The German government has refused to provide guarantees to carmaker Volkswagen in relation to new investments in China, Der Spiegel reported on Friday.
The paper said Economy Ministry officials confirmed that they turned down four applications from a company over human rights concerns in Xinjiang but declined to name the company. Der Spiegel said the company is Volkswagen.
“The human rights situation in Xinjiang has become worse in recent years and involves forced labour and mass internment of Uyghurs,” the ministry said.
“The German government has therefore decided not to give guarantees for projects in China that are 1) in Xinjiang or 2) have business ties to entities operating there.”
Via a joint venture with China‘s SAIC Motor, Volkswagen has a plant in Urumqi, located in the Xinjiang region, where western countries and rights organisations say ethnic Uyghurs face torture and detention.
China has repeatedly denied any mistreatment of Uyghurs, describing alleged detention camps as vocational training facilities where people can “voluntarily” check themselves in to learn about law, Chinese language and vocational skills.
A Volkswagen spokesperson confirmed that the company had submitted applications for investment guarantees in China, adding it had not yet received an official decision from the ministry.
The Volkswagen spokesperson said the applications were not for direct investments in the group’s Xinjiang plant or anywhere near it, but that it could not be ruled out that a product made at a factory elsewhere in the country could end up in the region.
Germany, which is scrambling to free itself of dependence on Russian gas after being caught on the hop by Moscow’s invasion of Ukraine, is now reassessing its ties to China and will place greater weight on human rights, Economy Minister Robert Habeck said earlier this week.
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.
• Reuters with additional editing by Jim Pollard
ALSO on AF:
China Auto Sales Crash as Covid Curbs Take Toll on Tesla, VW
VW’s China Partners Bristle as Carmaker Lavishes Love on New Venture
Volkswagen Eyeing Supercharged China EV Sales Surge
