H&M. Photo: VCG

Sweden-based clothing giant H&M is reportedly phasing out its relationship with Chinese yarn producer Huafu Fashion after US customs on Monday said it would bar a raft of Chinese products including cotton, garments and hair products from Northwest China's Xinjiang Uygur Autonomous Region.

Some Chinese netizens suggested that H&M should follow its logic and close all of its shops in China.

H&M said that it has an "indirect business relationship with one mill" in Shangyu in East China's Zhejiang Province, belonging to Huafu Fashion.

The Chinese mainland market is the Swedish brand's third-largest regional market globally, contributing 2.26 billion Swedish krona ($256 million) during the second quarter, down 28 percent year-on-year due to the COVID-19 pandemic.

As of May 31, H&M had 516 outlets in the Chinese mainland.

On China's Weibo, a twitter-like service, some netizens suggested that H&M should be more "strong" toward China and close all of its shops in China, and they expressed their dislike of the brand's products even before the announcement, which annoyed them.  

According to Huafu's financial report for the first half of the year, its export business, including yarn and other products, accounted for about 20 percent of total revenue. 

Huafu's Zhejiang unit reported 754.6 million yuan ($111.4 million) in revenue during the period.

China on Tuesday slammed the US customs move as "bullying" and dismissed accusations of forced labor as "a complete fabrication."