iPhone-maker Foxconn faces investigation in China over tax and land use

Foxconn has assured its cooperation with the investigations

In a move that has raised eyebrows and sparked speculation about political motivations, China's tax authorities have initiated a series of investigations into Foxconn, the company responsible for manufacturing Apple's iconic iPhone.

The move come just months after Foxconn's billionaire founder, Terry Gou, announced his bid for the Taiwan presidential elections that are due to be held next year.

The Global Times, citing anonymous sources, reported that Foxconn has been subjected to tax audits concerning its operations within China. Additionally, investigations into land use have been launched in two Chinese provinces, though these investigations have not been officially announced by any Chinese government departments.

The tax authorities conducted inspections of Foxconn's facilities in Guangdong and Jiangsu provinces, while natural resources officials have inspected sites in Hubei and Henan.

The investigations into Foxconn have raised questions about the potential political implications, given the timing of the audits and the upcoming presidential elections in Taiwan.

In August, Gou announced his candidacy as an independent leadership candidate in Taiwan's election.

Following his declaration of candidacy, Gou stepped down from the company's board, though he still holds a 12.5% stake in the company.

The Global Times suggested that Gou's candidacy might split the opposition vote, potentially favouring current vice president Lai Ching-te, who leads in the polls.

Beijing has expressed strong disapproval of Lai, believing him to be a separatist, while Lai has insisted that only Taiwan's people should determine their future.

Foxconn, which trades as Hon Hai Technology Group in China and Taiwan, is a major player in the tech manufacturing industry and the largest supplier of iPhones to Apple, has assured its cooperation with the investigations.

In a statement, the company stated, "Legal compliance everywhere we operate around the world is a fundamental principle of Hon Hai Technology Group. We will actively cooperate with the relevant units on the related work and operations."

Apple, the world's largest company, relies heavily on Foxconn's manufacturing capabilities, and the iPhone remains one of its most important products.

These tax investigations come at a time of heightened tensions between Beijing and Washington, marked by a series of measures that have restricted each other's tech sectors.

Recently, the Biden administration unveiled plans to limit shipments to China of advanced AI chips produced by companies like Nvidia on security grounds.

China is currently grappling with an economic slowdown, and some of its largest property sector companies are at risk of defaulting on their debt obligations.

Simultaneously, the issue of Taiwan's independence remains a point of global tension, with China steadfast in its vow to integrate Taiwan into the Chinese state under "reunification" plans, despite the resistance from Taiwan's population and political parties.

Apple, whose products are manufactured by Foxconn, is also navigating a complex relationship with China.

Apple CEO Tim Cook recently travelled to China, where he met with top Chinese officials, including Vice-Premier Ding Xuexiang and China's commerce and information technology ministers.

In recent months, Chinese government agencies and state-owned corporations have actively discouraged their employees from using Apple devices.

Moreover, in September, Beijing issued warnings related to "security incidents" associated with iPhones.