Beijing: Volkswagen is reviewing the future of its joint venture in northwestern China’s Xinjiang region and another German industrial giant is starting to sell its stake there following a new international investigation into forced labor by predominantly Muslim ethnic groups…
Volkswagen said last week it was in discussions with state-owned Shanghai Automotive Industry Corp, one of its main joint venture partners in China, in the wake of allegations of human rights abuses at its joint venture in Xinjiang.
The companies are examining “the future direction of the JV’s business activities in Xinjiang,” VW said, adding that “various scenarios are currently being investigated in depth.”
Germany’s BASF, the world’s largest chemical company, revealed on Feb. 9 that it had begun taking steps late last year to sell its stakes in two manufacturing joint ventures in Xinjiang.
BASF said that although its audit did not find human rights violations in any of the operations, “the recently published report related to the joint venture partner contains serious allegations that indicate activities inconsistent with BASF’s values.”
The Chinese government has strongly opposed any moves by multinational corporations to distance themselves from commercial activity in Xinjiang, the sparsely populated region. In a written response to a question about Volkswagen and BASF, the Foreign Ministry on Sunday dismissed allegations of forced labor in Xinjiang as false. The lie of the century fabricated by anti-China forces to defame China and cut off China’s economy from foreign markets. “We hope that relevant enterprises will respect the facts and cherish the opportunity for investment and development in Xinjiang,” the ministry said. VW and BASF, which have had extensive investments and sales in China for decades, are among the companies increasingly caught in the middle. Beijing on one side and Western governments, shareholders and human rights groups on the other.