The Volkswagen Group plans to present an independent review of conditions at its plant in the Chinese region of Xinjiang by the end of the year. Investors and managers are equally nervous because the outcome of the audit will determine whether major investors continue to classify the company as a sustainable investment. If not, significant funds are expected to withdraw from the stock, as reported by Marcel Grzanna.
Although CEO Oliver Blume aims to quickly dispel the warning “Red Flag” that a rating agency has already raised over VW, the maneuver will be challenging. China opposes independent audits and doubts will persist in an opaque environment.
Doubts also surround Alibaba‘s business positioning. The Chinese online giant was the star of the New York Stock Exchange in 2014. However, the company has since lost its shine. Not only has founder Jack Ma fallen out of favor, but there are also issues in the core e-commerce business. The restructuring of the corporate structure is stalled and chip sanctions are hindering the AI division.
A big surprise awaits Volkswagen shareholders at the end of the year. By then, the company aims to publish the results of an external examination of its Xinjiang plant. The audit puts everyone involved under pressure – the corporation, the auditing firm and investors. The credibility of all three is equally at stake.
The clock is ticking. According to the company’s leadership, the audit should robustly document that human rights violations are ruled out at this sensitive location, dispelling skepticism about the investability of the stock. For Volkswagen’s stock value, the result – or rather, its credibility – could have long-term consequences.
Only a convincing audit would prompt the US rating agency MSCI to retract its “Red Flag”, raised last fall. The red flag was a blow to Volkswagen’s self-image as a socially sustainable company. A reversal by MSCI would signal to institutional investors that they could confidently reinvest in Volkswagen shares.
So far, it remains confidential which company is conducting the investigation in Xinjiang. Only in October did Volkswagen report finding a partner. The partner’s name will be disclosed together with the audit report. Volkswagen wants to avoid discrediting the report in advance. The auditors are expected to conduct their work calmly, says a VW manager who has worked for the company in China, to China.Table.
Union Investment also links the retention of Volkswagen shares in its sustainability fund to the outcome of the audit. As Germany’s second-largest fund company, with managed equity assets of more than 430 billion euros, its decision could have a strong impact domestically, potentially hurting Volkswagen.
Union Investment had demanded an independent examination by a reputable auditing firm of Volkswagen by the end of the year. At the company’s Capital Market Day in June at the Hockenheimring, CEO Oliver Blume promised investors an audit. Blume had stated that they wanted to get rid of MSCI’s Red Flag.
Now, he is obligated. His bold announcement carries risks because the German automaker can only exert limited influence. In its joint venture with the state-owned Chinese manufacturer SAIC, Volkswagen is nominally equal. However, the allegations of systematic forced labor and crimes against humanity against Uyghurs in Xinjiang involve the highest political circles in China. The reputation of the state stands far above that of the German manufacturer. In the worst case, Volkswagen could be a pawn for the Chinese state.
Union Investment will not make any concessions regarding the audit. Only an internationally renowned company can dispel suspicions that Volkswagen is assembling cars in Xinjiang under international labor and human rights standards. Otherwise, the expulsion of Volkswagen securities from the sustainability segment could follow shortly, as the fund company confirmed to China.Table.
The issue of contaminated supply chains, affecting the entire automotive industry in China, is not even a consideration. Companies limit themselves to sweeping in front of their own doors, well aware that they are dangling from the outstretched arms of their joint venture partners when it comes to supply chains integrated with Chinese suppliers of second and third grades. Volkswagen and other corporations have no illusions that they can guarantee the integrity of supply chains beyond that.
There is also a lot at stake for the audit firm. Major players in the industry cannot afford to write benevolent reports if they do not want to risk their reputation. It was not for nothing that a handful of companies decided in 2020 to stop offering audits in Xinjiang. The TÜV Süd was one of them. The technical inspection association officially announced at the time that it would not be accepting any new orders from the region. TÜV Süd does not wish to comment further on this.
Deka fund company has already excluded Volkswagen shares from its sustainability offering. However, Deka cited deficiencies in transparency and the composition of the Wolfsburg supervisory board in its decision. Even a successful audit might not be enough to meet Deka’s stringent governance criteria.
The tech giant founded by Jack Ma is thoroughly failing to achieve the hoped-for breakthrough. The split of the corporation into six independent entities, announced only in March, is already partially history.
