Xinjiang’s forced labour: Volkswagen and Uniqlo's take a step back
New supply chain regulations adopted by the United States and the European Union are forcing many companies to take a stand on the issue of Uyghur exploitation. The German automaker sold its controversial Urumqi plant "for economic reasons", but it is still renewing its business plans in China. The Japanese clothing brand says that it does not use cotton from Xinjiang.
Milan (AsiaNews/Agencies) – After BASF, Volkswagen too has decided to leave Xinjiang, in the wake of accusations that Uyghurs have been used as forced labour in building a test track for cars. Yesterday’s announcement by the German carmaker officially cites "economic reasons" related to plans to reorganise its presence in China.
This marks an important victory for groups fighting for the rights of the Muslim minority, which has been subjected to harsh repressive government policies in Xinjiang, China’s westernmost province, for more than ten years.
For Volkswagen, China is a key market, currently selling four out of every 10 cars produced in its plants globally. But it now finds itself caught up in the clash between China and the European Union over tariffs on imports of electric cars, as well as with its own internal crisis.
In Xinjiang, the automaker was facing the Forced Labour Regulation adopted by the European Union on 19 November; although much less clear-cut than the Uyghur Forced Labor Prevention Act adopted by the United States in 2021, it would still have put the Urumqi plant in difficulty.
In addition, as AsiaNews reported a few weeks ago, the study commissioned by Volkswagen that exonerated its Chinese subsidiary from forced labour charges turned out to be deeply flawed, since it was impossible to investigate freely in the region.
In the end, Volkswagen decided to sell the plant that it opened in Xinjiang in 2012 at Beijing's request, and the related track; both will go to Shanghai-based SMVIC, a company that deals with tests on cars produced in China.
In the meantime, the German car manufacturer has extended until 2040 a joint venture with Saic Motor, its Chinese partner. The agreement provides for 18 new Volkswagen and Audi car models to arrive on the market by the end of the decade, 15 exclusive to the local market.
The goal is to recover positions by returning to sell four million cars a year in China by 2030, a market share of 15 per cent. Far from Xinjiang, but certainly inside the People's Republic.
The sale of the German automaker's plant does not, however, end the broader question of Uyghur slave labour in products that flood markets around the world.
According to the Coalition to End Forced Labour in the Uyghur Region, the apparel and footwear industry is one sector heavily dependent on unfree labour since Xinjiang accounts for about 23 per cent of the world's cotton production, but is also involved in making solar panel components and growing tomatoes.
Meanwhile, Uniqlo, a Japanese casual wear designer and retailer, announced for the first time that it does not use cotton from the Uyghur region in its products.
This step is clearly dictated by new regulations, which are forcing many groups present on international markets to address any ambiguity concerning their workers; this is especially the case with existing US legislation, which requires companies to prove that their supply chains are not linked to Uyghur forced labour.
A few days ago, the Biden administration added another 29 groups to its Entity List, which covers companies whose imports are not allowed into the United States under the Uyghur Forced Labor Prevention Act.
Overall, more than 100 companies have already been excluded from the US market suspected of using Uyghur forced labour, in sectors ranging from agriculture and mining to steel and digital technologies.
Uniqlo's statement is significant because its founder and president Tadashi Yanai had always refused to speak on the matter, until now that it, claiming that he wanted to remain "neutral" in the trade war between the United States and China.
The Japanese’s company strong presence in the Chinese market weighs heavily on what might happen, especially since it has more stores in China than in Japan itself. This has raised fears that that its stance on the Xinjiang issue might have negative repercussions, sparking, for example, nationalist boycotts, like with other major brands in the sector.
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