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China has launched an investigation into Apple iPhone maker Foxconn over taxes and land use, Chinese state media reported on Sunday.
The Global Times, citing anonymous sources, reported that tax authorities inspected Foxconn sites in Guangdong and Jiangsu provinces, and nature conservation officials also inspected sites in Henan and Hubei.
Foxconn said it would cooperate with the investigation. “Compliance with laws and regulations is a fundamental principle for the group worldwide,” Foxconn said in a statement. “We will actively cooperate with the relevant authorities.”
The Global Times article quoted an expert as saying: “Taiwan-funded companies, including Foxconn. . . should also assume appropriate social responsibilities and play a positive role in promoting the peaceful development of cross-strait relations.”
Foxconn founder Terry Gou is running as an independent candidate in Taiwan’s presidential election in January, a contest that will have significant implications for Taiwan’s relations with China and tensions across the Taiwan Strait.
Gou, who handed over the reins of Foxconn to a successor four years ago, resigned his board seat in early September after announcing his presidential candidacy, but retains a 12.5 percent stake in the company.
Beijing has a history of targeting local subsidiaries of Taiwanese companies with regulatory investigations and political pressure during sensitive or tense times. Chinese officials often call on Taiwanese companies to help promote “peaceful development” between the two sides.
China claims Taiwan as part of its territory and reserves the option to take the island by force if Taipei resists unification. The People’s Liberation Army is continually increasing its efforts to survey the airspace and waters near Taiwan.
According to a poll conducted this week by Formosa, one of Taiwan’s leading pollsters, Gou is trailing all three other presidential candidates so far, with an approval rating of just 7 percent.
The founder insists he is not following China’s wishes despite his decades of doing business in China, which has made Foxconn the country’s largest private employer and exporter.
“If the Chinese Communist Party regime said, ‘If you don’t listen to me, I’ll confiscate your assets from Foxconn,’ I would say, ‘Yes, please, do it!'” Gou said when announcing his presidential candidacy on August 28th. “I can’t follow their orders. I’m not threatened.”
Apple is also trying to navigate an increasingly complex relationship with China at a time of historic tensions between Beijing and Washington. Last week, Apple CEO Tim Cook traveled to China and met with members of Xi Jinping’s leadership team, including Vice Premier Ding Xuexiang and China’s trade and information technology minister.
Chinese government agencies and state-owned companies have banned or discouraged their employees from using Apple devices in recent months. In September, Beijing warned of iPhone-related “security incidents.”
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The investigation into the Apple supplier also highlights the general uncertainty among foreign companies in China after Beijing cracked down on the operations of consulting firms and due diligence groups.
On Friday, the Financial Times reported that Chinese police had raided the Shanghai offices of WPP-owned media agency GroupM.
Additional reporting by Ryan McMorrow and Sun Yu