According to Reuters, Taiwan Vice President Lai Ching-te on October 24 hit out at China over its probe of major Apple supplier Foxconn, saying Beijing should “cherish” Taiwanese companies and not put pressure on them during an election.
Foxconn is facing a tax probe in China, two sources close to the company said on Monday, confirming a report in China’s state-backed Global Times.
The sources said they believed it was disclosed for political reasons tied to Taiwan’s January elections where the company’s founder Terry Gou is running as an independent candidate for president.
The Global Times, in an English-language story late on Sunday, said by running, Gou might split the opposition vote, potentially ensuring a victory for Lai who is already leading in the polls.
China claims Taiwan as its own territory and Beijing detests Lai, whom it believes is a separatist. He says only Taiwan’s people can decide their future, and Beijing has rebuffed his offers of talks.
Speaking at a news conference in Taipei and asked about Beijing’s probe into Foxconn, Lai said China should “cherish and treasure” Taiwanese companies given their help in that country’s economic development.
“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,” he said.
Taiwanese companies will lose their confidence in China and if they feel scared will shift production elsewhere, which will be a big loss to China, Lai added.
Foxconn has been pushing to diversify its manufacturing base outside China to places such as India, which one of the sources said may have contributed to Beijing placing pressure on the company.
Gou has not commented on the probe, with his campaign team referring questions to Foxconn and pointing out he is no longer involved in the company’s day-to-day running, though he remains a big shareholder.
Gou cancelled without explanation a campaign event originally scheduled for Monday evening, and has no events planned for Tuesday, according to his media team.
Foxconn said in a statement on Sunday that legal compliance was a “fundamental principle” of its operations, and it would “actively cooperate with the relevant units on the related work and operations”.
Foxconn’s shares extended their declines on Tuesday, down more than 2% during mid-morning trade compared to a flat broader market. Shares closed 2.9% lower on Monday.
Taiwan frequently accuses Beijing of seeking to exert pressure, whether military or economic, to sway the outcome of its elections to ensure an outcome favourable to China, whose government has not commented on the Foxconn probe.
Lai said China should respect Taiwan’s democratic system, way of life and choice of president, moving away from confrontation towards an era of respectful dialogue.
He reiterated it was his “mission” to maintain the status quo across the Taiwan Strait, in a reference to how he would not seek to push for Taiwan’s formal independence, a red line for China.
