Taiwan Vice President Lai Ching-te on Tuesday hit out at China over its probe of major Apple (AAPL.O) supplier Foxconn (2317.TW), 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.
Taiwan’s main opposition party the Kuomintang strongly denies being pro-Beijing, but has said it will restart talks with China if it wins and that it opposes formal independence for Taiwan.
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.