Taipei’s national security chief has said a Chinese tax probe into Taiwan tech giant Foxconn is “political” as its billionaire founder Terry Gou is running for president of the democratically ruled island.
Gou, who gave up Foxconn’s management reins four years ago, launched his presidential bid in August as an independent candidate in Taiwan’s January polls.
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The Chinese state-run Global Times reported last month that Foxconn – one of the world’s largest contract producers of electronics and a key supplier for Apple’s iPhones – was under a “normal and legitimate” investigation for tax and land issues by mainland authorities.
Chinese authorities have not confirmed the probe and Foxconn has said it will cooperate on “operations concerned” while urging “confidence” in the company.
Taiwan’s National Security Council head said on Monday there was a “political aspect” to the Foxconn probe as election analysts have predicted that Gou’s entry into the race could split the opposition vote.
“They [China] certainly don’t want Terry Gou to run,” Wellington Koo, whose department falls under President Tsai Ing-wen, told reporters.
“Based on our observations, China does not want Terry Gou to split votes [within the pro-Beijing camp],” he said.
When Gou entered the race, some critics alleged his relationship with Beijing was a cosy one given Foxconn’s numerous mainland factories, but he said he had “never been under the control of the [Chinese Communist Party]”.
Taiwan is claimed by Beijing, which dislikes the Democratic Progressive Party’s government under Tsai as she has said the island does not belong to China.
Koo added that Foxconn has also been looking to diversify its supply chain lines away from China, which could “also be a factor” in prompting an investigation from Chinese authorities.
“If all assembly lines are moved out under the request of major US brands, the harm to China will be significant,” Koo said.
His comments echoed others made by Taiwan’s top officials, including Deputy Premier Cheng Wen-tsan, who said Taiwanese businesses in China should not be subject to “political interference”.
Foxconn is China’s largest private-sector employer, with more than a million workers nationwide.
But the country’s strict COVID policies – as well as a bout of industrial unrest and ongoing diplomatic tensions with the United States – have hurt production.
In May, it bought a huge tract of land on the outskirts of Indian tech hub Bengaluru and has since announced plans to expand its India operations.
Analysts say Gou has a slim chance of winning, with DPP candidate Vice President Lai Ching-te currently in the lead.