China’s Growing Influence in Brazil
Chinese workers at a construction site in Brazil for a factory owned by China’s electric vehicle (EV) producer BYD are victims of human trafficking, Brazilian labour authorities said yesterday in a growing controversy in BYD’s biggest overseas market.
The Controversy
BYD and contractor Jinjiang Group have agreed to assist and house the 163 workers in hotels until a deal to end their contracts is reached, Brazil’s Labor Prosecutor’s Office said in a statement after meeting representatives from both firms. The brief statement did not provide details on how prosecutors had reached their conclusion.
BYD’s Response
BYD and Jinjiang did not immediately respond to requests for comment today. Jinjiang rejected the Brazilian authorities’ assessment on Monday that the workers at the site in the eastern state of Bahia were operating under "slavery-like conditions". Jinjiang said, in a social media post reposted by a BYD spokesman, that the portrayal of the workers as "enslaved" was inaccurate and that there were translation misunderstandings.
China’s Foreign Ministry
China’s foreign ministry said on Wednesday its embassy in Brazil was communicating with the Brazilian government to verify and address the situation. The ministry did not immediately respond on Friday to a request for comment on the trafficking claim.
The Investigation
The Brazil prosecutors said they would meet again with the companies on Jan 7 and propose a deal. A deal could clear BYD and Jinjiang from an investigation by labour prosecutors, but they could still face scrutiny from labour inspectors and from federal prosecutors, who have requested the sharing of evidence so that "measures can be adopted in the criminal sphere", the statement said.
BYD’s Plans
BYD has been building the factory to produce 150,000 cars initially as part of plans to start production in Brazil early next year. Nearly one in five cars BYD sold outside China in the first 11 months of 2024 was in Brazil. The factory has become a symbol of China’s growing influence in Brazil and an example of a closer relationship between both countries. BYD has invested US$620 million to set up the Bahia factory complex alone.
The Challenge
The reports of irregularities in Bahia could prove to be a major sticking point in bilateral relations. Brazil has long sought more Chinese investment. But China’s model of taking Chinese workers to the countries where it invests presents a challenge to local job creation, a priority for President Luiz Inacio Lula da Silva.
BYD’s Global Expansion
BYD, poised to outsell Ford and Honda globally this year, has been on an extraordinary expansion at home and abroad, growing capacity and undertaking a massive hiring spree. The company had nearly 1 million employees as of September. While it still makes more than 90% of its sales in China, BYD has been building passenger vehicle factories in Hungary, Mexico, Thailand, Uzbekistan and Brazil to serve its major overseas markets and increasing investments in marketing abroad.
Rare Chinese Backlash
The case has triggered a rare backlash on Chinese social media against BYD, opening a discussion over worker rights, with several internet users saying living conditions for the workers in Brazil were typical of those found on construction sites in China. Brazilian prosecutors released videos of the workers’ living quarters that showed bunk beds without mattresses. They said the workers laboured for excessively long hours, sometimes seven days a week, in conditions the authorities called degrading.
Conclusion
The controversy surrounding BYD’s factory in Brazil highlights the challenges that come with China’s growing influence in the country. As BYD expands globally, it must ensure that its operations adhere to international standards of worker rights and treatment.
FAQs
Q: What is the controversy surrounding BYD’s factory in Brazil?
A: Brazilian labour authorities have accused BYD and its contractor Jinjiang Group of human trafficking and operating under "slavery-like conditions" at a construction site in the eastern state of Bahia.
Q: How many workers are affected by the controversy?
A: 163 workers are affected by the controversy.
Q: What is BYD’s response to the controversy?
A: BYD and Jinjiang have agreed to assist and house the workers in hotels until a deal to end their contracts is reached. BYD and Jinjiang have also rejected the Brazilian authorities’ assessment of the situation.
Q: What is China’s foreign ministry’s response to the controversy?
A: China’s foreign ministry has said that its embassy in Brazil is communicating with the Brazilian government to verify and address the situation.