China on Wednesday urged Taiwanese firms operating in the country to show “responsibility” after Beijing launched a probe into tech giant Foxconn over tax and land irregularities. State media reported over the weekend that Foxconn — a Taiwanese firm that is one of the world’s largest contract producers of electronics and a key supplier for Apple’s iPhones — was under investigation. However, it did not detail what specific violations were suspected. The company, also known as Hon Hai Precision Industry, said it would cooperate with authorities “for the operations concerned” without providing further details.
The probe sparked concerns in Taiwan, where the firm is a significant employer and its billionaire founder, Terry Gou, is running in January’s presidential elections as an independent candidate. Some media outlets on the island say China is trying to dissuade Gou from running since his candidacy could split the opposition camp and benefit pro-independence candidate Lai Ching-te.
However, the chief of the DPP’s legislative body dismissed such speculation, saying the mainland should “cherish” Taiwanese companies and refrain from pressuring them during a sensitive election season. He added that if Taiwanese businesses feel unjustly pressured, they might gradually relocate their bases out of the mainland, which could hurt bilateral trade and economic ties.
The deputy dean of Xiamen University’s Taiwan Research Institute told the Global Times that it is normal for Chinese authorities to conduct tax inspections and land use investigations on enterprises suspected of violating rules and regulations. “Foxconn’s subsidiaries are obliged to cooperate with audits and investigations actively, and if there are indeed violations, they should admit mistakes and step up rectification,” he added.
Another cross-strait relations expert noted that the Foxconn case reflects the close industrial cooperation between the two sides and that its subsidiaries in the mainland cannot ignore mainland laws and regulations. He also said that the mainland treats all enterprises equally and conducts compliance investigations according to law and regulation. “Taiwanese-funded companies should shoulder their social responsibilities and actively contribute to the peaceful development of cross-strait relations,” he said.
In a statement on Wednesday, the Taiwan Affairs Office of the Ministry of Foreign Affairs of the PRC, which manages Beijing’s relations with self-ruled Taiwan, called the investigation “normal law enforcement behavior.” It also said that the mainland expects Taiwanese-funded enterprises to fulfill their social responsibilities and contribute to regional stability, a statement quoted by the Global Times as saying.
The Chinese economy depends heavily on foreign investment, especially from foreign-funded companies like Foxconn. The firm employs more than a million people nationwide and is China’s biggest private-sector employer. Labor unions and local government officials have long pressured the firm to address worker safety issues, but it has yet to comply with all requests.
The government has taken steps to improve the situation, including introducing new regulations on wages and working conditions. The rules will come into effect this year.
