Perhaps Chinese government doesn't really mind? Apple products are very high value so they create big trade surplus problem for China with limited benefits to the Chinese economy. I doubt it takes much longer to assemble a iPhone compared to a cheaper phone. Apple just use more expensive components. So from an employment per export dollar perspective it's probably better to assemble cheaper phones than expensive phones. As long as Apple is committed to use more Chinese components (like BOE OLED screens or even Yangtze memory chips) China likely wouldn't mind it moving final production out of China.
Chinese Economics Thread
- Thread starter Norfolk
- Start date
Perhaps Chinese government doesn't really mind? Apple products are very high value so they create big trade surplus problem for China with limited benefits to the Chinese economy. I doubt it takes much longer to assemble a iPhone compared to a cheaper phone. Apple just use more expensive components. So from an employment per export dollar perspective it's probably better to assemble cheaper phones than expensive phones. As long as Apple is committed to use more Chinese components (like BOE OLED screens or even Yangtze memory chips) China likely wouldn't mind it moving final production out of China.
Thats the thing though. When production is moved out, foreign component makers will also eventually rise and replace China's.
Not necessarily. Apple uses a lot of Korean and Japanese components despite not assembling there.
AssassinsMace
Lieutenant General
The suicide slavery jobs are of the sudden great jobs where China has to bend over backward for US demands so that they control China in order to keep those suicide jobs... All this bull just to convince China to surrender to the US because in the US they think slavery was the best thing to ever happen to Africans so therefore Chinese being slaves to them will be the best thing to ever happen to Chinese therefore it's okay to enslave the world and all those that have already bent the knee will now be above the Chinese because that's what's it really about. China not bending the knee is already above those that do that's why all these haters of Chinese and their fake concern are so bent on getting China to surrender. They will never amount to anything themselves hence why they can't climb and only can push people down to be higher.
D
Deleted member 15887
Guest
You're not wrong about component makers, but your premise about assemblers moving out is wrong, as I've yet to seen any measurable shift in production in the numbers. At least for Apple/Foxconn, they have been clamoring to reduce production in China since 2007; almost all attempts have failed. Numbers don't lie:
You might be fooled into thinking they are leaving China if all you read in news reports is the new plants being constructed outside China, neglecting the simultaneous production expansion within China that dwarfs anything in India or Vietnam. And the first graph refers to just assembly; the one you have been complaining about.
puts this well:
From another source, MarcoPolo's :
Considering how Apple began trying to diversify as early as 2007 from China, you would have expected them to make some measurable progress. Or even during the trade war of the past 2 years, yet they've been doing the opposite of "diversifying from China". Because even as they may announce flashy new factories in Brazil, or Vietnam, or India, they're simultaneously opening much more new factories in China at the same time.
That's not to mention the supply chain troubles in other countries which have previously led to Apple backing off from diversification. For example, Brazil saw its plants closed despite Apple/Foxconn pledging to invest $12 billion and 100000 jobs into the country in 2011. Apple/Foxconn also tried, and failed, to set up production bases in . Vietnam investment might actually work this time as its infrastructure improves, but as it sits right next to China, it can benefit from depending on their comprehensive supply chain, and neither is the country nearly large enough to meaningfully replace Chinese capacity.
In 2015, Foxconn, Apple's main supplier, that India would have 12 plants and 1 million Indian workers by this year, as well as a to create 50,000 jobs in Maharashtra back in 2015. Both of these did not live up to their hype. From the MarcoPolo article, Apple added 34 new supplier bases in China between just 2017 and 2019, and reduced 3 from "other countries" (which includes India). While in India, Foxconn is nowhere even close to having 1 million workers in India, their $5 billion plant they had promised the Maharastra gov't back in 2015 in early 2020. They came back with a far more paltry $1-billion investment to expand an existing plant and create just 6000 jobs, which was hyped up by Indian media a few months ago with great fanfare (for context, Foxconn still employs somewhere around 1.3 million workers in China, despite spending more than a decade of trying, and failing, to diversify away from it). Meanwhile, Foxconn continues to build its most advanced factories in China, 10 "lighthouse factories" (fully automated factories, eliminating the need for low-wage workers) in the country in 2020, and constructing another 10 this year.
