the Route


Why is China Provoking Foxconn?

As anyone who has visited Acapulco knows, it is picturesque, with the serene mountain scape overlooking the half-moon bay.

Pictures, as we also know, can be deceiving.

For the better part of the decade, the once-classic vacation spot has been overrun with drug gangs, and the former wave of tourists has diminished to a trickle. And that was before Hurricane Otis hit last month.

As 2023 draws near its end, we are reminded of how much uncertainty lies ahead. Whether man-made, like the regional conflicts in Europe, the Middle East, Africa and the Pacific Rim; or natural disasters, such as those experienced in Mexico, Turkey and the US, we seem awash in challenges and obstacles.

And then there are the completely self-inflicted wounds.

While we’ve been critics of Foxconn for some time, the recent “inspection” of some of its Chinese offices by domestic tax authorities almost certainly has less to do with corporate malfeasance than it does with Beijing’s attempt to influence the outcome of the upcoming Taiwanese presidential election.

A disclaimer: We can’t possibly know if Foxconn’s finances are on the up and up, and China has both the right and, we would argue, the responsibility to ensure companies operating in its territory are doing so in accordance with local laws. But the timing seems, well, more than coincidental.

Here’s why. Terry Gou, Foxconn’s founder and former chief executive, has twice made bids for the Taiwanese presidency. The Kuomintang party (KMT) he belongs to is known for wanting closer ties to the mainland. And while he has failed both times to gain sufficient traction among KMT voters, this time he is circumventing the nomination process by declaring an independent bid.

The rub, for Chinese leaders, is that such a move could split votes for the eventual KMT candidate, Hou Yu-ih, the mayor of New Taipei, thus paving the way for the Democratic Progressive Party (DPP) to retain control. And DDP’s candidate is seen as more pro-independence than his competitors for the office.

Through this lens, China’s raid on Foxconn is seen more as a power play against Gou, who remains Foxconn’s largest shareholder, with a net worth of more than $6 billion, to pressure him to withdraw from the race.

It’s an audacious move. Foxconn is China’s largest private employer, and Gou historically has advocated for closer relations with Beijing. He seems to be gambling that China won’t take the chance that Foxconn relocates some of its plants – and the 1.2 million workers it employs – from the mainland. At the same time, however, Foxconn has been hedging its bets, building up its presence in India as an alternative to China (and for real, this time, unlike the vaporware in US states like Wisconsin, Ohio and Pennsylvania, plus Brazil, Indonesia, Vietnam and others).

Like we said, wounds can be self-inflicted. China typically operates with a long-term strategy in mind. Preventing chaos is its hallmark. To jeopardize relations with its most important employer, and one of the most significant companies in the world, is nothing short of rash. Electronics manufacturers, take note: When locating facilities, what weight are you attaching to national stability? If China will threaten Foxconn, is any company there safe from (possibly) unwarranted governmental scrutiny?

PCEA news. Membership is a core benefit of PCEA. Membership offers networking and access to technical content, in written and webinar form. While many of our local chapters could use a hand with meeting logistics, we are planning a series of webinars starting next month to help fill the gap.

We are planning at least a half-dozen webinars in the coming months, with topics ranging from additive manufacturing to printed circuit material characterization, insulated metal substrates (IMS), component selection, and AI in electronics, to name a few. All webinars are free for PCEA members, and individual membership is also free, so there’s no reason to wait to join. Please check the PCEA website for details.

P.S. See us this month at Productronica (stand B3106) and PCB Carolina!

MIKE BUETOW is president of PCEA (;