Establishment in Xinjiang to stay
The VW chief has “concerns” about German politics in China
VW boss calls for more dialogue with China. A confrontation with the People’s Republic could jeopardize growth, prosperity and employment in Germany. Herbert Diess says VW’s withdrawal from the Xinjiang region, where China oppresses Uyghurs, would have no benefit.
VW chief Herbert Diess warns of a comparison course with China. He was “concerned” about the basic attitude of the German government towards the People’s Republic, Diess said in an interview with “Spiegel”. “We need more dialogue,” the VW chief asked. “The Chinese leadership can also handle difficult European positions – but it should be talked about – and you should understand the economic implications.”
According to the VW boss, if Germany broke away from the People’s Republic, there would be far less growth, prosperity and jobs. “In this country, the extent to which our prosperity is co-financed by China is extremely underestimated.” In an interview with “Spiegel”, Diess listed that Volkswagen employs 20,000 to 30,000 developers in Germany and half of them work for customers in China. “Four billion euros of profits flow here from the People’s Republic every year”. He tells his he executives that much of their bonuses are generated there. Inflation in Germany would also “explode further” without the agreements with China.
In the eyes of the VW boss, China “has opened up further economically under President Xi Jinping”. He assumes that the country “will continue to develop positively in the value system”. “We can contribute to change by being represented locally,” Diess said. Volkswagen has been investing for 20 to 40 years and a lot could change there.
“No forced labor” at VW in Xinjiang
Recently, new reports of the oppression of the Uyghur Muslim minority in China’s Xinjiang region have caused massive criticism around the world. These are human rights violations such as forced labor and housing in re-education camps. The United States recently imposed an import ban on products manufactured in Xinjiang, as reported by CNN, among others.
Asked about the criticisms of the VW plant in the region, Diess told “Spiegel” that the group is constantly thinking about it. “To this day I am of the opinion that we should stay there because the withdrawal is of no use to anyone,” said the head of VW. There is an exchange with the local joint venture partner several times a year, and the plant has protective rights and prayer rooms for religious minorities, who make up 30% of the workforce. “We can guarantee there is no forced labor there,” Diess said.
The Chinese market is extremely important for Volkswagen. Wolfsburg is the industry leader there. Despite the recent crown lockdowns and the economic slowdown in China, Diess is confident that the People’s Republic will remain the engine of growth.