How Apple Tied Itself to China ⇥ ft.com

Patrick McGee, Financial Times:

The supply chain ranking turned out to be an early indication of a profound shift in operations at Apple, which held the No.1 spot for the next seven years. In that time it became the world’s most valuable company, while placing itself at the centre of geopolitical tensions.

O’Marah began to learn that Apple was not really “outsourcing” production to China, as commonly understood. Instead, he realised that Apple was starting to build up a supply and manufacturing operation of such complexity, depth and cost that the company’s fortunes have become tied to China in a way that cannot easily be unwound.

McGee in a companion article about the difficulties Apple is facing in its attempts to extricate itself:

Apple’s dilemma on China is over two decades in the making, going to the foundation of its global success. For Cook, it’s personal. The operations guru was the architect of Apple’s China-oriented supply chain strategy, earning a reputation for obsessing over details that transformed its end-to-end management into the envy of the tech world.

[…]

China, according to some estimates, has more factory workers than Vietnam has people. The number of rural migrant workers in the country was 293mn in 2021, according to China’s National Bureau of Statistics, versus an entire population of 100mn in Vietnam.

Jenny Chan, co-author of Dying for an iPhone, which details the lives of Foxconn workers who assemble Apple products, points out that China’s labour infrastructure is uniquely supported by the state. At times it is all but mandatory, she says, with villagers and students bussed in to lend hands.

Allow me to embarrass myself for a paragraph. It is important for everyone to have a dream podcast project in their back pocket, right? That is a normal thing to think about, right? Anyway, mine was ambitiously something like “Parts Unknown” but for technology. I wanted deeply researched longform stories about the complex iteractions of computers and society. I will never make it.

But the reason I wanted to do that kind of a show is for this very pair of articles to exist. Lots has been written about Apple and its supply chain, yet precious little to this extent and with this contemporary framing. It is a thorny subject that often puts Tim Cook at its centre. The treatment of workers in China is often abhorrent; Apple often distances itself from those labour conditions by stressing the third-party nature of its manufacturing contracts despite working hand-in-glove with them. For twenty years, this has been among the most shameful aspects of Apple’s business.

Even if Apple’s management was not embarrassed by its frequent deference to government in an attempt at diplomacy — and it should be — it seems ashamed of its difficulty in a shortage of some iPhone models in its most important quarter. I wish it felt more like the former was the reason for rumours about its attempts to find manufacturing bases elsewhere, but I am afraid it is the latter.