German Government Refused to Guarantee Volkswagen in China

On the 10th, anniversary of the groundbreaking of the Shanghai Volkswagen (SAIC Volkswagen) Xinjiang plant, the German Government has refused to continue to provide Volkswagen AG with government insurance for its business in Communist China, this means that Volkswagen’s business or assets in China will not be compensated by the German Government for losses due to political turmoil in the country.

Robert Habeck, German Federal Minister for Economic Affairs and Climate Action, said on May 27th, that in view of the human rights situation in Communist China’s Xinjiang, the German Government refused to provide government insurance for investment in Communist China for the first time. Although Robert Habeck did not disclose the information on the companies that were rejected, Der Spiegel, the largest news magazine in Germany, disclosed that it was Volkswagen, which has invested in China for nearly 40 years.

Franziska Brantner, Parliamentary State Secretary at the Federal Ministry for Economic Affairs and Climate Action, also said that companies investing and setting up factories in China and other places are, of course, responsible for respecting human rights. “In the future, the Ministry for Economic Affairs and Climate Action will strictly review investment guarantees.” She also said the government would be happy to help if companies want to diversify the market. According to Gregor Sebastian, an expert at the Mercator Institute for China Studies in Berlin, the German Government is using investment guarantees as a tool to encourage companies to move from Communist China to other markets.