On October 22nd, the Global Times exclusively reported on the tax inspection and land investigation conducted by relevant departments on Foxconn’s subsidiary companies in accordance with the law. This report has attracted widespread attention within Taiwan. Some media speculate that this may be related to the words and actions of Terry Gou, founder of Foxconn’s parent company Hon Hai Technology Group, who announced his independent candidacy. They believe that Terry Gou’s candidacy is equivalent to supporting Lai Ching-te, a Democratic Progressive Party candidate who stubbornly adheres to a “Taiwan independence” stance. Currently, cross-strait relations are at a critical moment and facing important choices. Zhang Wensheng, Vice President of Xiamen University’s Taiwan Research Institute, stated in an interview with Global Times reporters on the 22nd that it is the shared responsibility of Chinese people from both sides of the strait to jointly maintain a good situation for peaceful development of cross-strait relations. Taiwanese businesses should also play a positive role in this regard.
Foxconn’s Tax and Land Use Are Under Investigation
On the 22nd, a reporter from the Global Times exclusively learned from an insider that tax authorities have recently conducted tax inspections on key enterprises of Foxconn Group in Guangdong and Jiangsu provinces in accordance with the law. The Ministry of Natural Resources has also conducted on-site investigations into the land use situation of key enterprises of Foxconn in Henan and Hubei provinces.
Regarding the investigation of Foxconn-related companies, Zhang Wensheng stated that it is a normal administrative procedure for relevant departments to conduct tax inspections and land use investigations on any enterprises suspected of illegal activities. This is reasonable and lawful. Foxconn’s subsidiary companies have an obligation to actively cooperate with the inspections and investigations. If there are indeed any illegal activities, they should admit their mistakes, accept penalties, and expedite rectification.
Zhang Wensheng said that the mainland of China has always welcomed and supported Taiwanese businessmen to invest in the mainland, and protected their legitimate rights and interests in accordance with the law. In recent years, relevant departments have introduced a series of policies and measures to provide equal treatment for Taiwanese compatriots and enterprises, allowing them to better share the development opportunities of the new era in the mainland. Taiwanese enterprises that invest and establish factories in the mainland have generally benefited from it. As a benchmark Taiwanese-funded enterprise, Foxconn has made considerable profits. Its subsidiary Foxconn Industrial Internet (Fii) is also listed on the A-share main board market and has contributed back to its parent company Hon Hai Technology Group. He emphasized that including Foxconn, Taiwanese-funded enterprises should not only share development dividends and achieve significant progress in the mainland but also bear corresponding social responsibilities while playing an active role in promoting peaceful cross-strait relations.
Foxconn’s investigation immediately attracted great attention within the island. Major media outlets in Taiwan, such as China Times News and United Daily News, quickly reposted the report and comments from mainland scholars.
Regarding the above report, Terry Gou’s campaign office responded on the 22nd, stating that Terry Gou had previously stated that he handed over the management rights of Hon Hai four years ago and had no involvement in the company during this period. In September of this year, he announced his resignation as a director of Hon Hai due to “personal reasons” and “will not respond” to Foxconn being investigated for tax issues in mainland China.
The Taiwan Stock Exchange inquired about the situation with Hon Hai Technology Group. Hon Hai responded on the afternoon of the 22nd, stating that “compliance and legality are fundamental principles for Hon Hai worldwide. The group will actively cooperate with relevant units in handling operations.” The Taiwanese Ministry of Economic Affairs also stated that they will maintain close contact with Hon Hai Technology Group and provide assistance as needed.
The Administrative Actions in the Mainland Are Reasonable and Legal
Taiwan’s China Broadcasting Corporation News Network reported on the 22nd that it is currently a sensitive time for Terry Gou to launch a joint signature campaign to seek independent candidacy qualifications. Taiwan’s BUSINESS TODAY MAGAZINE stated that when Terry Gou announced his independent candidacy earlier, some media believed that he not only had no chance of being elected but actually became an “assistant” to the Democratic Progressive Party (DPP) election by effectively helping DPP Chairman Lai Ching-te come into power. This would not be ignored by mainland China and would also be unacceptable to mainland Chinese people.
According to United Daily News, after Terry Gou insisted on running for election, Song Tao, the director of the Taiwan Affairs Office and the National Taiwan Affairs Office, recently visited Guandi Temple in Yuncheng, Shanxi with Andrew Hsia (Hsia Li-yan), vice chairman of the Kuomintang. Some commentators in Taiwan interpreted this move as a message to Terry Gou who worships Guan Gong. It is seen as a reminder for him to keep his promise and stay united without any ulterior motives. In response to this matter, Chen Binhua, spokesperson for the National Taiwan Affairs Office, stated that cross-strait relations are at a critical moment and facing important choices. Chinese people on both sides should jointly inherit and promote Guan Gong culture by advocating loyalty, righteousness, honesty and integrity; upholding national righteousness; safeguarding national unity; opposing separatist activities of “Taiwan independence”; and rejecting interference from external forces.
Zhang Wensheng analyzed to the reporter of Global Times on the 22nd that it is only natural for mainland China to take a series of actions against Foxconn, which has attracted high attention in Taiwan. Terry Gou’s participation in next year’s election for leader of the Taiwan region is currently at a crucial moment. The speculation from various opinions in Taiwan about mainland China’s tax inspection and land investigation on Foxconn is also related to Terry Gou’s candidacy. In this sensitive period, many opinions speculate that this is a signal from mainland China to put pressure on Terry Gou. However, the administrative actions taken by relevant departments in mainland China are reasonable and legal, and any company should be able to withstand inspections.
