Germany Scratches Volkswagen’s China Investment Plan
- May 30, 2022
- Posted by: Quatro Strategies
- Category: Manufacturing
Germany’s Ministry of Economy rejected to provide guarantees to cover Volkswagen’s new investments in China over human rights violations in the Xinjiang region.
While the ministry did not reveal the name of the company, announcing it had turned down four applications from a company over human rights concerns in Xinjiang, the company in question is automotive giant Volkswagen.
The ministry said in its statement that human rights issues have become an increasing concern in Xinjiang in recent years and involves forced labor and internment of Uyghur people.
The statement added that the German government has decided no to give guarantees for projects in China that are in Xinjiang or have business ties to entities operating in the region.
Volkswagen already has a manufacturing plant via a joint venture with China’s SAIC Motor in Xinjiang, where western states and human rights groups say Uyghur people are tortured and put in detention.
China has been refusing accusations, describing the camps as vocational centers where people voluntarily attend to learn about law, Chinese language and vocational skills.
Volkswagen confirmed that it has submitted applications to the German government for investment guarantees in China, but said it had not received any decision yet.
The company added that the applications were not for direct investment in its Xinjiang plant. But it acknowledged that a product made at a factory elsewhere could end up in the region.
Germany’s Economy Minister Habeck said last week that the government has been reassessing its ties to China and will place greater emphasis on human rights.
Volkswagen said it follows the United Nations’ guiding principles on business and human rights and that it was an integral part of the company’s code of conduct.
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