One of the largest employers and taxpayers in China, Foxconn has taken a concrete step forward to applying for an initial public offering in one of the largest capital markets in the world. Insiders are optimistic about it being listed on the Shanghai Stock Exchange in the foreseeable future.
Foxconn, also known as Hon Hai Precision Industry, is a multi-national manufacturing company headquartered in Taiwan but with factories throughout mainland China including its largest in Shenzhen where over 200,000 people are employed by the company.
The manufacturer is responsible for consumer products from some of the largest name brands in the world including Apple, Sony, Microsoft, Nintendo, and Amazon.
China has markedly strengthened its control and examination of IPO applications, even many capable applicants have been persuaded to quit or failed to pass the CSRC’s qualification checks.
That the securities regulator has given the green light to Foxconn’s prospectus shows decision-makers are laying considerable stress on manufacturing industries, as well as the fitness of Foxconn’s business.
It also speaks to Xi Jinping’s promise to liberalize the economy and encourage more FDI into the Chinese market.
The IPO is also a sign of the progress that the company has made since it faced pressure in 2010 when 11 assembly line workers committed suicide in different branches throughout China – drawing criticism that the company was running a sweatshop.
Chinese media heavily criticized the company and urged the government to weed out ‘lower-end’ industries and move up the value chain.
International watchdog Human Rights Watch highlighted workplace abuses at Foxconn as part of its call on the Chinese government to allow more freedom of expression so that unfair labour practices can stop.
Eight years on, Foxconn has not only survived, but also boomed. It has remained the main parts provider for major global brands in the fast-changing information technology and electronics industries over the years. The government has also established an auditing system in conjunction with the company to ensure improvements in the workplace environment.