The German government will stop all investment guarantee schemes for companies looking to invest in the Xinjiang region of China due to the deteriorating human rights situation, the Economy Ministry announced Friday.
The development comes amid reports that Volkswagen — Germany’s leading carmaker — had failed to secure backing for extra investment in Xinjiang, where it’s already operating despite criticism from human rights groups.
“The German government has decided to no longer provide investment guarantees for projects in the People’s Republic of China that … operate in the Xinjiang Autonomous Region or … maintain business relations with entities operating there,” said a spokesperson for the ministry.
The ministry said the decision also includes the extension of existing guarantees and that it had therefore rejected four applications for continued support.
Der Spiegel reported on Friday that the move meant requests for support from Volkswagen, which runs a plant employing 600 in the region, would be rejected.
“We have not yet received a response to our requests from the German government,” said a spokesperson for Volkswagen, adding that it was possible a rejection could be coming.
German companies such as Adidas, Puma, BMW, Bosch, Siemens and BASF also have links to the Xinjiang region, according to earlier research by the Bundestag.
The Greens — which control the Economy Ministry under party co-leader Robert Habeck — have taken a robust stance on human rights abuses in China.
The ministry’s decision was made days after several media organizations, including the BBC, reported leaked documents from the Xinjiang police revealing striking images of people believed to be Uyghur inmates locked up by the Chinese government.
It also comes as the U.N. human rights commissioner, Michelle Bachelet, is visiting China, including a trip to Xinjiang.
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