Foxconn founder and tech billionaire Terry Gou kicked off a third-party bid for the Taiwanese presidency in August, but he vanished from the campaign trail this week, three months before the election.
Gou has offered no public explanation for canceling his campaign events, but it may be no coincidence that Communist China launched an investigation of Foxconn’s taxes on Sunday.
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U.S. Department of StateGou’s last public event was on Sunday night, the same day China’s state-run Global Times announced tax inspections of Foxconn’s operations in Guangdong and Jiangsu provinces, along with investigations of the company’s land-use practices in Henan and Hubei.
The Global Times may have tipped Beijing’s hand by musing that the supposedly “normal” investigations might hurt Gou’s campaign, and that would be a positive development because even though Gou is aligned with the pro-China Kuomintang (KMT) party in Taiwan, his campaign might “further divide the island’s opposition camp” and benefit “secessionist ruling Democratic Progressive Party candidate Lai Ching-te.”
The Global Times followed up by spilling several hundred words about how “reasonable and legal” it was for China to suddenly launch four investigations into a world-famous company strongly associated with a Taiwanese presidential candidate. The Chinese Communist paper urged other Taiwanese companies to ignore what happens to Foxconn and keep investing in China.
Foxconn responded to the investigations with a statement that said “legal compliance everywhere we operate around the world is a fundamental principle” of the company, whose formal name is Hon Hai Technology Group.
“We will actively cooperate with the relevant units on the related work and operations,” Foxconn pledged.
Huang Shih-hsiu, a spokesman for Gou’s campaign, told Voice of America News (VOA) on Wednesday that China’s Foxconn probe “has nothing to do with us.”
Terry Gou actually made a point of daring China to attack his assets there when he announced his presidential candidacy.
“If the Chinese Communist party regime were to say ‘If you don’t listen to me, I’ll confiscate your assets from Foxconn,’ I would say ‘Yes, please, do it!’” he boasted in August, seeking to allay concerns that China could control a President Gou by threatening his financial and corporate interests.
Gou said China would not dare to go after Foxconn because “no foreign investor will dare to invest” in China after such a heavy-handed maneuver. Interestingly, the Global Times specifically told other foreign investors not to be nervous about the Foxconn investigation, perhaps making a sinister allusion to Gou’s defiant comments in August.
The leading candidate in the Taiwanese presidential race, sitting vice president Lai Ching-te (who is often referred to in Western media by his Anglicized name William Lai), on Tuesday criticized China for hassling Foxconn. Lai suggested Beijing learn to “cherish” Taiwanese companies instead.
“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,” Lai said, as quoted by the Taipei Times.
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U.S. Navy / LOCAL NEWS X /TMXEchoing Gou’s comments in August, Lai warned China that it risked scaring away Taiwanese and other foreign investment by persecuting Foxconn, a tech giant and major supplier to Apple.
A Taiwanese security source told the Taipei Times that senior leadership in Beijing was unhappy with the Global Times for making a big story out of the Foxconn investigations, because it gave Lai and the DPP an issue they could use against China-friendly opposition candidates.
“Authorities in China have not yet confirmed the probe, which has not received further media coverage within the country,” the Taipei Times observed.
According to the latest polls, the second-place candidate behind Lai is not Gou, or KMT’s candidate Ho Yu-ih, but rather Ko Wen-je of the tiny Taiwan People’s Party (TPP). Ko on Tuesday demanded China explain why it decided to investigate Foxconn during the Taiwanese presidential election.
“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 complained.
The New York Times (NYT) noted there is growing unease among top Chinese Communist Party leaders about just how far they can afford to push foreign investors who were already looking for ways out of China after the Wuhan coronavirus pandemic:
In recent months, central government authorities have warned local and provincial governments facing budget shortfalls not to use arbitrary fines to raise money. Beijing is trying hard to woo foreign investment to strengthen economic growth and maintain China’s leading role in global supply chains.
An article last Wednesday in Study Times, the official publication of the Communist Party’s most elite training institute, the Central Party School, warned that inappropriate use of fees and intervention by local governments could lead to “ultimately disrupting the business order, damaging the business environment, and affecting the confidence of the business.”
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From this perspective, the hyper-nationalist Global Times might have been playing its part in a Communist Party factional struggle, pulling the trigger on a story that cooler heads in Beijing wanted to keep quiet.
The Financial Times (FT) on Tuesday viewed the Foxconn story in light of China’s deteriorating relationship with Apple, which has been “trying to navigate an increasingly complex relationship with China at a time of historic tensions between Beijing and Washington.”
Apple CEO Tim Cook was in China last Thursday to meet with high-ranking subordinates of dictator Xi Jinping, including the commerce and information technology ministers. The timing of a major story only a few days later about Chinese regulators shaking down Apple’s biggest supplier is interesting, and possibly more relevant than any Communist clique’s desire to rattle Terry Gou, who is currently running in a distant fourth place for the Taiwanese presidency.
“Chinese government departments and state-owned enterprises have in recent months banned or discouraged employees from using Apple devices. In September, Beijing warned of iPhone-related ‘security incidents,’” FT recalled.
