CHINA: China has initiated an investigation into Foxconn, a Taiwan-based company that manufactures iPhones for Apple, Chinese state media said on Sunday.
A Chinese news portal, citing unnamed sources, reported that tax inspections were carried out at Foxconn facilities in two Chinese provinces.
Foxconn has stated that it will cooperate with the investigation. The company is a major iPhone maker for US tech giant Apple and is one of the biggest employers in the world.
The Chinese media portal also noted that China’s natural resources department conducted on-site investigations into land usage by key Foxconn businesses in Henan and Hubei provinces.
“Legal compliance everywhere we operate around the world is a fundamental principle of Hon Hai Technology Group (Foxconn),” the company stated in a statement.
“We will actively cooperate with the relevant units on the related work and operations,” the statement continued.
Terry Gou, the founder of Foxconn, is running as an independent candidate in Taiwan’s upcoming presidential election scheduled for January.
The election is anticipated to wield significant influence over Taiwan’s relationship with China, particularly as tensions between the two have escalated in the past year.
With Beijing’s increasingly assertive claims over the self-governed island, presidential candidates are presenting diverse strategies for how to address this issue.
Gou has positioned himself as an alternative to the incumbent Democratic Progressive Party (DPP), which is perceived as having a more confrontational stance towards Beijing, drawing upon his extensive experience working in China.
However, he stated that he is not intimidated by China, stating, “If the Chinese Communist party regime were to say ‘If you don’t listen to me, I’ll confiscate your assets from Foxconn,’ I would say ‘Yes, please, do it!’
In September, he resigned from his position on Foxconn’s board after announcing his candidature for the presidential race. He had handed over the company’s management in 2019 when he first entered the presidential race, though he still maintains a 12.5% ownership stake in Foxconn.
He was then a member of Taiwan’s largest political party, the Kuomintang (KMT), which is thought to be sympathetic to Beijing.
A Chinese news portal reported that there are suspicions among “many people” in Taiwan that Foxconn is under investigation due to Gou’s presidential bid.
Nevertheless, the state-run paper noted that Chinese experts stated that the investigation “is normal and legitimate, as any company goes through tax inspections”.
It also quoted experts who stated that “if the secessionists who seek ‘Taiwan independence’ win the elections, that would be a huge disaster to the peace and stability of the region, and the Chinese people of both sides of the Taiwan Straits, including the ones in the business circle, should work together to prevent disaster from happening.” The experts said that the investigation may have an impact on the elections.
Beijing asserts that countries must choose either China or Taiwan for official diplomatic relations, leaving Taiwan with only a limited number of formal international ties. While the United States officially maintains diplomatic relations solely with China, it remains Taiwan’s most significant ally.
Some, however, contend that China is using the probe as a way of striking back at the United States over its sanctions by targeting one of its largest corporations, Apple.
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