Last Thursday, Alibaba announced that the most crucial part of the overhaul – the separation of the 11 billion dollars-valued cloud business – will not happen. Additionally, the planned IPO of the successful grocery business Freshippo is put on hold. Following these announcements, Alibaba’s stock plummeted more than ten percent and has been unable to recover those losses this week.
These decisions come at a challenging time for Alibaba. The company is recovering from an extensive regulatory crackdown by the Chinese government, which has heavily impacted tech firms over the past three years. Simultaneously, Alibaba is attempting to regain merchants and customers who have migrated to younger competitors.
The challenges faced by traditional online retailers like Alibaba and JD.com were evident recently on Singles Day. China’s largest discount battle of the year saw both companies, according to estimates, settling for single-digit revenue growth. Rivals such as Douyin and Kuaishou, which achieved significant success with live-streaming sales, performed much better. Alibaba had to lay off tens of thousands of employees in recent quarters to cut costs.
Due to ongoing difficulties in online retail, there were high expectations for the cloud business. Nevertheless, the new CEO, Eddie Wu, decided to completely rethink the strategic realignment. He cited challenges arising from the intensified chip sanctions by the United States as the main reason.
Alibaba heavily relies on artificial intelligence, with the cloud division at the core of its AI initiatives. The company has introduced its significant language model, Tongyi Qianwen, and is also investing in emerging startups like Zhipu AI and Baichuan. Currently, chips from US manufacturer Nvidia are essential for developing AI applications. Therefore, technology companies need to equip their data centers with a large number of these chips to remain competitive.
However, this is not easy for Chinese companies like Alibaba due to US government restrictions. High-tech chips crucial for AI, such as the A100 and its successor H100, have not been allowed to be sold in China by Nvidia for some time. Recently, the US government extended the export ban to include the H800 and A800 models.
Alibaba is already facing difficulties. According to the Financial Times, the limited availability of Nvidia chips has caused internal tensions as different departments compete for computing power. The separation of the cloud business is also unrealistic because the entire corporation needs the computing capacity.
In comparison to Alibaba, other Chinese tech giants have secured larger capacities of Nvidia chips, putting them in a better position. Reports suggest that Alibaba is increasingly relying on AI chips from Huawei, but these cannot fully close the gap.
The unexpected departure of former Alibaba CEO Daniel Zhang also raises concerns among investors. Although he handed over the business to Wu as planned, he was supposed to take over the soon-to-be independent cloud division in September. Instead, he has now resigned completely.
The recent debates do not bode well for research policy in Germany. Public discussions revolve around social benefits and economic subsidies, with not a word mentioned about investments in research and development. This cannot be taken seriously!
The legislative period has been bitter for education and research policy in the two years since the government was formed. When was there comprehensive budget cuts in the last 20 years? Since 2006, there has been a significant increase in the budget of the Federal Ministry of Education and Research (BMBF) for good reasons. Does the Progress Coalition now want to depart from this?
How can one explain that this coalition, especially the Federal Finance Minister, leaves the Federal Minister of Research out in the rain? The resulting budget chaos could exacerbate the downward trend. Why is the central resource of our country so ignored: the promotion of talents, education and research?
Politics should be generational, sustainable and future-oriented. This is emphasized in every relevant political speech across parties. If this is meant seriously, then politics must focus on the sources of future prosperity, found in schools, universities, research centers and innovation hubs!
The other phrase we constantly hear is about various processes of transformation. This includes an immense innovative effort in every single process. While there is indeed global competition for subsidies, it is equally important, and perhaps more critical, to strengthen and expand central research fields now, drive forward the further internationalization of the German research landscape, and provide new impetus for university funding beyond the University Pact – just to name three central issues.
These are some examples without any claim to completeness. However, they are examples that show that even in times of crisis and budget chaos, a wise message is that Germany is not ignoring its most important resource and the sources of future prosperity.
Snow – Wednesday in Harbin couldn’t have been more fitting. After all, yesterday was 小雪 (xiao xue), which translates to “minor snow” and is one of the 24 traditional Chinese solar terms. From this day on, temperatures are expected to drop in most regions of China. Apparently, much to the delight of these Chinese women.
