China Investigating Apple's iPhone Assembler Foxconn—Party Paper

China is investigating Apple's iPhone assembler Foxconn in a campaign that some have considered "politically motivated."

Global Times, the Chinese state media outlet, reported on Sunday, citing sources, that tax authorities in the mainland were investigating Apple's iPhone assembler Foxconn, a Taiwanese company, at their locations in Guangdong and Jiangsu provinces. The outlet reported another on-site investigation into Foxconn's land use in Henan and Hubei provinces.

China claims Taiwan as part of its territory, but Beijing has never governed the self-administered island. In recent years, China has launched an escalating coercion campaign against Taiwan, taking the form of military drills, including a simulated blockade, ballistic missile overflights, and a rising number of warplane sorties in the skies around Taiwan.

Foxconn has said in a statement, "We will actively cooperate with the relevant authorities' operations."

"Complying with laws and regulations is a basic principle for the group worldwide," Foxconn added.

Lai Ching-te, Taiwan's vice president and the primary presidential candidate for Taiwan's ruling Democratic Progressive Party (DPP), said on Sunday during a campaign event that Foxconn should receive support at home amid the tax investigation in China.

Lai said at the event that it's up to the Taiwanese companies "to choose which countries they want to invest in, and regardless of where they decide to go, the government and the people (of Taiwan) should support them."

Though the Chinese state media have downplayed the investigation's link to Terry's presidential election campaign, analysts in Taiwan and elsewhere believe the investigation is politically motivated.

Foxconn's founder, Terry Gou, is running an independent candidate to become the next president of Taiwan. Earlier, Gou split from the Kuomintang Party (KMT) after failing to secure the nomination to run as the party's presidential candidate.

Earlier this year, KMT's top leadership picked Hou You-ih, the former mayor of New Taipei City, as the party's presidential candidate while sidelining Gou. The Foxconn founder Gou later accounced an independent presidential campaign. During the last presidential election in 2019, Gou decided to run as an independent candidate after losing the nomination race to KMT candidate Han Kuo-yu.

Beijing would prefer to see KMT return to power as the party has called for more Cross-Strait trade and better relations with Chinese leader Xi Jinping's China.

Gou's independent campaign has been seen in some quarters as a challenge to unity within the KMT, a party that Beijing would prefer to see return to power. Gou's independent campaign has caused a split in the KMT, which may lead the party towards defeat in the upcoming elections, an outcome that would be undesirable to Beijing.

Sources speaking to Reuters said that Chinese state media advertising an investigation into Foxconn, just months ahead of the elections, suggests the political motivation behind the audit.

Taiwanese experts believe Beijing's campaign may be politically motivated.

"China is now trying to salvage the blue-white alliance, Ko Wen-je tried to ally with Gou, and this was a serious blow to the morale and support of the KMT," Zhang Junhao, the Department of Political Science at Tunghai University in Taiwan, told BBC Chinese.

"Blue camp" is a term used for the KMT, while "white camp" refers to a relatively new Taiwan People's Party (TPP). Ko Wen-je, former mayor of Taipei City, is the leader of the TPP and is running to defeat the ruling DPP.

So far, KMT and the TPP have failed to forge an alliance against the ruling DPP, which has set back Beijing's plans to facilitate the KMT's victory in upcoming elections.

Zhang believes that Beijing might have a different plan to support KMT by investigating Gou-founded Foxconn to ensure that Beijing-supported KMT at least can win enough seats in the legislature even though they may lose the presidency.

In the last two years, Foxconn has relocated some of its Apple product assembly lines to Vietnam and India while downsizing the production in the Chinese mainland. Beijing isn't happy with Foxconn's strategy to diversify its geopolitical risk, as the company is often seen as a bridge to Taiwan and its politics.

Chinese experts have suggested that Foxconn has benefitted from China's economic growth, but now the company should play a role in improving relations between Beijing and Taipei.

Zhang Wensheng, deputy dean of the Taiwan Research Institute at Xiamen University in China, told Global Times that Taiwanese companies, including Foxconn, "should actively contribute to promoting peaceful cross-Straits relations and play a positive role in their continuous development."