On Sunday, Chinese state media reported that China has launched an investigation into Foxconn, a Taiwan-based company renowned for its production of iPhones.
Citing anonymous sources, The Global Times revealed that Chinese officials have conducted tax inspections at Foxconn establishments in two Chinese provinces. Foxconn has expressed its commitment to cooperate with the investigation.
As the largest manufacturer of iPhones for the U.S. tech giant Apple, Foxconn stands as one of the world’s largest employers. The Global Times also reported that China’s natural resources department conducted on-site investigations into land usage by key Foxconn businesses in the provinces of Henan and Hubei.
In a statement, Foxconn emphasized its unwavering dedication to legal compliance in all regions it operates worldwide, asserting, “We will actively cooperate with the relevant units on the related work and operations.”
Of note, Foxconn’s founder, Terry Gou, is running as an independent candidate in Taiwan’s upcoming presidential election scheduled for January. The election is anticipated to significantly influence Taiwan’s relationship with China due to escalating tensions between the two entities over the past year.
In response to Beijing’s increasingly assertive claims regarding the self-governing island, various presidential candidates have presented differing visions on how to address the issue. Terry Gou has positioned himself as an alternative to the incumbent Democratic Progressive Party (DPP), which is perceived as being hostile to Beijing.
Gou has made it clear that he is not fearful of China, even 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!'” He resigned from Foxconn’s board in September after announcing his presidential candidacy, although he still retains a 12.5% stake in the company.
At the time of his announcement, Gou was a member of the Kuomintang (KMT), a major political party in Taiwan known for its Beijing-friendly stance. The Global Times reported that many people in Taiwan suspect the investigation into Foxconn is linked to Gou’s presidential campaign. Nonetheless, Chinese experts have indicated that the investigation is a routine and legitimate procedure that any company may undergo, such as tax inspections.
The same publication quoted experts suggesting that this investigation might have an impact on the upcoming elections and emphasized that electing individuals seeking ‘Taiwan independence’ would be detrimental to regional peace and stability. They called on business communities from both sides of the Taiwan Straits to work together to prevent such a disaster.
It’s important to note that Beijing asserts that nations must choose between establishing official relations with either China or Taiwan, resulting in Taiwan having formal diplomatic ties with only a few countries. While the United States maintains diplomatic relations with China, it remains Taiwan’s most crucial ally.
Additionally, some analysts have speculated that China’s investigation into Foxconn may be a response to U.S. sanctions, potentially targeting one of America’s most successful companies, Apple. Rachel Winter, an investment partner at Killik & Co, suggested that this move could be perceived as retaliation against the U.S. sanctions, aimed at limiting China’s technological capabilities.
Last Updated: 23 October 2023