Zhang Wensheng said that the stock prices of Hon Hai Technology Group and Foxconn may be affected as a result. This also precisely illustrates the close industrial cooperation between both sides of the Taiwan Strait, and Taiwan’s related industries cannot remain indifferent to mainland China’s laws, regulations, and relevant reminders.
Terry Gou’s Words and Actions Spark Controversy
On November 22, 2021, Taiwan’s “Central News Agency” reviewed that the mainland announced fines against Taiwan’s Far Eastern Group for illegal and irregular activities in five provinces and cities on the mainland, as well as the reclamation of some idle construction land. After Pelosi visited Taiwan last year, the Taiwan Affairs Office immediately announced sanctions against “Taiwan independence diehards and affiliated organizations,” as well as associated sanctions against Taiwanese companies such as Speedtech Energy, Hyweb Technology, and SkyEyes GPS Technology. In an earlier incident in 2016, Hai Pa Wang Group was fined in multiple locations on the mainland due to issues found during food safety inspections, with close ties being alleged between Hai Pa Wang and Tsai Ing-wen’s family.
For some Taiwanese companies that make money in mainland China while damaging cross-strait relations, the Taiwan Affairs Office has repeatedly criticized them severely. Zhu Fenglian, spokesperson for the Taiwan Affairs Office, pointed out in 2021 regarding the investigation and punishment of enterprises involved with Far Eastern Group that we welcome and support Taiwanese compatriots and businesses to invest and develop in mainland China. We will continue to protect their legitimate rights and interests according to law. However, we will never allow individuals who support “Taiwan independence” or undermine cross-strait relations to make money in mainland China or engage in disruptive activities. Taiwanese businessmen and businesses should distinguish right from wrong, stand firm on their position, draw a clear line with “Taiwan independence” separatist forces, and take practical actions to maintain peaceful development of cross-strait relations.
In addition to Terry Gou’s independent candidacy being seen as equivalent to “guaranteeing” Lai Ching-te, some of Terry Gou’s remarks have also intensified the cross-strait debate. Earlier, Terry Gou boasted that he was giving the mainland a “free meal,” which caused dissatisfaction among mainland netizens. He recently stated, “If there is a war between the two sides of the strait, I will use private planes to convert into military aircraft and deliver supplies to the front lines.” On the 22nd, China Times reported that when asked by foreign journalists how he would face pressure from mainland sanctions if elected, Terry Gou claimed that if “the mainland threatens and doesn’t listen, they will confiscate Hon Hai’s assets,” he would say “yes, please go ahead.” This statement caused Hon Hai’s stock price to plummet on the following day.
Taiwanese online media “The Storm Media” reported on the 22nd that the mainland has now taken action to investigate Foxconn. The timing of this move, just before Terry Gou submitted a joint petition at the end of October, is probably aimed at giving him “more room for maneuver” in his candidacy through Foxconn.
Multiple Countries Express Opposition to “Taiwan independence”
According to Taiwan’s United Daily News on the 22nd, the third Belt and Road Initiative International Cooperation Summit Forum concluded. During the forum, Chinese leaders held talks and meetings with several foreign leaders in attendance. Various news releases or joint statements were also issued. The report stated that these news releases or joint statements all declared their opposition to “Taiwan independence,” support for “one country, two systems,” and support for mainland China’s stance on “peaceful reunification” with Taiwan. According to preliminary statistics from the newspaper, about 20 countries expressed their support for Beijing’s position on Taiwan during multiple meetings held from the 16th to the 20th of this month.
At the same time, the United States and Europe also expressed their non-support for “Taiwan independence”. According to Taiwan’s “Want Daily” on the 22nd, Josep Borrell, High Representative of the European Union for Foreign Affairs and Security Policy, recently visited mainland China. On the 21st, he posted on social media that the European side understands the importance of Taiwan issue to China and that EU’s One-China policy remains unchanged. He also directly stated that “Taiwan should not unilaterally declare independence.” Previously, Laura Rosenberger, Chairman of American Institute in Taiwan (AIT), publicly stated in Taiwan that they are against any unilateral changes to current situation including supporting Taiwanese independence.
On the 21st, Kuomintang candidate Hou Yu-ih held his third large-scale rally in Taoyuan. During his speech, he emphasized that Taiwan is on the brink of war and stated, “We cannot allow pro-Taiwan independence workers to be elected.” Previously, Hou Yu-ih had referred to Lai Ching-te as a self-proclaimed “pragmatic worker for Taiwan independence,” which he considered a serious provocation. He said that Taiwan independence poses the highest risk of war and that his candidacy aims for cross-strait peace. He stressed the importance of cross-strait policies and made it clear that “Taiwan independence will lead to war’ while expressing his opposition to it.”
Kuomintang Taipei City Councilor Lin Xinger stated in an interview with Hong Kong’s China Review News on the 21st that Rosenborg and others openly expressing “not supporting Taiwan independence” is clearly a slap in the face to Lai Ching-te, who has always advocated for “Taiwan independence”. She said that the people of Taiwan want peace across the strait and do not want war caused by “Taiwan independence”, so they hope for cooperation among opposition parties and for the Democratic Progressive Party to step down.
Zhang Wensheng stated that the tension in cross-strait relations and the emergence of “political opposition” are directly related to the current escalating “atmosphere of opposition,” especially due to the Democratic Progressive Party’s pursuit of Taiwan independence. Most people on the island can see this clearly, as they hope for peace and communication between both sides of the strait. In fact, they should also understand that mainland China’s series of actions are targeted responses. Particularly, if Lai Ching-te is elected as leader of Taiwan region, continuing Tsai Ing-wen’s path towards Taiwan independence would be highly detrimental to the peaceful and stable cross-strait relations – something that Taiwanese people do not want to see.