Germany: For the first time, the government refuses to support investment in China

The German government has refused for the first time to support German companies investing in China because of the human rights situation in Xinjiang province, Finance Minister Robert Habeck said today, leaving open the possibility of imposing sanctions on local officials.

“A company operating in the Uighur province wanted the (state) investment insurance extended” and the request was “not approved”, the minister explained to Die Welt. “This is the first time that investment insurance has not been implemented for human rights reasons,” he added.

Without these guarantees, a company assumes the entire investment risk of financing a project abroad.

Neither Hubeck nor his ministry indicated which company the decision concerned. Citing unnamed sources, Der Spiegel writes that it is the Volkswagen car industry. The company opened a factory in 2013 in Urumqi, the capital of Xinjiang, where Chinese authorities are accused of suppressing the Muslim Uighur minority. Western investigators have accused Beijing of sending one million Uighurs and members of other Muslim minorities to “re-education camps” where they are “forced to work” or “forced to be sterilized”. The United States even spoke of “genocide.” China, for its part, says the studies are biased and speaks of “vocational training centers” aimed at eliminating extremist tendencies.

Volkswagen CEO Herbert Dees recently assured in an interview with the American television network CBS that “there is no forced labor” in the company’s factory. “We want to keep the factory open” because I think it ‘s better for the locals to stay there, “he said.

The Berlin decision does not affect Volkswagen’s investment plans in China, writes Der Spiegel, citing a source in the automotive industry.