China says investigation into Apple supplier Foxconn’s operations on the mainland is ‘normal law enforcement’

Taiwanese firms on the mainland should ‘assume social responsibilities’ and promote ‘peaceful cross-strait ties’, spokeswoman Zhu Fenglian said
Chinese authorities are conducting tax audits and reviewing land use by Foxconn on the mainland, state media reported over the weekend

Foxconn

Bloomberg

Published: 3:02pm, 25 Oct 2023

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China has called its investigation into Foxconn Technology Group a routine police matter, in its first official comments on the inquiry into Apple’s most important contract manufacturing partner.

“The probes into whether companies are abiding by laws are normal law-enforcement activities, and in line with laws and regulations,” said Zhu Fenglian, spokeswoman for Beijing’s Taiwan Affairs Office, at a briefing on Wednesday.

Chinese state media reported over the weekend that regulators are conducting tax audits and reviewing land use by Foxconn, the world’s largest electronics contract manufacturer and assembler of the vast majority of iPhones at factories on the mainland and India.

Zhu, however, hinted at the briefing that the Foxconn inquiry may involve aspects beyond the business realm. “While Taiwan businesses enjoy growth on the mainland, they should also assume corresponding social responsibilities and play a more active role in promoting peaceful development of cross-strait ties,” she said.

A person walks down the stairs inside a building where Foxconn Technology Group’s offices are located in Taipei on October 23, 2023. Photo: EPA-EFE

China will “continue to support Taiwan businesses to invest and operate on the mainland”, Zhu added.

Beijing usually does not explain the actions of its regulators, leaving companies with operations in the country guessing at the ultimate goals of the government, and there has been speculation that the Foxconn inquiry is politically motivated.

The Taiwanese company, formally known as Hon Hai Precision Industry, said it will collaborate with authorities.

Shares of Hon Hai and one of its listed units, Foxconn Industrial Internet Co, tumbled on the news, at one point losing about US$9 billion in value.

A woman walks past Foxconn Technology Group founder Terry Gou Tai-ming’s presidential election campaign headquarters in Taipei on October 24, 2023. Photo: Reuters

Foxconn’s billionaire founder, Terry Gou Tai-ming, resigned from the company’s board last month, as he campaigns to become president of Taiwan.

Gou, who has not had a public engagement since Monday, previously dismissed claims he would be susceptible to Chinese pressure, if he won January’s election. He trails the top three candidates in the polls.

China has pledged to bring Taiwan under its control eventually, by force if that is what it takes. Cross-strait relations have been so frosty in recent years that the government of Chinese leader Xi Jinping has severed high-level communications with Taiwan President Tsai Ing-wen over her refusal to say that the island, with a population of 23 million people, is part of China.

In a response to a separate question on Wednesday, Zhu said that Beijing is not intervening in Taiwan’s elections, which will be held in January. Taiwan Vice-President William Lai Ching-te has been leading polls in the race to succeed Tsai, who must step down owing to term limits.