Western Companies In China Are Following The Same Business Model They Used To Work With Nazi Germany

Western Companies In China Are Following The Same Business Model They Used To Work With Nazi Germany

Will Kessler on June 29, 2023

Western companies are separating parts of their businesses as they seek to protect their Chinese operations from rising tensions, which mirrors the business tactics some historians and lawyers accuse Ford and GM of using to remain in Germany under the Nazi regime.

Many companies like Salesforce and Volkswagen are changing their approach to business in China by siloing certain operations in case U.S.-China tensions deteriorate further, preparing for actions like sanctions, according to The Wall Street Journal. The move to section off business operations and continue profiting off China’s market is similar to the tactic that Ford and GM have been accused of using when dealing with the actions of the Nazis and the German market, which was detailed by The Washington Post in 1998.

Concerns regarding human rights violations have been levied against China after claims of genocide targeting the Uyghur population and reports of internment camps in the Xinjiang region. The Biden administration signed a bill banning imports from the region and imposing sanctions on those responsible for forced labor in 2021.

The U.S. Holocaust Memorial Museum’s Simon-Skjodt Center for the Prevention of Genocide, which aims to prevent genocides like those that happened to the Jews in the Holocaust, released a report in 2022 outlining a number of concerning practices by the Chinese toward the Uyghurs, including mass incarceration, torture, forced sterilization and forced labor, which are similar to actions taken by the Nazis.

Western companies are siloing Chinese portions of their business operations so they can still capitalize on the huge Chinese market in case tensions escalate further and either the U.S. or China imposes further sanctions, according to the WSJ. Other advantages of isolating Chinese operations include being more responsive to local markets and better combating Chinese competitors.

“Will something change if Volkswagen leaves?” said an anonymous Volkswagen spokesperson on whether the company is complicit in Chinese human rights violations near its Xinjiang plant, which is only 15 miles away from traces of forced labor camps, according to Politico Europe. “We have doubts about this.”

Ford and GM have been accused in the past of separating off their operations in Nazi Germany and allegedly cooperating with Nazi war production, according to the Post. GM and Ford argue that the companies’ German subsidiaries were separate and that the companies bear little or no responsibility for the actions of those subsidiaries.

After the Nazi occupation of Czechoslovakia, GM Chairman Alfred P. Sloan defended the strategy of remaining in Germany as “highly profitable,” according to the Post. In a letter, Sloan remarked that the internal politics of Nazi Germany “should not be considered the business of the management of General Motors.” GM has since released a statement saying that it wished it could “hit the rewind button and change some of the things Mr. Sloan thought and said,” according to the Jewish Virtual Library.

Sequoia Capital, a major American venture capital firm, announced in June that it plans to completely separate its Chinese and U.S. operations after growing tensions, rebranding as HongShan in China, according to the WSJ.

Tensions remain high between the U.S. and China after President Joe Biden alluded to Chinese Leader Xi Jinping as a “dictator” when talking about the Chinese spy balloon that flew over the U.S. in February. Secretary of State Antony Blinken later refused in an interview to say whether Xi is a dictator.

Salesforce CEO Marc Benioff previously said in statements to a CNN anchor in September 2022 that he was considering moving his company out of U.S. states that are “restricting or outlawing abortion.” In the previous quarter, Salesforce reported $714 million in revenues from the Asia-Pacific region.

Salesforce and Volkswagen did not respond to a request for comment.