China has called its probe into Foxconn Technology Group a routine police matter, in its first official comments on the inquiry into Apple Inc.’s most important partner.
“The probes into whether companies are abiding by laws are normal law-enforcement activities, and in line with laws and regulations,” said Zhu Fenglian, spokeswoman for the government department in Beijing that handles ties with Taiwan.
Still, Zhu hinted at the briefing on Wednesday that the inquiry may involve aspects beyond the business realm, saying that “while Taiwan businesses enjoy growth on the mainland, they should also assume corresponding social responsibilities and play a more active role in promoting peaceful development of cross-strait ties.”
China would “continue to support Taiwan businesses to invest and operate on the mainland,” she added.
Chinese state media said over the weekend that regulators are conducting tax audits and reviewing land use by Foxconn, the Taiwanese company that makes the vast majority of iPhones at factories in China.
Read: China Rattles Foreign Firms With New Arrests, Foxconn Probe
Hon Hai Precision Industry Co., Foxconn’s public arm, said it will collaborate with authorities. Shares of Hon Hai and its unit, Foxconn Industrial Internet Co., tumbled on the news, at one point losing about $9 billion in value.
China usually doesn’t explain the actions of its regulators, leaving companies with operations in the country guessing at the ultimate goals of the government, and there’s been speculation that the Foxconn probe is politically motivated.
Foxconn billionaire founder Terry Gou resigned from the company’s board last month as he campaigns to become president of Taiwan. Gou, who hasn’t had a public engagement since Monday, previously dismissed claims he would be susceptible to Chinese pressure, if he won January’s election. He trails the top three candidates in polls.
See: Terry Gou’s Presidential Ambition Costs Foxconn $9 Billion
China has pledged to bring Taiwan under its control eventually, by force if that’s what it takes. Cross-strait relations have been so frosty in recent years that the government of Chinese leader Xi Jinping has severed high-level communication with Taiwan President Tsai Ing-wen over her refusal to say that the democracy of 23 million people is part of China.
When responding to a separate question on Wednesday, Zhu said that Beijing is not intervening in Taiwan’s election, which will be held in January. Taiwan Vice President Lai Ching-te has been leading polls in the race to succeed Tsai, who must step down due to term limits.
More: Jack Ma, Terry Gou and the Price of China Jibes: Tech Daily
--With assistance from Debby Wu.