The Volkswagen Group plans to present an independent review of conditions at its plant in the Chinese region of Xinjiang by the end of the year. Investors and managers are equally nervous because the outcome of the audit will determine whether major investors continue to classify the company as a sustainable investment. If not, significant funds are expected to withdraw from the stock, as reported by Marcel Grzanna.
Although CEO Oliver Blume aims to quickly dispel the warning “Red Flag” that a rating agency has already raised over VW, the maneuver will be challenging. China opposes independent audits and doubts will persist in an opaque environment.
Doubts also surround Alibaba‘s business positioning. The Chinese online giant was the star of the New York Stock Exchange in 2014. However, the company has since lost its shine. Not only has founder Jack Ma fallen out of favor, but there are also issues in the core e-commerce business. The restructuring of the corporate structure is stalled and chip sanctions are hindering the AI division.
A big surprise awaits Volkswagen shareholders at the end of the year. By then, the company aims to publish the results of an external examination of its Xinjiang plant. The audit puts everyone involved under pressure – the corporation, the auditing firm and investors. The credibility of all three is equally at stake.
The clock is ticking. According to the company’s leadership, the audit should robustly document that human rights violations are ruled out at this sensitive location, dispelling skepticism about the investability of the stock. For Volkswagen’s stock value, the result – or rather, its credibility – could have long-term consequences.
Only a convincing audit would prompt the US rating agency MSCI to retract its “Red Flag”, raised last fall. The red flag was a blow to Volkswagen’s self-image as a socially sustainable company. A reversal by MSCI would signal to institutional investors that they could confidently reinvest in Volkswagen shares.
So far, it remains confidential which company is conducting the investigation in Xinjiang. Only in October did Volkswagen report finding a partner. The partner’s name will be disclosed together with the audit report. Volkswagen wants to avoid discrediting the report in advance. The auditors are expected to conduct their work calmly, says a VW manager who has worked for the company in China, to China.Table.
Union Investment also links the retention of Volkswagen shares in its sustainability fund to the outcome of the audit. As Germany’s second-largest fund company, with managed equity assets of more than 430 billion euros, its decision could have a strong impact domestically, potentially hurting Volkswagen.
Union Investment had demanded an independent examination by a reputable auditing firm of Volkswagen by the end of the year. At the company’s Capital Market Day in June at the Hockenheimring, CEO Oliver Blume promised investors an audit. Blume had stated that they wanted to get rid of MSCI’s Red Flag.
Now, he is obligated. His bold announcement carries risks because the German automaker can only exert limited influence. In its joint venture with the state-owned Chinese manufacturer SAIC, Volkswagen is nominally equal. However, the allegations of systematic forced labor and crimes against humanity against Uyghurs in Xinjiang involve the highest political circles in China. The reputation of the state stands far above that of the German manufacturer. In the worst case, Volkswagen could be a pawn for the Chinese state.
Union Investment will not make any concessions regarding the audit. Only an internationally renowned company can dispel suspicions that Volkswagen is assembling cars in Xinjiang under international labor and human rights standards. Otherwise, the expulsion of Volkswagen securities from the sustainability segment could follow shortly, as the fund company confirmed to China.Table.
The issue of contaminated supply chains, affecting the entire automotive industry in China, is not even a consideration. Companies limit themselves to sweeping in front of their own doors, well aware that they are dangling from the outstretched arms of their joint venture partners when it comes to supply chains integrated with Chinese suppliers of second and third grades. Volkswagen and other corporations have no illusions that they can guarantee the integrity of supply chains beyond that.
There is also a lot at stake for the audit firm. Major players in the industry cannot afford to write benevolent reports if they do not want to risk their reputation. It was not for nothing that a handful of companies decided in 2020 to stop offering audits in Xinjiang. The TÜV Süd was one of them. The technical inspection association officially announced at the time that it would not be accepting any new orders from the region. TÜV Süd does not wish to comment further on this.
Deka fund company has already excluded Volkswagen shares from its sustainability offering. However, Deka cited deficiencies in transparency and the composition of the Wolfsburg supervisory board in its decision. Even a successful audit might not be enough to meet Deka’s stringent governance criteria.
The tech giant founded by Jack Ma is thoroughly failing to achieve the hoped-for breakthrough. The split of the corporation into six independent entities, announced only in March, is already partially history.
