Chinese workers at a construction site in Brazil for a factory owned by China’s electric vehicle giant BYD (SZ:002594) have been identified as victims of human trafficking, according to Brazilian labor authorities. This controversy is unfolding in BYD’s largest overseas market.
In response, BYD and its contractor Jinjiang Group agreed to house the 163 affected workers in hotels while negotiating an end to their contracts, Brazil’s Labor Prosecutor’s Office stated. However, the statement did not elaborate on how the authorities reached their conclusions.
While both BYD and Jinjiang have not immediately commented, Jinjiang has dismissed the allegations, calling them a result of translation misunderstandings. A BYD spokesperson shared Jinjiang’s social media post disputing claims of “slavery-like conditions.” Initially, BYD announced it had severed ties with Jinjiang, but later a BYD executive accused foreign and Chinese media of undermining Chinese brands and the China-Brazil relationship.
China’s foreign ministry confirmed communication with the Brazilian government to investigate the matter but has not addressed the trafficking claims directly. Brazilian prosecutors are set to reconvene with the companies on January 7 to propose a resolution.
CHINA’S EXPANDING INFLUENCE IN BRAZIL
A potential deal could clear BYD and Jinjiang from labor prosecutors’ investigations, but scrutiny from labor inspectors and federal prosecutors may persist.
BYD is building the Bahia factory to produce 150,000 cars annually, aiming to start production in early 2025. Brazil, one of BYD’s fastest-growing markets, accounted for nearly 20% of the company’s international sales in 2024. The $620 million factory project symbolizes China’s deepening influence in Brazil, reflecting closer bilateral ties.
However, the controversy over worker conditions could strain this relationship. While Brazil has welcomed Chinese investments, China’s practice of employing Chinese workers abroad raises concerns about job creation for local populations—a priority for President Luiz Inácio Lula da Silva.
For BYD, the investigation comes as the company seeks global expansion, building factories in Hungary, Mexico, Thailand, Uzbekistan, and Brazil to serve its growing international markets. Despite 90% of its sales being in China, BYD’s aggressive global push has placed it as a leader in the EV market, outselling major automakers like Ford and Honda.
RARE BACKLASH IN CHINA
The case has sparked rare criticism of BYD on Chinese social media, highlighting concerns over worker rights. Videos released by Brazilian prosecutors showed workers’ poor living conditions, including bunk beds without mattresses and excessively long working hours.
In Brazil, “slavery-like conditions” include forced labor, degrading work environments, and practices that violate human dignity. Prominent Chinese commentator Hu Xijin acknowledged possible misunderstandings but urged Chinese construction companies to improve worker conditions.
For BYD, this incident underscores the challenges it may face as it expands globally, with Hu noting that the company must match its growing influence with higher standards and practices.
