European governments must take responsibility for their companies in Xinjiang

Dozens of European companies have business ties to Xinjiang, where according to UN estimates Chinese authorities have detained more than a million Uighurs and other Muslim minorities. European governments need to take a more active interest in their companies’ operations in the region, says MERICS Visiting Policy Fellow Benjamin Haas.

Almost weekly there are new reports coming out of Xinjiang about the system of extrajudicial detention camps holding as many as 1.5 million Uighurs and other Muslim minorities. In the face of mounting evidence of widespread human rights abuses, European governments have remained fairly restrained in their response, issuing a joint letter to the UN human rights chief and occasional statements of condemnation.

While foreign diplomats rarely have unfettered access to the region, if they are allowed to visit at all, European companies have extensive connections throughout Xinjiang. Major multinationals have built relationships with local governments, staff on the ground, large infrastructure projects and some even sponsor charity work.

Many large European companies have business ties to Xinjiang

I looked at 150 large European companies - firms that appear on the EuroStoxx 50 index and the Global Fortune 500 - and found about half had some business ties to Xinjiang. But this sampling is far from complete, and in the course of my research I found more than a dozen other European firms with Xinjiang connections. Trade with Germany alone was nearly EUR 130 million in the first half of 2018, according to the most recent statistics available. Trade doubled last year between the region and Spain, the Czech Republic, Slovakia, Hungary and Bulgaria.

Most of the economic ties between Europe and Xinjiang are straightforward. Companies have shops in the region, sell cars, buy fruit or build plants. But there are several companies that warrant more scrutiny, mostly dealing with technology and the extensive surveillance state.

Siemens, the German industrial conglomerate, collaborates on advanced technologies in automation, digitization, and networking with China Electronic Technology Group, a company that has developed a policing app used in Xinjiang that Human Rights Watch says violates “internationally guaranteed rights to privacy”. 

UBS, the Swiss bank, is one of the top ten investors in Hikvision, a Chinese company that has built multiple government surveillance systems in Xinjiang.

There is little information on how products of tech joint ventures are being used

Spanish telecommunications company Telefonica has a joint venture with China Unicom that uses big data to track individuals based on a host of criteria such as gender and age. While the company says the data is anonymous, an internal presentation showed unique ID numbers associated with individuals, and all mobile phone numbers in China are tied to national ID cards. The software has already been deployed in the region, according to a separate public company presentation.

There is little public information about how the products of these joint ventures are being used. The European Union and national parliaments should take an active interest in how their companies operate abroad, especially in places like Xinjiang where rights abuses are rampant.

The European Union should also immediately ban the export of surveillance technologies to China. For years, China has courted foreign firms to bring investment and business to Xinjiang, part of its broader campaign to “develop the West”. Some companies have only opened businesses in the region after ultimatums from Chinese authorities, according to interviews with executives.

This shows European companies have the connections and sway to push for change. While many executives are deeply reluctant to take any action that could potentially harm their business, China is not eager for another economic fight amid the trade war raging with the US.

Executives need to scrutinize their companies’ operations in Xinjiang

Many companies are unaware that their supply chains at least in part rely on Xinjiang, as a recent report by the Wall Street Journal showed when it found suppliers for Adidas and H&M were using yarn produced by a Chinese company that uses labor from the camps. Clothing and food brands are particularly vulnerable, but companies in all sectors should not wait for others to present them with uncomfortable information. Executives need to scrutinize their companies’ Chinese operations to ensure products are made in ethical ways.

Other companies need to work to protect their minority employees, using their relationships with local officials to make plain the personnel are essential to their operations continuing to operate.

Indeed, the situation is not all gloom and doom. At least one large German industrial firm has warned local authorities in Xinjiang against sending their employees to the camps and has provided prayer rooms for Muslim workers. Bosch, a German engineering firm, helps the region’s desperately underfunded schools. One program requires teachers to be fluent in a local minority language - even as Beijing discourages the use of Uighur in favor of Mandarin.

While these steps are commendable, they do not go far enough. It is time for European companies and the governments that regulate them to stand up for European values. Statements of condemnation are no longer enough. 

The views expressed in this article represent the views of the author and not necessarily those of the Mercator Institute for China Studies.