Volkswagen has bowed to years of pressure and agreed to sell its
  factory and assets in the Chinese province of Xinjiang, home to the
  country’s Uighur minority.

  The German car manufacturer confirmed that it and its local Chinese
  partner, Shanghai Auto, were pulling out.

  China has grown into VW’s biggest market in recent years, accounting
  for about half its sales. But the plant in Xinjiang had become more of
  a burden than a blessing: the company has had to fend off allegations
  about China’s treatment of Uighurs and, in particular, [1]claims that
  VW’s supply chain used forced Uighur labour.

  Volkswagen’s plant in Xinjiang has not produced any vehicles since 2019

  Volkswagen’s plant in Xinjiang has not produced any vehicles since 2019

  JOHANNES NEUDECKER/DPA/ALAMY

  A VW statement confirmed that the partnership was selling its factory
  in Urumqi, the provincial capital, and its test tracks, including one
  in the historic Xinjiang town of Turpan, but it insisted this was part
  of a “realignment” towards electric vehicles, which would involve
  bringing new models onto the market.

  “Due to economic reasons, the site has now been sold by the joint
  venture as part of the realignment,” the statement said.

  The plant has lain mostly idle since the coronavirus pandemic, and in
  any case the company’s market share in China is falling as a wave of
  cheap Chinese electric cars hits the streets.

  The decision was still welcomed by human rights activists. “Incredible
  news,” said Adrian Zenz, an academic and adviser to the
  Inter-Parliamentary Alliance on China who helped to uncover China’s
  network of “re-education camps” for Uighurs in Xinjiang. “A huge
  victory for the Uighur cause. This comes after our work exposed forced
  labour linked to the test track and the faulty factory audit.”

  VW said it was pulling out of the region for economic reasons

  VW said it was pulling out of the region for economic reasons

  REUTERS

  The audit Zenz mentioned may have been the last straw for VW. It was
  commissioned by the company last year under pressure from investors in
  the firm, which include a German state government, and was supposed to
  assess working conditions. It gave the company a clean bill of health,
  but reports in September alleged that the auditors had not been
  qualified for the work and the terms of the standards VW said it was
  applying had not in fact been met.

  One of the auditors was a Chinese law firm. Chinese authorities have
  been increasingly hostile to foreign auditing firms — specialist
  companies used by western investors in the country to perform “due
  diligence” in response to concerns over labour standards and human
  rights issues.

  The Uighurs are one of several Turkic Muslim groups living in
  territories in the far west of China that came under imperial rule in
  the 18th century. President Xi ordered a crackdown a decade ago after
  years of unrest that he blamed on “separatists” and “Islamist
  terrorists”. [2]Huge detention camps were built, in which hundreds of
  thousands — perhaps millions — of Uighurs have been interned while they
  are taught the virtues of conforming to Communist Party ideology.

  Activists and writers remain jailed, and Uighur prisoners have
  documented how they were used as forced labour in factories, including
  some supplying western markets.

  VW said the factory and test tracks were being sold to Shanghai Motor
  Vehicle Inspection Certification. Its parent company, Shanghai Lingang
  Development Group, is owned, like Shanghai Auto, by the city’s
  government.

  However, VW also said it was extending its partnership with Shanghai
  until 2040. The German car industry is under huge pressure from cheap
  competition but is resisting suggestions that the EU should impose
  protective tariffs on Chinese imports for fear of retaliation by
  Beijing.

  Likewise, VW always denied claims that it kept open the Xinjiang plant,
  which used to make its Santana model but has not produced any vehicles
  since 2019, under pressure from Beijing.

  “As is well known, Volkswagen AG has never owned the joint venture
  sites in Xinjiang,” VW added. “We do not comment on any speculation by
  third parties about the possible motives for the Chinese joint venture
  partner’s business decision.”

References

  1. https://www.thetimes.com/article/vw-under-pressure-to-quit-xinjiang-after-chemicals-giant-pulls-out-v558nnncp
  2. https://www.thetimes.com/article/nation-after-nation-condemns-chinas-persecution-of-uighurs-qmbgzd5tj