In a significant development, China’s tax authorities have commenced a series of investigations into Foxconn, the company responsible for manufacturing Apple’s iconic iPhone. These investigations come several months after the company’s billionaire founder, Terry Gou, announced his intent to run in Taiwan’s presidential elections.
Foxconn now finds itself under the scrutiny of tax audits pertaining to its operations within China. Simultaneously, Chinese authorities are conducting inquiries into land use matters in two provinces, as reported by local media sources. It is important to note that while these investigations have been confirmed by the Taiwan-based manufacturer, no official announcements have been made by Chinese government departments. This has raised concerns of potential political motivations underlying the probes.
Terry Gou’s declaration in August of his candidacy as an independent leader in Taiwan’s 2024 presidential election appears to have triggered these investigations. Gou, a prominent and outspoken businessman, resigned from Foxconn’s board shortly after his election bid announcement.
Foxconn, also known as Hon Hai Technology Group, stands as one of the primary suppliers of smartphones for tech giant Apple. The company has expressed its willingness to cooperate fully with the ongoing investigations, with a commitment to adhering to legal compliance worldwide. A company statement reads, “Legal compliance everywhere we operate around the world is a fundamental principle of Hon Hai Technology Group. We will actively cooperate with the relevant units on the related work and operations.”
As a direct consequence of this news, Foxconn’s shares experienced a decline of over 2% on Monday, while Apple’s shares remained flat during pre-market trading.
Terry Gou’s presidential candidacy enters the political landscape against a backdrop of escalating tension surrounding Taiwan’s independence. China has persistently expressed its ambition to incorporate Taiwan into the Chinese state through its “reunification” plans, despite robust opposition from Taiwan’s populace and its major political parties. This has led to a cessation of communications between China and Taipei since 2016, with China increasingly displaying aggressiveness by deploying more warplanes and ships into Taiwan’s air defense zone in recent years.
Gou’s presidential campaign has seen him emphasize his commitment to establishing peace across the Taiwan Strait for the next 50 years and fostering mutual trust. In addition, he has drawn comparisons to the Ukraine-Russia conflict, warning against Taiwan’s transformation into another Ukraine. He has also criticized President Tsai Ing-wen’s party for escalating tensions, asserting, “Taiwan must not become Ukraine, and I will not let Taiwan become the next Ukraine.”
The ramifications of these investigations into Foxconn remain unclear, but their timing, amidst political sensitivities, raises questions about potential motivations and their impact on global technology and geopolitics.
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