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China has launched an investigation into Apple iPhone maker Foxconn over taxes and land use, Chinese state media reported on Sunday.
The Global Times, citing anonymous sources, said tax officials had inspected Foxconn’s sites in Guangdong and Jiangsu provinces, and natural resources officials had inspected sites in Henan and Hubei.
Foxconn said it was cooperating with the investigation. “Compliance with laws and regulations is a fundamental principle for the group worldwide,” Foxconn said in a statement. “We will actively cooperate with the actions of the relevant authorities.”
A Global Times article quoted an expert as saying, “Taiwanese-funded companies, including Foxconn, . . . should assume relevant social responsibilities and play a positive role in promoting the peaceful development of cross-conflict relations.”
Foxconn founder Terry Gou is running as an independent candidate in Taiwan’s presidential election in January, a move that will have a significant impact on Taiwan’s relationship with China and tensions across the Taiwan Strait.
Gou, who handed over management of Foxconn to a successor chief executive four years ago, resigned from his position on the board after announcing his presidency in early September, but retained a 12.5 percent stake in the company.
Beijing has in the past targeted local subsidiaries of Taiwanese companies with regulatory probes and political pressure at critical or tense times. Chinese officials often urge Taiwanese companies to promote “peaceful development” between the two sides.
China claims Taiwan as part of its territory and has the option of seizing the island by force if Taipei resists unification. The People’s Liberation Army has continued to step up operations to inspect the airspace and waters near Taiwan.
According to a poll conducted this week by Formosa, one of Taiwan’s leading pollsters, Gou has so far trailed the other three presidential candidates with a 7 percent approval rating.
Despite decades of doing business in China, which has made Foxconn the country’s largest private employer and exporter, the founder insists he is not doing China’s bidding.
“If the Chinese Communist Party regime says, ‘If you don’t listen, I’ll confiscate your assets from Foxconn,’ you say, ‘Yes, please do it!’ Presidential election on August 28. “I cannot comply with their orders. I will not be intimidated.
Apple is trying to navigate an increasingly complicated relationship with China at a time of historic tensions between Beijing and Washington. Last week, Apple CEO Tim Cook traveled to China and met with members of Xi Jinping’s leadership team, including Vice Premier Ding Xuxiang and China’s ministers of commerce and information technology.
Chinese government departments and state-owned enterprises have banned or discouraged employees from using Apple devices in recent months. In September, Beijing warned of “security incidents” related to the iPhone.
The investigation into an Apple supplier highlighted the wider uncertainty among foreign businesses in China after Beijing cracked down on the activities of advisers and due diligence teams.
On Friday, the Financial Times reported that Chinese police had raided the Shanghai offices of WPP-owned media company GroupM.
Additional reporting by Ryan McMorrow and Sun Yu