--- title: "Starbucks sold control of its China business, and the new owner went to Xinjiang" description: "Boyu Capital’s venture opened two Urumqi stores; a House committee wants them shut, and Beijing calls the criticism a lie" author: "Nate Ledger" published: 2026-10-05T23:41:11Z modified: 2026-10-06T02:20:21Z url: https://rews.cc/a/starbucks-sold-control-of-its-china-business-and-the-new-own-1304f6 language: en tags: ["starbucks", "xinjiang", "boyu-capital", "geopolitics", "forced-labor", "asia", "business"] publisher: "Rews (https://rews.cc)" --- # Starbucks sold control of its China business, and the new owner went to Xinjiang *Boyu Capital’s venture opened two Urumqi stores; a House committee wants them shut, and Beijing calls the criticism a lie* By Nate Ledger · October 5, 2026 · https://rews.cc/a/starbucks-sold-control-of-its-china-business-and-the-new-own-1304f6 ## In brief - Starbucks sold 60% of its China business to Boyu Capital in a deal that closed in April, keeping 40% and licensing the brand - The joint venture opened two stores in Urumqi, Xinjiang, as it aims to grow from about 8,000 stores to as many as 20,000 - House China committee chair John Moolenaar called the move “morally bankrupt” and demanded the stores close - China’s Foreign Ministry called US genocide claims “a blatant lie”; Starbucks China said it will keep investing in the region - Eurasia Group’s Dan Wang said a retreat under US pressure would send a negative signal to American firms in China Last November Starbucks agreed to sell 60% of its China business to Boyu Capital, a Hong Kong private-equity firm, at an enterprise value of about $4 billion. The deal \[closed in April\](\). Starbucks kept 40%, and it kept the brand: it still owns the Starbucks name and intellectual property and licenses them to the joint venture. The venture now runs the roughly 8,000 stores Starbucks used to run itself in its second-largest market, and it wants to get to as many as 20,000. In late September the venture opened two stores in Urumqi, the capital of Xinjiang, \[reportedly\](\) one at the city’s grand bazaar and one at its airport. Xinjiang is where Western governments accuse Beijing of widespread human-rights abuses against Uyghurs, and where the US restricts imports over forced-labour concerns under the Uyghur Forced Labor Prevention Act, signed in December 2021. CNBC’s Anniek Bao described Xinjiang as a bold, if controversial, first stop on the road to 20,000. The House Select Committee on China responded with a statement under the headline \[“Starbucks Serves Up Venti-Sized Genocide.”\](\) Its chairman, Rep. John Moolenaar, a Michigan Republican, called it a “shocking and morally bankrupt decision by a company that prides itself on social responsibility,” said that “every cup sold in these stores ties an iconic American brand to the CCP’s brutal campaign against the Uyghurs,” and told Starbucks to “immediately reverse course and close its stores in Xinjiang.” China’s Foreign Ministry called US genocide claims “a blatant lie” and described Xinjiang as a place of “social stability, economic prosperity, ethnic unity and religious harmony.” Beijing has long said its security crackdown there counters terrorism and religious extremism, and it denies allegations of crimes against humanity and ongoing repression. Starbucks China’s chief executive, Molly Liu, said in a statement that the company would keep investing in the region. ## What you sell when you sell control Here is the structural oddity. When you own 100% of a business, every store location is your decision. When you own 40% and license the logo to the majority owner, the store locations are someone else’s decision, but they still have your logo on them. Before April, opening in Urumqi would have been a call made by Starbucks. Now it is, at least in the first instance, a call made by Boyu, which was co-founded by Alvin Jiang, a grandson of the late President Jiang Zemin, and which has long been seen as close to China’s political elite. Moolenaar’s statement, naturally, is addressed to Starbucks, because Starbucks is the name on the cup. How much a 40% holder and brand licensor can actually say about where its licensee puts stores is a question for a contract whose details have not been part of the public argument. Did Boyu know what it was doing? Ivy Yang, founder of Wavelet Strategy, thinks obviously yes. “Boyu understands the sensitivity of Xinjiang as well as anyone,” she told CNBC. Her reading is that the firm weighed Washington’s reaction and decided the domestic commercial opportunity was worth more. Starbucks has been losing ground to local rivals on price and speed, she said, and a new owner under pressure to deliver growth tends to go where the stores aren’t yet. That is the private-equity logic, and it is not crazy. Going from 8,000 stores to 20,000 means finding 12,000 new locations. Two of them are in Urumqi. You do not get to 12,000 by staying in Shanghai. But Xinjiang is an odd place to look for coffee customers on purely commercial grounds. Rural per capita disposable income there only just passed 20,000 yuan ($2,983) for the first time last year, against 24,456 yuan for rural residents nationally, so Xinjiang’s rural residents earn roughly 82% of the national rural figure. (For a very loose comparison, CNBC notes that the US non-metropolitan median household income was $60,459 in 2023, though that is per household, not per person.) Which is why some people think the commercial explanation is incomplete. “Chinese authorities have a strong interest in attracting prominent global brands to Xinjiang to demonstrate the region’s stability,” said Dan Wang, China director at Eurasia Group. Yaling Jiang, founder of ApertureChina, said that supporting Xinjiang economically became a state goal after the controversy over Xinjiang cotton, and that state television and social media have since made the region a consumer aspiration. If you are a politically connected Chinese investor running a famous American brand, the value of a Xinjiang store may not show up entirely in the store’s sales. ## Other people’s coffee Starbucks is not first. Pizza Hut, KFC, McDonald’s, Tesla and Burger King are among more than a dozen American brands already in Xinjiang, and according to GeoHey Brand Insights, a geospatial-data firm, the expansion has sped up since 2023, the law notwithstanding. Few drew this much fire from lawmakers, though Tesla’s Urumqi showroom in 2022 drew \[calls from the Council on American-Islamic Relations\](\) to close it. Meng Shen, director of Beijing boutique investment bank Chanson & Co., put the deal-making lesson neatly: “Worsening geopolitics is inevitable, and must be priced into any exit negotiation.” Translated: when a multinational sells control to a Chinese partner, part of what it is selling is the partner’s freedom to do things the multinational would not have done itself. That freedom presumably has a price, and you would hope it was somewhere in the $4 billion. The trouble is that the price gets paid once and the consequences keep arriving. Wang described the Urumqi stores as a test of the climate for American business in China as US-China relations steady this year. If Starbucks ultimately halts the project under US pressure, she said, it would tell American companies in China that their commercial commitments can be overridden by Washington, which would make US brands warier of Chinese partners and future deals harder to negotiate. So Starbucks is being blamed in Washington for a decision taken by its majority partner, and would presumably be blamed in Beijing for undoing it. It sold 60% of the business and kept 100% of the name. The name, it turns out, is the part people yell at.