Foxconn’s logo is seen in front of the company’s building in Taipei, Taiwan, November 10, 2022. Portal/Ann Wang/File Photo Acquire License Rights
TAIPEI, Oct 24 (Portal) – Taiwan’s Vice President Lai Ching-te on Tuesday criticized China over its investigation into major Apple supplier Foxconn (2317.TW), saying Beijing should “appreciate” Taiwanese companies and not during one Election pressure on them.
Foxconn is facing a tax investigation in China, two sources close to the company said on Monday, confirming a report by China’s state-backed Global Times.
The sources said they believed the disclosure was made for political reasons related to January’s elections in Taiwan, in which company founder Terry Gou is running as an independent presidential candidate.
The Global Times said in an English-language article late Sunday that Gou’s candidacy could split the opposition vote and potentially secure a victory for Lai, who is already leading in the polls.
China claims Taiwan as its own territory and Beijing loathes Lai, whom it considers a separatist. He says only Taiwan’s people can decide its future and Beijing has rejected his offers for talks.
At a news conference in Taipei, Lai asked about Beijing’s investigation into Foxconn and said China should “appreciate and appreciate” Taiwanese companies that have helped them in the country’s economic development.
“During an election, China does not need to pressure Taiwanese companies by requiring them to take a stand or even directly support a candidate they prefer,” he said.
Taiwanese companies would lose trust in China and if they were afraid, they would shift production elsewhere, which would be a big loss for China, Lai added.
Foxconn is pushing to diversify its manufacturing base outside China to places like India, which one of the sources said may have contributed to Beijing putting pressure on the company.
Gou did not comment on the investigation, and his campaign directed questions to Foxconn, noting that he was no longer involved in the company’s day-to-day operations, although he remained a large shareholder.
According to his media team, Gou canceled a campaign event originally scheduled for Monday evening without giving a reason and no events are planned for Tuesday.
Foxconn said in a statement on Sunday that regulatory compliance is a “fundamental principle” of its business operations and that the company will “actively cooperate with relevant entities in related work and operations.”
Foxconn shares continued their declines on Tuesday, falling more than 2% compared to a stagnant broader market (.TWII). Shares closed 2.9% lower on Monday.
TROUBLESHOOTING
Taiwan often accuses Beijing of trying to exert military or economic pressure to influence the outcome of its elections to ensure an outcome favorable to China, whose government has not commented on the Foxconn investigation.
A senior Taiwanese security source, who spoke on condition of anonymity because he was not authorized to speak to the media, told Portal the government’s assessment was that China’s top leadership was unhappy with the Global Times story.
That’s because the ruling Democratic Progressive Party, of which Lai is chairman, launched the investigation so quickly to accuse China of trying to interfere in the election to win more support from voters, the source added.
Authorities in China have not yet confirmed the investigation and there has been no further media coverage in the country.
At a separate event, former Taipei Mayor Ko Wen-je, who is running for president for his Taiwan People’s Party and is ranked second to Lai in many polls, said China, “which claims to be a world power,” said investigation should explain.
“The biggest problem in this matter is that the Taiwan government has no way to communicate with the mainland on behalf of Taiwanese companies,” Ko said.
China suspended a routine mechanism for government talks with Taiwan after President Tsai Ing-wen took office in 2016.
Reporting by Ben Blanchard and Yimou Lee; Additional reporting by Jeanny Kao; Editing by Jacqueline Wong and Jamie Freed
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