Some time ago, Foxconn was investigated for fabricating a false tax basis and was finally fined 20,000 yuan. Such a punishment can be said to be not severe for a huge company like Foxconn. After the investigation storm ended, the two sides reached a seemingly satisfactory result, and Foxconn was lifted high and gently lowered. However, what is surprising is that just after the investigation was over, Guo Taiming announced a decision, but the outside world interpreted it as "grace will take revenge".
According to Foxconn's latest notice, the top management has decided to invest 11 billion yuan to build a new factory in India to increase iPhone production capacity in India. This means reducing production orders in Chinese mainland. Such a decision has sparked speculation about whether Mr. Gou is retaliating against Chinese mainland. However, from an objective point of view, standing at the current level of Foxconn, the momentary battle of sentiment is no longer important. Gou's decision to increase India's weight is more out of cost reduction considerations. After all, the labor cost in Chinese mainland has been **, and in comparison, India is more cost-effective. For a company like Foxconn, which is mainly engaged in OEM orders, the profit is not high, so it needs to seek development in places with lower labor costs to maximize benefits. Of course, there may be a number of other factors in Gou's decision. In previous years, Foxconn encountered some unpleasant things in Chinese mainland, which also made Gou Taiming dissatisfied with the situation here. In addition, Foxconn has accelerated the speed of transferring the mainland industrial chain this year, and the scale of Zhengzhou Foxconn Park has shrunk.
Terry Gou's decision to increase India's weight, in addition to cost reduction considerations, has a number of other reasons. First of all, India is an emerging market with huge potential. With the rise of India's middle class and the expansion of the consumer market, India has become a popular region for major companies to enter. Foxconn's increased investment in India is also aimed at seizing this market and expanding its influence there. Secondly, increasing the weight of India also means the diversification of Foxconn. Foxconn has always relied on big customers like Apple, especially for the OEM production of iPhones. However, there is a certain risk of over-reliance on one customer, and if there is a change in the relationship with the customer, it will have a significant impact on Foxconn. Therefore, by investing more in the Indian market, Foxconn can reduce its dependence on one customer and diversify its operations to reduce potential risks. In addition, increasing India also provides Foxconn with more room for development. As one of the most populous countries in the world, India has huge market potential. Foxconn will build a factory in India to increase production capacity, further expand market share, and achieve large-scale operation.
Foxconn's increased investment in the Indian market will undoubtedly reduce production orders in Chinese mainland and have a certain impact on China's economy. However, whether it is revenge or not, we must not dwell too much on it. China's economy is in a critical period of transformation and upgrading, and the adjustment and upgrading of the industrial structure is an inevitable process. The transfer of labor-intensive industries such as Foxconn is the norm in the market economy and the result of profit-driven. We should see that the rise and development of a country not only depends on the development of low-end industries, but also needs to cultivate a number of strong local technology companies. Only enterprises with core technology and independent intellectual property rights can be invincible in the fierce international competition. We can take the United States as an example, and one of the important reasons why it has become a world power is that it has strong local technology companies. Therefore, we should take Foxconn's decision to increase India's weight as a prompt to accelerate industrial upgrading, strengthen innovation capabilities, and cultivate local technology companies to achieve sustainable economic development.
After the Foxconn investigation came to an end, Terry Gou decided to increase India, which caused people's attention and discussion. However, we cannot just interpret it as "grace will take revenge". Foxconn's increased investment in India is mainly due to the consideration of reducing costs and expanding the market, and has nothing to do with the battle of emotions. Whether it is Foxconn's decision or the development of China's economy, we need to take a long-term perspective. We should actively promote industrial upgrading, improve the ability of independent innovation, and cultivate local technology companies to ensure sustainable economic development. Only in this way can we truly get out of the shackles of low-end industries, achieve leapfrog economic development, and let the people live a better life.