Apple Risks Getting Caught in Taiwan Tensions With iPhone Supplier Probes

livemint.com:

For decades, Apple has navigated an escalating series of challenges in China, from fake stores and factory protests to tightening censorship and app rules. Now, the iPhone maker risks getting dragged into the most volatile issue in U.S.-China relations: the future of Taiwan. On Sunday, Taiwanese contract manufacturer Foxconn Technology—one of Apple’s largest suppliers—said it is cooperating with Chinese authorities after state media reported China had opened tax and land-use probes into the company.

The investigations come as Foxconn’s billionaire founder Terry Gou pursues a bid for the Taiwan presidency. The probes, announced days after Apple Chief Executive Tim Cook was in China, open the possibility of a new category of geopolitical risk for Apple in the country. “Foxconn is a key part of Apple’s supply chain in China," said Kenneth Jarrett, senior adviser for corporate advisory firm Albright Stonebridge.

“Anything that jeopardizes Foxconn’s standing in China, even if it has nothing to do with Apple, becomes a headache." Cook met with China’s senior party and state leaders last week as part of his second visit this year. He also toured a non-Foxconn factory making the Apple Watch in eastern China and dropped by Apple stores, emphasizing the importance of the country both as a market and a manufacturing hub. In a meeting with Cook, Chinese Vice Premier Ding Xuexiang promised that China would offer more opportunities and a better environment for foreign companies to develop in the country.