BEIJING, October 27 (TMTPost)— China underlines operational compliance for all the Taiwanese firms after Hon Hai Technology Group (Foxconn), a electronics giant based in Taiwan founded in 1974, was reported to be under investigation.
Credit：Visual China
“While sharing the growth dividends on mainland China and achieving rapid development, Taiwan-based companies should also assume corresponding social responsibilities and play a positive role in promoting the peaceful development of relations across the Taiwan Strait”, said Zhu Fegnlian, a spokesperson of the Taiwan Affairs Office (TAO) under the State Council, at a regular press conference.
Zhu did elaborate the responsibilities or what actions Taiwan companies should take. Her remark responded to a question about comments on the Democratic Progressive Party-ruled local authorities’ calling China’s reported probe into Foxconn a political practice. Relevant mainland authorities treat all enterprises equally if they launch any law-abiding investigation in accordance with the law and regulations, and such investigation is a normal law enforcement act, the spokesperson said.
Zhu said China will not change its policy of respecting, caring for and benefiting people from Taiwan, and will as always support Taiwanese businessmen and companies to invest and create a good environment for their development, continue to improve policies and measures that benefit Taiwan compatriots and enterprises, and provide opportunities and space for these individuals and businesses to develop better and faster on mainland.
While Zhu didn’t confirmed aforementioned report, nor refer to Foxconn, the report did stirred the market concern about Foxconn. Shares of Foxconn Industrial Internet, a Foxconn unit listed in Shanghai plunged 10% Monday, the first trading day after the state-backed newspaper Global Times reported at weekend that the Apple supplier was under investigations.
The tax authorities on mainland have conducted tax audits of key subsidiaries of Foxconn Group in Guangdong, Jiangsu, and other provinces, and the natural resources authorities have conducted on-site examinations of the land use of Foxconn's factories in Henan, Hubei, and other provinces, according to the report.
The audits and examinations were a normal administrative action in accordance with the law, The report quoted Zhang Wensheng, deputy dean of the Taiwan Research Institute of Xiamen University. Foxconn's subsidiaries have an obligation to actively cooperate with inspections and investigations. If there are illegal and irregular activities, they should admit their mistakes, accept punishment and quickly correct them.
Legal compliance is a basic principle of our group for operations across the world, and the group will actively cooperate with the relevant units on the related work and operations, a Foxconn statement in response to the report released Sunday.
According to Foxconn's website, since 1988, the company has invested in Shenzhen, Zhengzhou, and other places. Currently, it has more than 40 parks in mainland China, with a total of over 720,000 employees. Its product range covers consumer electronics, cloud network products, computer terminal products, components, and other four major areas.
In 2022, Foxconn's revenue was approximately RMB 1.49 trillion, an increase of approximately 10% compared to the previous year; the group's total imports were approximately RMB 540 billion, accounting for 3% of China's total imports; the total exports were approximately RMB 849 billion, accounting for 3.5% of China's total exports.
In recent years, Foxconn has started to transform and upgrade, actively investing in three emerging industries: electric vehicles, digital health, and robotics, as well as three new technological fields: artificial intelligence, semiconductors, and next-generation mobile communications. It has also built new factories in India, Vietnam, Mexico, and other regions, hoping to move away from its identity as a "manufacturing and assembly outsourcing" company and upgrade to become the world's largest electronic technology manufacturing company with cutting-edge technology layout.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
