Taiwan is due for election in January 2024 and Foxconn’s founder Terry Gou is running as an independent candidate for president. China has initiated a probe on the Taiwanese firm Foxconn, largest private-sector employer andbiggest Apple manufacturer on its soil, which looks like an attempt to influence Taiwan elections.
Taiwan would be in a middle of a fierce power tussle during upcoming elections and Taiwanese Vice President and ruling Democratic Progressive Party (DPP) Chairman, Lai Ching- te, has appeared to be an utmost favorite as per the opinion polls conducted across the self- ruled island nation. The other contenders, Hou Yu-Ihof main opposition party Kuomintang (KMT), Ko Wen-Je, a former Taipei mayor, is the candidate for the small Taiwan People’s Party, and Terry Gou, billionaire founder of Apple supplier Foxconn, running independently, also have high stakes in the election and are being closely watched by China.
Among all the big names running for the top post Lai is the people’s favorite to lead Taiwan but at the same time is disliked by China due to his constant denial of China’s territorial claims. Lai due to his strong views has been declared a separatist by China. China is aware the that Foxconn’s Terry Gouis a businessman operating on its soil and can be a great resource to push pro-China agendas during the Taiwan’s election. Gou had claimed that he is the only one who can maintain peace in the region because of his extensive business and personal contacts in both China and the U.S.
The tax probe on Taiwanese tech giant is considered to be a part of a well thought-of strategy where China wants to pressurize Terry Gou to behave in a certain manner during the elections. Terry Gou by running for president postmight split the opposition party Kuomintang(KMT) votes leading to a further push toruling DPP’s Lai, who is already leading in the polls. Taiwan’s opposition party the Kuomintang though has not indicated any inclination towards Beijing but showed interest in breaking the ice with China if it wins the elections. It is to be noted that China had pulled out of diplomatic talks with Taiwan ever since the President Tsai Ing-wen took office in 2016.
China is probing land use and tax irregularities done by Foxconn but has not explained as to what actually has gone wrong. Zhu Fenglian, a spokesperson for China’s Taiwan Affairs Office looking after the relations with island nation Taiwan called this to be a routine procedure. “Relevant mainland authorities treat all enterprises equally and conduct compliance investigations in accordance with laws and regulations,” shesaid during media briefing. She further added, “while Taiwan companies are sharing growth dividends and achieving rapid development on the mainland, they should also assume corresponding social responsibility and play an active role in promoting the peaceful development of cross-Strait relations”.
Taiwan’s Vice President Lai Ching-te has expressed his displeasure against Foxconn’s probe and unwanted pressure being exerted by China, especially when the elections are around the corner. He while speaking to media said China should “cherish and treasure” Taiwanese companies considering the boost they have given to country’s economy and stop pressurizing
them. “During an election, China does not need to put pressure on Taiwanese companies, demanding they declare a position, or even that they directly support a candidate they prefer,” he said.Taiwanese companies will lose their confidence in China and if they feel scared will shift production elsewhere, which will be a big loss to China, Lai added.
Foxconn has an extensive global footprint with over 173 factory and office locations, 7 listed subsidiaries, and operations in 24 regions and across the global. It is a major player in China’s mobile tech market and the company’s founder Gou believes that it has been doing business in China under full compliance keeping all kind of legalities in mind. Gou had expressed his views and doesn’t want to be treated the Jack Ma’s way in China.
Foxconn has already started to diversify its manufacturing capabilities outside China and is now focusing more on countries like India, which is another reason why China has come down heavily on the tech giant. Gou’s election campaign team has hinted that he is not fully involved in company’s day-to-dayoperations but remains a big shareholder.
One senior Taiwanese security source, speaking on condition of anonymity as they were not authorized to speak to the media, told Reuters the government’s assessment was that China’s senior leadership was not happy with the Global Times story.
Speaking at a separate event, former Taipei Mayor Ko Wen-je, who is running as presidential candidate for his Taiwan People’s Party and is second to Lai in many polls, said China “which claims to be a world power” should explain the investigation.”The biggest problem in this matter is that the Taiwanese government has no way to communicate with the mainland on behalf of Taiwanese companies,” Ko said. Experts believe that these are standard tactics of Beijing where they try to exert pressure on companies doing business on their soil, Apple is one example and now it is Foxconn, though which it wants to influence the outcome of Taiwan elections to something which is favorable for China.