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Apple supplier Foxconn subjected to tax inspections by Chinese authorities

BANGKOK (AP) — Foxconn, a Fortune 500 company known globally for making Apple iPhones, was recently subjected to searches by Chinese tax authorities, according to local reports Sunday.

Foxconn, a Taiwanese -headquartered company officially registered as Hon Hai Precision Industry Co., Ltd, had its offices in Guangdong and Jiangsu provinces searched by tax officials, according to a report in the Chinese state-run Global Times newspaper.

The Ministry of Natural Resources also inspected Foxconn offices in Henan and Hubei provinces, where the company has major factories. Foxconn employs hundreds of thousands of workers across China.

The report did not provide more details about the searches, including when they occurred or what was found.

It also quoted an expert who said that “while Taiwan-funded enterprises, including Foxconn, are sharing in dividends from development and making remarkable progress in the mainland, they should also assume corresponding social responsibilities and play a positive role in promoting the peaceful development of cross-strait relations.”

Tensions have been high between China and Taiwan in recent years. China claims the democratic self-governing island of Taiwan as part of its own territory. The sides split in 1949 after a civil war and have no official relations but are linked by billions of dollars in trade and investment.

The Chinese Communist Party regularly flies fighter planes and bombers near Taiwan to enforce its stance that the island is obliged to unite with the mainland, by force if necessary.

The tensions have occasionally spilled over into the economic realm. In recent years, China has banned pineapples, grouper fish and other agricultural products from Taiwan for import.

However, it has largely refrained from targeting Taiwanese companies that operate on the mainland.

Foxconn does the vast majority of its manufacturing in China. The company said in a statement Sunday evening that it will “actively cooperate with the relevant units on the related work and operations.”

The company's founder, Terry Gou, announced in August that he would be running as a candidate in Taiwan's presidential elections, which will be held early next year. He then resigned from his seat on the board of Foxconn.

Gou is seen as a China-friendly candidate whose politics mostly align with the Kuomingtang, the island's current opposition party.

Huizhong Wu, The Associated Press