China is examining the activities of Foxconn, a company in Taiwan that makes iPhones, according to Chinese state media reports on Sunday.
The Global Times, using anonymous sources, states that Chinese officials checked Foxconn’s tax records in two Chinese provinces.
Foxconn has announced its willingness to cooperate with the investigation.
This company is a major producer of iPhones for the American technology giant Apple and is among the world’s largest employers.
The Global Times also mentioned that China’s natural resources department conducted on-site checks regarding land usage by significant Foxconn businesses in the provinces of Henan and Hubei.
In response, Foxconn released a statement, saying, “Legal compliance everywhere we operate around the world is a fundamental principle of Hon Hai Technology Group (Foxconn).
We will actively cooperate with the relevant units on the related work and operations.”
It’s noteworthy that Foxconn’s founder, Terry Gou, is running as an independent candidate in Taiwan’s upcoming presidential election scheduled for January.
The election’s outcome could greatly influence Taiwan’s relationship with China, which has experienced increased tensions in the past year.
As Beijing has become more assertive in its claims over the self-governed island, presidential candidates have proposed different strategies to deal with the situation.
Terry Gou, based on his extensive experience working in China, positions himself as an alternative to the incumbent Democratic Progressive Party (DPP), which is perceived as unfriendly towards Beijing.
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When announcing his candidacy, Gou expressed his lack of fear of China, saying, “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 his position on Foxconn’s board in September after entering the presidential race.
In 2019, he handed over the company’s management but retained a 12.5% stake in Foxconn.
At that time, he was a member of the Kuomintang (KMT), a significant political party in Taiwan known for its Beijing-friendly stance.
The Global Times reported that “many people” in Taiwan suspect that Foxconn is under investigation because of Gou’s presidential candidacy.
Nevertheless, the state-run newspaper noted that Chinese experts view this investigation as normal and legitimate, akin to any tax audit a company might undergo.
The Global Times also cited experts who believe that this investigation could influence the elections.
They caution that if pro-independence candidates win, it could jeopardize the peace and stability of the region.
They call on people from both sides of the Taiwan Straits, including those in the business sector, to work together to prevent such a disaster.
Beijing maintains that nations cannot have official relations with both China and Taiwan.
As a result, Taiwan only has formal diplomatic ties with a few countries.
Despite the U.S. having diplomatic relations solely with China, it remains Taiwan’s most important ally.
Some observers suggest that China’s investigation might be a response to U.S. sanctions, aimed at targeting one of America’s largest companies, Apple.
“It does feel like this might be a bit of a retaliation to the US sanctions,” said Rachel Winter, an investment partner at Killik & Co, during an interview with the BBC’s Today program.
“The US has imposed a lot of sanctions on China to try and limit their technological capabilities and it does feel that by going after Foxconn they will be harming Apple which is one of the US’s most successful companies.”
