Tesla criticised for opening showroom in China's Xinjiang region

Tesla announced the showroom's opening in Urumqi on its official Weibo account. PHOTO: REUTERS

SHANGHAI (REUTERS) - United States human rights and trade groups on Tuesday (Jan 4) blasted Tesla’s New Year’s Eve announcement that it opened a showroom in Xinjiang, the latest foreign company caught up in tensions related to the far-western Chinese region's human rights issues.

The Council on American-Islamic Relations, the largest US Muslim advocacy organisation, said Tesla was “supporting genocide”. Similar criticism came from a US trade group, the Alliance for American Manufacturing, and US senator Marco Rubio.

“Elon Musk must close Tesla’s Xinjiang showroom,” the Council on American-Islamic Relations said on its official Twitter account, referring to Tesla’s founder.

Xinjiang has become a significant point of conflict between Western governments and China in recent years. United Nations experts and rights groups estimate that more than a million people, mainly Uighurs and members of other Muslim minorities, have been detained in camps there.

US President Joe Biden and members of the US Congress have stepped up pressure on companies to distance themselves from Xinjiang. On Dec 23, Mr Biden signed a bill barring imports of goods made in the region.

White House spokesman Jen Psaki said she would not comment directly on Tesla’s action, but generally, the “private sector should oppose the PRC human rights abuses and genocide in Xinjiang", she said, using China's official name of People's Republic of China.

“The international community, including the public and private sectors, cannot look the other way when it comes to what is taking place in Xinjiang," she added.

Washington has labelled China’s treatment of ethnic Uighurs and other Muslims in Xinjiang as "genocide".

The US and a few other countries plan a diplomatic boycott of the Beijing Winter Olympics in February over the issue.

China has rejected accusations of forced labour or any other abuses there, saying that the camps provide vocational training and that companies should respect its policies.

Tesla, the world’s most valuable automaker, announced on Dec 31 that it was opening a showroom in Xinjiang’s regional capital, Urumqi. “On the last day of 2021 we meet in Xinjiang,” Tesla said in a post on its official Weibo account.

Other US and European vehicle makers or their Chinese partners have showrooms in Urumqi, a city of some 3 million people. German automaker Volkswagen, for instance, has a car factory near Urumqi.

Tesla did not immediately respond to a request for comment for this story. The carmaker operates a factory in Shanghai and is ramping up production there amid surging sales in China.

China has also become an export hub for Teslas headed to Europe and other markets.

Mr Musk last year had to smooth over relations with Chinese authorities after Teslas were banned from government properties because of concerns that data collected by the vehicles’ cameras was being transferred out of China.

A slew of foreign firms in recent months have been tripped up by tensions between the West and China over Xinjiang, as they try to balance Western pressure with China's importance as a market and supply base.

“There is this tension between global investors and the Chinese government. The global investors want market access. And the Chinese government says the cost of access is acquiescence,” said Mr Michael Dunne, chief executive of Zo Zo Go, an investment advisor that works with automotive and technology companies doing business in China.

In July, Swedish fashion retailer H&M reported a 23 per cent drop in local currency sales in China for its March-May quarter after it was hit by a consumer boycott in March for stating publicly that it did not source products from Xinjiang.

Last month, US chipmaker Intel faced similar calls after telling its suppliers not to source products or labour from Xinjiang, prompting it to apologise for "the trouble caused to our respected Chinese customers, partners and the public".

Although some have been trying to reduce their supply chain exposure to the region, especially as Washington bans imports such as Xinjiang cotton and blacklists Chinese companies that it says have aided Beijing’s policy there, many foreign brands operate stores there.

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