German auto giant Volkswagen has announced that it is selling all of its operations in the Chinese region of Xinjiang, a disputed area where authorities in Beijing are accused of serious human rights abuses and the use of forced labor.
The company will sell both the factory in the city of Urumqi and the test track in Turpan to a Chinese firm, Shanghai Motor Vehicle Inspection Center (SMVIC).
Officially, Volkswagen justifies the decision by “economic reasons”, as part of a strategic reorganization.
A difficult context for Volkswagen in China
The decision comes in a difficult context for Volkswagen in China. The company lost its market leader position to local manufacturer BYD, and sales in 2023 grew modestly, but more slowly than the previous year. International pressure on a presence in Xinjiang increased after another German giant, BASF, announced it was pulling out of the region.
The Xinjiang region is at the center of serious allegations. The UN presented in 2022 “credible” evidence of torture, forced medical treatment and violence in the region. More than a million Uyghurs and other Muslim minorities are said to have been incarcerated in detention centers. Several multinational companies are accused of indirectly using forced labor through their factories in the area.
Volkswagen attempted to respond to the allegations by ordering an external audit last year. While it found no evidence of forced labor among the factory’s 197 employees, the consultancy acknowledged it had encountered “challenges in data collection” in China.
The Chinese authorities reject all the accusations and say that their measures in Xinjiang are aimed at fighting extremism and helping the development of the region, according to AFP.
Source: www.descopera.ro
