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Chinese authorities have launched an investigation into Taiwan-based iPhone-maker Foxconn, state media reported on Sunday. The Global Times, citing anonymous sources, said officials conducted tax inspections at Foxconn businesses in two Chinese provinces.
Reporters also said China’s natural resources department made on-site investigations into land use by key Foxconn businesses in the provinces of Henan and Hubei.
“Legal compliance everywhere we operate around the world is a fundamental principle of Hon Hai Technology Group (Foxconn),” the company said in a statement.
Foxconn’s founder Terry Gou is running as an independent candidate in Taiwan’s presidential election. This is due to take place in January.
The election is expected to have a significant influence on Taiwan’s relationship with China. This is given tensions between them that have ratcheted up in the past year.
As Beijing’s claims over the self-governed island have grown more assertive, presidential candidates have pitched their differing visions on how to respond.
Mr Gou has positioned himself, based on his years of experience working in China. Furthermore, he is as an alternative to the incumbent Democratic Progressive Party (DPP), which is seen as hostile to Beijing.
However, he said he was not scared of China when he announced his candidacy. “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 his seat on Foxconn’s board in September after announcing that he was entering the presidential race.
He handed over the management of the company in 2019. This was when he announced his first run for the presidency but retains a 12.5% stake in Foxconn.
At that time, he was a member of the Kuomintang (KMT), a major political party in Taiwan which is seen as Beijing-friendly.
The Global Times reported that “many people” in Taiwan suspect Foxconn is being investigated because Mr Gou is running for the presidency.
Some are also suggesting that the investigation is a way of China hitting back at the US. This is especially over its sanctions by targeting one of its biggest companies, Apple.
“It does feel like this might be a bit of a retaliation to the US sanctions”. Rachel Winter, investment partner at Killik & Co, told the BBC’s Today programme.
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