Tesla is ‘giving cover to the Chinese government’ by doing business in Xinjiang: Oregon Senator

Democratic Senator Jeff Merkley (D, OR) blasted Tesla’s (TSLA) decision to open a showroom in China’s controversial Xinjiang region, adding to growing criticism of the Austin-based company’s actions.

Speaking to Yahoo Finance Live, Merkley said Tesla’s action “gives cover to the Chinese government” and its campaign against Muslim Uyghur minorities.

“When a company decides to place its enterprise in the middle of this setting of genocide and slavery it is really doing something very unethical. It is basically saying these things don’t matter,” Merkley said. “I think companies should steer very clear of having enterprises [in Xinjiang] even if they are not producing stuff.”

As chair of the Congressional Executive Commission on China, Merkley has long been a vocal critic of the Chinese Communist Party. He co-sponsored the Uyghur Forced Labor Prevention Act in the Senate, banning U.S. imports from the region, unless companies can prove forced labor was not used to make them. Tesla opened its showroom in Xinjiang, just days after President Biden signed the bill into law.

‘Slavery of some million individuals’

Human Rights Watch has estimated that China has detained more than 1 million Uyghurs in a forced assimilation campaign aimed at cultural and ethnic cleansing. The Trump and Biden administrations have both strongly condemned Beijing’s actions, saying it amounts to “genocide and crimes against humanity.

“It is not just an accusation by this administration. It is the result of a thorough effort by the State Department under the Trump administration, followed by a thorough review by this administration,” Merkley said. “We’re talking about cultural genocide, but we’re also talking about strategies to prevent the reproduction that is to prevent them from having children, separation of children from families for sterilizations. And we’re talking about slavery, slavery of some million individuals.”

Ethnic Uyghur men take part in a protest against China, in front of the Caglayan Courthouse, in Istanbul, Turkey, January 4, 2022. REUTERS/Dilara Senkaya

China has denied those accusations, dismissing them as lies “concocted by anti-China forces.

That has placed multinational companies operating in the region, in the political crosshairs. Last month, Intel (INTC) issued an apology on Chinese social networks after it sent local suppliers a letter saying it would no longer use labor and parts from Xinjiang to comply with the new import ban. Last week, Walmart (WMT) faced backlash after users on Weibo accused the company of removing Xinjiang products from the online shopping app for Sam’s Club. A company representative later denied those allegations, saying customers simply couldn’t find the products “because of a misunderstanding” of the app’s search function.

Marriott International (MAR), which counts China as its second largest market and operates a hotel in Urumqi under its brand Ramada International Hotels and Resorts, faced uproar when the firm’s Marriott location in Prague refused to host a Uyghur conference in November, citing the need for “political neutrality.”

Marriott International President Stephanie Linnartz told Yahoo Finance, the hotel chain needed to toe a delicate line between operating under individual country rules, while “staying true to our values.”

“I wish there was one simple answer to your question, but in my view, and in our company’s view, we need to navigate both simultaneously,” Linnartz said. 

China ‘doesn’t get a free pass’

China’s human rights record is expected to be in focus, ahead of the Beijing Winter Olympic games next month, where the U.S., Canada, Australia, Great Britain, and Japan have all announced a diplomatic boycott.

“The International Olympic Committee chose to keep the Olympics in China in Beijing, even as China engaged in — one, accelerating the intensity of their devastation of the Uighur population, and stripped outright the political rights of the citizens of Hong Kong, violating the agreement that China had made with Hong Kong,” Merkley said. “It puts the athletes in the position of essentially helping put the glitz and glamour of the Olympics to cover up what China is doing… I applaud the Biden administration [for boycotting], I applaud the United Kingdom, I applaud Australia. But where’s the rest of the free world? They need to join in dramatizing this so China knows it doesn’t get a free pass.”

Akiko Fujita is an anchor and reporter for Yahoo Finance. Follow her on Twitter @AkikoFujita

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