Volkswagen to discuss future of Xinjiang operations with Chinese JV partner

An article from the Financial Times cites research and comment from VOC’s Dr. Adrian ZenzSenior Fellow and Director in China Studies at the Victims of Communism Memorial Foundation, on recent findings connecting Volkswagen to Uyghur forced labor.

The article notes that, “Volkswagen has responded to fresh allegations of having benefited from forced labour in Xinjiang by announcing talks with its Chinese joint venture partner over ‘the future direction of business’ in the region.

The short statement came after German newspaper Handelsblatt published allegations that VW’s joint venture with the Beijing-owned carmaker SAIC used forced labour when building a test track for cars in the region in 2019.

In December, VW said a long-awaited audit into its factory in Xinjiang had cleared it from allegations of forced labour, despite the majority of staff at Löning, the Berlin-based firm that headed the audit, publicly distancing themselves from the results. The audit helped the carmaker to lose its ‘red flag’ ESG rating by index provider MSCI.

On Wednesday, VW said that ‘various scenarios [were] currently being intensively examined’ together with its joint venture partner SAIC, with which it conducts roughly half its business in China.

The company declined to say whether a complete withdrawal from the region, where Beijing has been accused of severely repressing the local Uyghur population and other ethnic minorities, was on the table. Company insiders have previously said cutting ties with the region would not be possible until current contracts expire in 2029 because of the risk of harming VW’s relationship with SAIC.

Citing a study by a prominent researcher on Xinjiang issues, Adrian Zenz, Handelsblatt on Wednesday reported that pictures of the track being built had shown Uyghur workers in military uniforms. This was a sign that the people had been part of forced labour programmes, it alleged.

It also referred to a report by the state-owned company that built the track, which noted that some workers had their irises scanned and the information sent to police in order to ‘strengthen ideological consciousness.’

VW told Handelsblatt that it had not encountered any evidence of human rights abuses during the building of the test track, but that it would review the new claims.

Read the full article from the Financial Times.