Chinese state media announced that Foxconn, the Taiwanese company that is China's number one employer and the builder of a majority of Apple's iPhones, was being investigated by various Chinese authorities.
Chinese mainland tax authorities have conducted tax inspections on key enterprises of Foxconn in Guangdong and Jiangsu provinces, among other places, in accordance with the law, and the natural resources department has also conducted on-site investigations into the land use of key enterprises of Foxconn in Henan and Hubei provinces, the Global Times has learned exclusively from sources on Sunday.
"This is a shot across the bow - a message to Foxconn but also to Foxconn's customers, alerting them that if relations between China and the U.S. get worse, these companies could incur costs," said Chris Miller, associate professor of international history at Tufts University and author of "Chip War.".
We're still not done because these investigations also send a clear message to both Apple and Foxconn itself.
The company, which derived 70% of its revenue from China as of March, is moving production abroad to address pressure from global clients who want to de-risk from China.
Both Apple and Foxconn are clearly aware of the danger and are trying to move their operations out of China as quickly as possible.
India will continue to rise as an iPhone production base in the coming years while Foxconn's production of the Apple smartphone in China could shrink significantly, according to a research report.
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