Volkswagen on Tuesday defended its car plant in Xinjiang, after leaked documents shed light on Chinese detention camps in the region holding over a million Uighurs and other Muslim minorities.

Volkswagen said in a statement it was "aware of the situation in the region" and was closely monitoring developments.

It said the decision to open the plant in Xinjiang's capital city of Urumqi in 2013 was made "purely on economic considerations" based on the northwestern region's economic growth potential.

The factory, which Volkswagen operates along with its Chinese partner SAIC, employs 650 people, a quarter of which come from ethnic minorities.

"All employees in the Urumqi factory have a contract with SAIC Volkswagen," the statement said.

Global media outlets on Sunday released a trove of leaked Chinese government papers exposing the draconian rules governing life in the internment camps.

The explosive revelations refute Bejing's longstanding claim that the camps are voluntary vocational training centres aimed at preventing extremism by teaching Mandarin and job skills.

The release of the so-called China cables has raised questions about Volkswagen's presence in the area, Germany's Sueddeutsche daily said, accusing the car giant of "mostly closing its eyes" to the mass detentions.

Volkswagen group CEO Herbert Diess came under fire in April when he told the BBC he was "not aware" of long-standing reports of abuses in the camps.

On Tuesday, Volkswagen said it hoped to contribute to the region's development with its activities in Xinjiang.

"By offering employment, we want to help improve the social environment for the people in Urumqi," it said.

The factory, which produces some 50,000 Volkswagen Santana sedans a year, is one of the group's smallest plants in the world.

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