FILE PHOTO: A Volkswagen logo is seen during the launch of its ID.6 and ID.6 CROZZ SUVs at a world premiere ahead of the Shanghai Auto Show, in Shanghai, China April 18, 2021. REUTERS/Aly Song

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BERLIN, May 27 (Reuters) – Germany’s economy ministry has refused to provide automaker Volkswagen (VOWG_p.DE) with guarantees to cover new investments in China over concerns about human rights abuses in the Xinjiang region, Der Spiegel reported on Friday.

The ministry confirmed that it rejected four applications from a company on human rights grounds in Xinjiang, but declined to name the company. Der Spiegel said, without citing sources, that Volkswagen was the company in question.

“The human rights situation in Xinjiang has worsened in recent years and involves forced labor and mass internment of Uyghurs,” the ministry said.

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“The German government has therefore decided not to give guarantees for projects in China that are 1) in Xinjiang or 2) have commercial ties with entities operating there.”

Through a joint venture with China’s SAIC Motor (600104.SS), Volkswagen has a factory in Urumqi, located in the Xinjiang region, where Western countries and rights organizations say Uyghurs are at risk of torture and detention.

China has repeatedly denied any mistreatment of Uighurs, describing the alleged detention camps as vocational training centers where people can “voluntarily” register to learn law, Chinese language and job skills.

A Volkswagen spokesperson confirmed that the company had submitted applications for investment guarantees in China, adding that it had not yet received an official decision from the ministry.

The Volkswagen spokesman said the requests did not concern direct investment in the group’s factory in or near Xinjiang, but that it could not be ruled out that a product produced in a factory elsewhere in the country could meet in the area.

Germany, which is striving to break free from dependence on Russian gas after being caught off guard by Moscow’s invasion of Ukraine, is now reassessing its ties with China and will place greater emphasis on human rights. man, Economy Minister Robert Habeck said earlier this week. Read more

Volkswagen said it follows the UN Guiding Principles on Business and Human Rights and is part of the company’s code of conduct.

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Reporting by Thomas Escritt and Victoria Waldersee; Editing by Christoph Steitz, Kirsten Donovan

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