Last Thursday, Alibaba announced that the most crucial part of the overhaul – the separation of the 11 billion dollars-valued cloud business – will not happen. Additionally, the planned IPO of the successful grocery business Freshippo is put on hold. Following these announcements, Alibaba’s stock plummeted more than ten percent and has been unable to recover those losses this week.
These decisions come at a challenging time for Alibaba. The company is recovering from an extensive regulatory crackdown by the Chinese government, which has heavily impacted tech firms over the past three years. Simultaneously, Alibaba is attempting to regain merchants and customers who have migrated to younger competitors.
The challenges faced by traditional online retailers like Alibaba and JD.com were evident recently on Singles Day. China’s largest discount battle of the year saw both companies, according to estimates, settling for single-digit revenue growth. Rivals such as Douyin and Kuaishou, which achieved significant success with live-streaming sales, performed much better. Alibaba had to lay off tens of thousands of employees in recent quarters to cut costs.
Due to ongoing difficulties in online retail, there were high expectations for the cloud business. Nevertheless, the new CEO, Eddie Wu, decided to completely rethink the strategic realignment. He cited challenges arising from the intensified chip sanctions by the United States as the main reason.
Alibaba heavily relies on artificial intelligence, with the cloud division at the core of its AI initiatives. The company has introduced its significant language model, Tongyi Qianwen, and is also investing in emerging startups like Zhipu AI and Baichuan. Currently, chips from US manufacturer Nvidia are essential for developing AI applications. Therefore, technology companies need to equip their data centers with a large number of these chips to remain competitive.
However, this is not easy for Chinese companies like Alibaba due to US government restrictions. High-tech chips crucial for AI, such as the A100 and its successor H100, have not been allowed to be sold in China by Nvidia for some time. Recently, the US government extended the export ban to include the H800 and A800 models.
Alibaba is already facing difficulties. According to the Financial Times, the limited availability of Nvidia chips has caused internal tensions as different departments compete for computing power. The separation of the cloud business is also unrealistic because the entire corporation needs the computing capacity.
In comparison to Alibaba, other Chinese tech giants have secured larger capacities of Nvidia chips, putting them in a better position. Reports suggest that Alibaba is increasingly relying on AI chips from Huawei, but these cannot fully close the gap.
The unexpected departure of former Alibaba CEO Daniel Zhang also raises concerns among investors. Although he handed over the business to Wu as planned, he was supposed to take over the soon-to-be independent cloud division in September. Instead, he has now resigned completely.
The recent debates do not bode well for research policy in Germany. Public discussions revolve around social benefits and economic subsidies, with not a word mentioned about investments in research and development. This cannot be taken seriously!
The legislative period has been bitter for education and research policy in the two years since the government was formed. When was there comprehensive budget cuts in the last 20 years? Since 2006, there has been a significant increase in the budget of the Federal Ministry of Education and Research (BMBF) for good reasons. Does the Progress Coalition now want to depart from this?
How can one explain that this coalition, especially the Federal Finance Minister, leaves the Federal Minister of Research out in the rain? The resulting budget chaos could exacerbate the downward trend. Why is the central resource of our country so ignored: the promotion of talents, education and research?
Politics should be generational, sustainable and future-oriented. This is emphasized in every relevant political speech across parties. If this is meant seriously, then politics must focus on the sources of future prosperity, found in schools, universities, research centers and innovation hubs!
The other phrase we constantly hear is about various processes of transformation. This includes an immense innovative effort in every single process. While there is indeed global competition for subsidies, it is equally important, and perhaps more critical, to strengthen and expand central research fields now, drive forward the further internationalization of the German research landscape, and provide new impetus for university funding beyond the University Pact – just to name three central issues.
These are some examples without any claim to completeness. However, they are examples that show that even in times of crisis and budget chaos, a wise message is that Germany is not ignoring its most important resource and the sources of future prosperity.
Snow – Wednesday in Harbin couldn’t have been more fitting. After all, yesterday was 小雪 (xiao xue), which translates to “minor snow” and is one of the 24 traditional Chinese solar terms. From this day on, temperatures are expected to drop in most regions of China. Apparently, much to the delight of these Chinese women.
