FirstFT: iPhone maker Foxconn under investigation, says Chinese state media

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Good morning. China has launched an investigation into Apple iPhone maker Foxconn over tax and land use, Chinese state media has reported.

The Global Times, citing anonymous sources, said tax authorities inspected Foxconn’s sites in the provinces of Guangdong and Jiangsu and natural resources officials had inspected sites in Henan and Hubei. Foxconn, China’s largest private employer and exporter, said it would co-operate with the investigation.

The Global Times article quoted an expert saying “Taiwan-funded enterprises, including Foxconn . . . should also assume corresponding social responsibilities and play a positive role in promoting the peaceful development of cross-strait relations”.

Foxconn founder Terry Gou is running as an independent candidate in Taiwan’s presidential elections in January, a contest that will have a significant influence on Taiwan’s relationship with China and tensions in the Taiwan Strait.

Beijing has in the past targeted local subsidiaries of Taiwanese companies with regulatory probes and political pressure at sensitive or tense times. Here’s more on the investigation into Foxconn.

Israel-Hamas war updates:

• Washington’s warning: American troops in the Middle East face the risk of a “significant escalation” of attacks against them, US secretary of defence Lloyd Austin has warned. Austin said Washington was sending more air defences to the Middle East as the Israel-Hamas war threatens to broaden into a regional conflict.

• Benjamin Netanyahu won’t say sorry: Israel’s prime minister has conspicuously avoided shouldering blame for miscalculations that led to October 7 assault.

• Water shortage in Gaza: With most supplies cut off by the Israeli siege, securing water has become a huge challenge for Palestinian families.

• Israelis queue to buy guns: Firearms sales have surged among Jewish Israelis since the deadly October 7 attacks shattered the country’s sense of security.

Here’s what else I’m keeping tabs on today:

• EU meeting: When EU foreign ministers convene on Monday, Ukraine will not be the first item on the agenda for the first time since February 2022, displaced by the conflict between Israel and Hamas.

• China: Financial markets are closed for the Chung Yeung Festival.

Five more top stories

1. Beijing has launched a review of punitive tariffs that were placed on Australian wine in 2020 in the latest sign of thawing relations between the two countries. The move comes ahead of Prime Minister Anthony Albanese’s visit to China next month — the first by an Australian leader in seven years — following a period of tension between Beijing and Canberra.

2. Private equity firms are facing the worst year in a decade for exiting investments. Buyout firms generated $584bn from selling portfolio companies in the first nine months of the year, more than $100bn shy of what the industry raised during the same period last year. The figures underline the challenges confronting private equity firms amid warnings that a golden age for the buyout industry has ended.

3. Two female Iranian journalists have been found guilty of collaborating with the US and handed long prison sentences. Niloufar Hamedi and Elaheh Mohammadi covered the death of Mahsa Amini last year in police custody, which triggered months of protests against the regime. Ahmad Zeidabadi, a pro-reform analyst, said the claims made by conservative media about the two women’s US links had merited a warning at worst.

4. Pakistan’s former prime minister Nawaz Sharif has returned from exile in a bid to regain power. Sharif hopes to unite the opposition to his jailed rival Imran Khan ahead of elections which are expected early next year. But analysts said his bid for power faced major challenges, notably the fallout from a fragile economy. Farhan Bokhari reports from Islamabad on Sharif’s return.

5. Switzerland’s rightwing populists were set to achieve one of their strongest performances in parliamentary elections on Sunday. The hardline conservative Swiss Peoples’ party was projected to secure 29.1 per cent of the vote in elections to the National Council, the lower house of parliament, as voters abandoned green politics amid fears over immigration and rising energy costs.

The Big Read

For Xi Jinping, last week’s forum to celebrate the 10th anniversary of his Belt and Road Initiative was a chance to further embed China’s influence across the developing world. Yet over the course of a decade, critics have questioned whether China’s $1tn initiative to finance and build infrastructure in mostly poorer countries has been worth the tremendous cost and whether it can continue to operate as it has in years to come.

We’re also reading . . . 

• Expenses fraud: The Citi sandwich case shows why some rule-benders get a lot more sympathy than others, writes Pilita Clark.

• Opinion: Tom Fletcher, former UK Ambassador to Lebanon, highlights four challenges for diplomacy on Israel and Gaza.

• Tesla’s Cybertruck: The hotly anticipated vehicle is a “nightmare” to make, but when it arrives will take Tesla into the most lucrative part of the North American car market.

Chart of the day

US investment groups are urging the Biden administration to refine proposed limits on investment in China, arguing that the curbs put them at a disadvantage. The lobbying effort comes as foreign investment in China has dipped to its lowest level in the last decade as investors are unnerved by the country’s crackdown on tech and an increasing tensions between Beijing and Washington.

Take a break from the news

High up in the mountains of India’s eastern Nagaland, one small village is giving up its hunting traditions to focus on conservation. “You can’t lecture people,” says local conservationist Nuklu Phom. “But climate change is drying up our wells and causing our crops to fail, so people listened to my message.”