Also, when you move production out of China, don't be surprised when you're outcompeted on cost and scale, and pushed out of business: . Interestingly, Panasonic based its production out of Malaysia, but nevertheless they couldn't compete. If Foxconn tries to leave, fine; more industrial capacity for Luxshare to outcompete and kill Foxconn on.
China isn't harsh on Apple because Apple is so involved in China. Guess what? China makes money from Apple's success. If that is to change dramatically, there might be more incentive to "tax" Apple in ways that aren't being done now.
China isn't helping Apple decouple from China, quite the opposite if anything. Apple isn't really decoupling at all if one looks at the stats. At most, Apple is diversifying but still pays off China handsomely with a lot of production and sourcing from Chinese companies. For example their displays are sourced from a Chinese developer/manufacturer and most units along with most components are made in China entirely.
There is no sense to make moves on Apple while things aren't going badly and they're not responsible for anything other than trying to diversify just a little from China. If the CCP is to seriously do harm to Apple or prevent Chinese consumers from buying their products, that will look pretty bad. China doesn't have the goodwill power of the US and can't do what the western leagues have done to Huawei. At least not in the same fashion.
China isn't helping Apple decouple from China, quite the opposite if anything. Apple isn't really decoupling at all if one looks at the stats. At most, Apple is diversifying but still pays off China handsomely with a lot of production and sourcing from Chinese companies. For example their displays are sourced from a Chinese developer/manufacturer and most units along with most components are made in China entirely.
There is no sense to make moves on Apple while things aren't going badly and they're not responsible for anything other than trying to diversify just a little from China. If the CCP is to seriously do harm to Apple or prevent Chinese consumers from buying their products, that will look pretty bad. China doesn't have the goodwill power of the US and can't do what the western leagues have done to Huawei. At least not in the same fashion.
The sheer manufacturing advantage of China today is such that American investment that seek a healthy return will have no alternative other than to utilise China's supply chain while also enjoy huge margin by gaining access to the Chinese market. Which is why the US is in so much pain today, as shown by the frantic attempt by Trump admin trying the whack-a-mole approach to scare China into an unequally treaty.
Many of people have this misunderstanding that the China of today is like Japan in 1970-80s, whereby American goods from GE, Westinghouse PK with Japanese goods SONY and Toshiba. No ! If that is the case, China will be hit badly by the 2018 trade tariffs.
Today, we are seeing American and Chinese capitals coming together from top, realised into actual products by Chinese manufacturing and then sold to the global market thus generating profit. At least 2 aspects of this chain are totally in Chinese control ; the manufacturing supply chain, 2nd : the market for current future growth. Which is why Vanguard, GM, Tesla, Blackrock, Walmart, Starbucks are throwing money like crazy into China. This is the reality.
I think the CCP should slap a massive import duty on Apple products as a counter to the sanctions on Chinese manufacturers like Huawei and Xiaomi. That's the least they could do.
I doubt those Apple related jobs in China make that much money for the Chinese economy. There's massive margins on those products. Last I heard the assembly cost was like $2 USD per phone.
I doubt those Apple related jobs in China make that much money for the Chinese economy. There's massive margins on those products. Last I heard the assembly cost was like $2 USD per phone.
Nah the margins are getting bigger now. There's also lots of small components probably also made in China including the chassis.
BOE is making the screens now:
@hullopilllw
Ron Vara idea had backfired big time, the American assume that the Chinese think like them, that they need to act aggressively and Xi will comply just like HITLER told his generals ''We have only to kick in the door and the whole rotten structure will come crashing down,''. Then China did the opposite inviting the US captains of industries more. An idea straight from Sun Tzu philosophy. Here I will leave a post from PEPE ESCOBAR why China sent its public official to the US to study economics and MR Xi is one of them:
Pepe: Exactly, because of what they study at Beijing University, Renmin or Tsinghua
is not exactly what they would study in big American universities. Probably what they study in the U.S. is what not to do in China. When they go back to China, what they won’t be doing. It’s an object lesson for what to avoid.
Well said PEPE well said..
know the enemy and know yourself.
Last edited: