<h4>Key Takeaways:</h4>



<ul>
<li>Shein's unlikely acquisition of the ethically focused Everlane brand appears to be a cheap image rehabilitation strategy ahead of a potential Hong Kong IPO</li>



<li>Canadian Solar is expanding its high-tech cell manufacturing in the U.S. to bypass tariffs, but could face pushback from Beijing</li>
</ul>



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image credit: Bamboo Works



We're currently seeing two major companies with deep Chinese roots use very different strategies to bypass Western skepticism and trade frictions. Embattled fast fashion giant Shein is attempting to buy its way to ethical credibility by acquiring U.S.-based Everlane, while Canadian Solar (NASDAQ:CSIQ) is moving its high-tech manufacturing to American soil to shed its Chinese identity. While these two industries may be unrelated, there's a clear underlying connection — both companies are urgently trying to blend into Western markets to outrun geopolitical resistance. 



BusinessFormation



Shein recently made global headlines with its unlikely purchase of Everlane. For those unfamiliar, Everlane rose to prominence on a strict commitment to transparency and sustainability, making it highly successful with millennial professionals. The brand reportedly fell on hard times financially, which likely drove it into the arms of such an unlikely suitor. While no official price tag was given, one media outlet that broke the news put it at around $100 million.



This is peanuts for Shein — especially considering Everlane was previously valued at around $600 million. But it stands out as the biggest acquisition Shein has done to date. It's an unusual move given Shein's notorious reputation for lack of transparency and reliance on questionable business practices, including accusations of using sweatshop labor. We don't think Everlane would ever get caught doing something like that.



We believe the driving force behind this deal is pure image rehab. When you've been vilified for your practices, buying a company known for ethical behavior is a calculated shortcut. Shein will probably squeeze the Everlane line by dramatically lowering the cost of goods without compromising quality to boost competitiveness, and they're undoubtedly going to try and extract some PR value out of it.



However, we don't think this deal is enough to fix their biggest headache: a perpetually delayed IPO. Shein was essentially ostracized from listing in the U.S. and London due to intense political resistance and ESG concerns. They've reportedly made a confidential filing to list in Hong Kong, but that process has stalled for over a year. There's a lot of ESG-focused Western capital circulating in Hong Kong that will demand assurances of significantly changed practices. While adding Everlane's top management to Shein's board could theoretically help turn around its image, integrating Westerners into the board of a Chinese company is notoriously difficult. 



BusinessFormation



Meanwhile, inside Everlane, the mood is likely grim. If you're a young American who joined the company for its ethical mission, only to be acquired by the poster child for fast fashion excess, you're probably furious. Given the current U.S. labor market — where people legitimately fear for their jobs due to AI — some employees will inevitably swallow hard and stay until they find something better. But many will likely leave because the new ownership fundamentally conflicts with their beliefs.



<h4>Moving production offshore: Canadian Solar's American pivot</h4>



While Shein tries to buy an American identity, Canadian Solar is trying to build one. Despite being technically founded and based in Canada, the company is widely considered Chinese because its founder is from China and its original manufacturing base was located there. Now, the company has revealed major expansion plans at its two U.S. facilities, one of those a new factory producing high-tech solar cells.



This strategy aims to dodge U.S. tariffs and position the company as a non-Chinese alternative to the dominant market players. But is it going to be a case of once Chinese, always Chinese? We think the label matters deeply. Even if governments come and go, local U.S. manufacturers fiercely defend their turf. They're going to loudly argue that this expansion is just a Chinese operation in disguise.



There's also the question of export controls. On its latest earnings call, Canadian Solar claimed it hasn't faced any official resistance from Beijing regarding the export of cutting-edge manufacturing equipment to the U.S. But we think it's only a matter of time before that changes. China is hyper-focused on retaining control of its advanced technology. We've seen it telling EV makers not to manufacture core technology abroad, and there are some cases where offshore tech transfers initially went unnoticed before facing strict clampdowns — just look at Meta (META.US) acquiring Manus. Given how highly sophisticated and automated the solar supply chain has become, the Chinese government would likely prefer to keep those processes strictly in Chinese hands.



Furthermore, producing solar panels or even cells in the U.S. is just the end of a long, complex chain. Earlier steps — producing high-purity polysilicon, turning it into ingots, and then into wafers — are vastly dominated by China, which controls about 80% of global solar manufacturing. Even major companies like JinkoSolar (JKS.US), Trina Solar, and JA Solar face the same reality. 



BusinessFormation



While alternative suppliers are emerging — such as United Solar in Oman, which produces clean, highly traceable polysilicon — they only cover a fraction of the necessary volume. Even if wealthy Middle Eastern nations try to beat China at its own game with abundant capital and sand, they'll still have to rely heavily on Chinese technology and equipment.



Ultimately, both Shein and Canadian Solar are throwing capital at their geopolitical problems. But rewriting your corporate DNA takes more than a cheap acquisition or a new assembly line — and Western markets are watching closely.



*China Inc by Bamboo Works discusses the latest developments on Chinese companies listed in Hong Kong and the United States to drive informed decision-making for  investors and others interested in this dynamic group of companies.



Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.

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CSIQ

Shein acquired Everlane for ~$100M to rehabilitate its image ahead of a potential Hong Kong IPO, while Canadian Solar is expanding U.S. manufacturing to bypass tariffs and shed its Chinese identity. Both companies are employing distinct strategies to navigate Western skepticism and geopolitical friction.

Shifting Identities: Shein's acquisition And Canadian Solar's Return To North America