Foxconn, a Fortune 500 company known globally for making Apple iPhones, has been recently subjected to inspections by Chinese tax authorities, suspected of violating laws and regulations, state media reported Sunday.
A Taiwanese-headquartered company officially registered as Hon Hai Precision Industry Co., Ltd, Foxconn had its offices in Guangdong and Jiangsu provinces searched by tax officials, according to a report in the Chinese state-run Global Times newspaper.
The Ministry of Natural Resources also inspected Foxconn offices in Henan and Hubei provinces, where the company has major factories. Foxconn employs hundreds of thousands of workers across China.
The report did not provide more details about the searches, including when they occurred or what was found.
However, the report quotes an expert who said that "while Taiwan-funded enterprises, including Foxconn, are sharing in dividends from development and making remarkable progress in the mainland, they should also assume corresponding social responsibilities and play a positive role in promoting the peaceful development of cross-strait relations.”
Zhang Wensheng, deputy dean of the Taiwan Research Institute of Xiamen University, told the Global Times in an interview that the tax audit and land use investigations conducted by the relevant departments stemmed from any enterprise suspected of violating laws and regulations, and was a normal procedure.
"Foxconn's subsidiaries are obliged to actively cooperate with audits and investigations, and if there are indeed violations of laws and regulations, they should admit mistakes and accept penalties and step up rectification," Zhang said.
Tensions have been high between China and Taiwan in recent years. China claims the democratic self-governing island of Taiwan as part of its own territory. The sides split in 1949 after a civil war and have no official relations but are linked by billions of dollars in trade and investment.
The Chinese Communist Party regularly flies fighter planes and bombers near Taiwan to enforce its stance that the island is obliged to unite with the mainland, by force if necessary.
The tensions have occasionally spilled over into the economic realm. In recent years, China has banned pineapples, grouper fish and other agricultural products from Taiwan for import.
However, it has largely refrained from targeting Taiwanese companies that operate on the mainland.
Foxconn does the vast majority of its manufacturing in China. The company did not respond to a request for comment.
The company's founder, Terry Gou, announced in August that he would be running as a candidate in Taiwan's presidential elections, which will be held early next year. He then resigned from his seat on the board of Foxconn. Gou is seen as a China-friendly candidate whose politics mostly align with the Kuomingtang, the island's current opposition party.
