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Trade war

Foxconn boss 'not afraid' of shutting down factories in China

Presidential hopeful won't meet Chinese leader until Beijing acknowledges Taiwan's existence

Foxconn Chairman Terry Gou, speaks to the press on May 6 after his trip to the U.S. (Photo by Cheng Ting-fang)

TAIPEI -- Chairman of major Apple supplier, Foxconn Technology Group, Terry Gou on May 6 said he would shut down factories in China and move them elsewhere if Beijing threatens his company’s manufacturing facilities there if he is elected Taiwanese president.   

“If Beijing later threatens to close down my factories after I become Taiwanese president, and says I can't talk to them as a peer in a respectful way … I will tell them to just give me a couple of months and I will move my production sites to more competitive places in the world,” said Gou at a press conference in Taipei. Gou announced plans mid-April to run as a candidate for Kuomintang, the opposition party, in presidential elections next year.  

It was the first time that Gou publicly rejected criticism that his deep manufacturing ties in China might compromise Taiwan's independence as Beijing could threaten to close down Foxconn’s plants there. Gou’s Foxconn, formally traded as Hon Hai Precision Industry, is the world’s biggest electronics manufacturer and key iPhone assembler. Crucially for China, it is also one of its top exporters.

Gou's remarks followed U.S. President Donald Trump's bombshell on May 5 that he planned to hike import tariffs to 25% on $200 billion worth of Chinese products from May 10. He also threatened to impose 25% additional tariffs on the rest of the $325 billion of Chinese goods that had not been taxed in the near future, denting hopes of improving trade relations between the superpowers.  

Gou said that those trade negotiations have not collapsed. “President Trump’s move [on tariff hike] on Sunday is really a bombshell to the trade talks but it does not necessarily mean the collapse of the negotiations,” said Gou. “The trade war might somehow end but the [tech] competition between the two strong powers will continue … China is likely to open up its market in a massive way while the U.S. will definitely build its own supply chain.”

Gou said on April 30 that he expected the trade conflict between Washington and Beijing to evolve into a technology battle especially in key areas such as fifth-generation technologies, semiconductors, artificial intelligence and supercomputers.  

He said on May 6 that Beijing would not “target a single company and force it to close down factories.” He pointed to the fact that the Chinese economy faces a lot of challenges and will need foreign investment, including from Taiwan, to support growth.

Gou met with Trump on May 1 and reassured the president that his company’s display project in Wisconsin remained on track. He pointed to the significance of this visit, saying he was the first Taiwanese presidential hopeful to walk into the White House since Washington severed diplomatic ties with the island decades ago.

“I will do everything I can to help Taiwan make breakthroughs,” Gou said.

When asked if he planned to meet Chinese President Xi Jinping, Gou said: “Let me answer your question seriously. There will no Xi-Gou meeting. I won’t even go to Beijing’s liaison offices [in Hong Kong, Macau].”

Gou said he would seek an opportunity to talk with Xi as an equal if he is elected as Taiwanese president. “I won’t do a Xi-Gou meeting until I get the answer from them as to whether they [China] acknowledge the existence of the Republic of China [Taiwan’s formal name].”

Foxconn Chairman Terry Gou shows off a note to him from U.S. President Donald Trump after their meeting earlier in the month. 

Gou would not confirm if he stood by the “1992 consensus,” which refers to Taiwan and China as being "One China," saying that he will publicize his stance on the topic later. The 1992 consensus is widely embraced by KMT politicians who had been keen to build a close working relationship with Beijing, but dismissed by the ruling pro-independence Democratic Progressive Party and the administration of President Tsai Ing-wen.

Foxconn is set to hold a board meeting on May 10 to pick new directors as Gou plans to resign from his post as chairman if he enters politics. 

Gou would not be drawn on his succession plan. “Whoever is on the nomination list will have the chance to become the new chairman,” Gou said.

The possible candidates are: Foxconn de facto Chief Financial Officer Huang Chiu-lien, Chairman of Foxconn's telecom arm, Asia Pacific Telecom, Lu Fang-ming, Sharp Chairman and CEO Tai Jeng-wu, and Foxconn Industrial Internet President Brand Cheng.

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