Paul O’Connor has long been a fan of Apple computers and other products, but a book about how Apple is in thrall to China has given him much to consider.
Reviewed by Paul T. O’Connor
APPLE IN CHINA: The Capture of the World’s Greatest Company. By Patrick McGee. Scribner. 448 pages. $32. Also in audiobook by Simon & Schuster Audio. 13 hours, 22 minutes. Read by Fred Sanders.
Thirty-seven years ago, I bought my first Mac for two reasons: It was easy to use, and Apple was the coolest company, the anti-IBM.
Today, according to Patrick McGee in Apple in China, Apple has been captured by one of the world’s least cool people, Chinese autocrat Xi Jin Ping.
McGee, in exhaustive detail, chronicles how Apple first turned to foreign manufacturers in Taiwan and Korea but slowly, and then dramatically, became infatuated with what China could offer: Not only cheap labor but also quality, speed and efficiency. In time, Chinese manufacturing interests could provide a partnership with Apple that the company could not achieve anywhere else.
In the early years of the marriage, Apple profited greatly. By constantly working one Chinese supplier against another, one manufacturer against a world of competitors, Apple secured merchandise that was top quality, cutting edge and very favorable to the bottom line.
But then one day in 2013, Xi decided to change the arrangement. With the hook firmly set, he started to reel in his Apple, a catch that was heavily dependent on these manufacturers and on the Chinese consumer market. To this day, Apple is still writhing in his net.
In Apple’s run-up to this day, it had invested generously in China. The Apple model involved sending its own engineers to China to train workers and managers to its very high standards. By hosting Apple, China was not only getting millions of jobs, it was getting its workforce trained by some of the world’s best computer engineers.
Apple knew that it was helping to build a Chinese workforce with which it would also have to compete. In the plants owned by its Chinese suppliers and assemblers, it trained workers who acquired strong skills and resumes, then left the company for better pay and working conditions with other companies, some China-owned. But the company was making money in unimaginable sums, its stock price was rising rapidly, and it did not face any of the labor issues that faced companies in democracies, such as pesky unions.
Possibly the most astounding detail of this story is that Apple, maybe the richest company in the world, did not have a political strategy for dealing with China in 2013 or with Donald Trump in 2017.
Apple began to bow to Xi in very uncool ways. If Beijing didn’t like an app, lsuch as The New York Times, then Apple would not offer it in its Chinese App Store. Beijing didn’t like virtual private networks, and how they allowed their citizens to get around domestic censorship, so Apple removed them from Chinese iPhones. Apple didn’t even wait for China to complain about any content in the Apple TV+ streaming service; it banned any anti-China content despite not offering the service in China.
Today Apple sees its predicament and is trying to find alternative venues, but China owns much of the world’s manufacturing for the components Apple needs. Even if it moves some operations to India and Vietnam, it is still dependent on China, and therefore on Xi.
It’s a fine mess that Apple finds itself in, one from which it is unlikely to extract itself for a long time, if ever, McGee writes.
I listened to the audiobook narrated by the excellent Fred Sanders, and the other guys in my Monday morning coffee group say they wish they had done so, too. In text, Bill said, the book can bog down in its detail. When that happens in the audio version, I’m usually on the treadmill daydreaming anyway.