Tim Cook Isn’t the Only One with a China Problem

Apple CEO Tim Cook has a China problem.

He’s not the only one…

Apple makes around 90% of iPhones in China. From a supply chain perspective, this is better than where Apple stood a few years ago when it made all its iPhones there. Then COVID hit along with China’s extended lockdowns and the harsh realization that the country was, at best, an unreliable supply chain partner.

Since then, Apple has moved some production to India, and it’s pulling suppliers like Taiwanese electronics manufacturer Foxconn there with it. It plans to make around a quarter of all iPhones in India within the next two to three years.

I’ve written here before about the push to decouple from China and reshore/friendshore production by US companies. But China is taking similar steps to decouple from the US.

Just look at its iPhone policy. An increasing number of Chinese state and state-affiliated agencies are barring workers from bringing iPhones and other foreign tech into their offices.

Is that really any different from US agencies barring TikTok on government phones?

Yes, I would argue it is. We’re talking about a Communist country. China’s government has an entirely different relationship with its citizens, with unspoken but very real rules they need to discern to stay out of the crosshairs.

One example is China’s social credit system, which aims to, among other nebulous goals, promote “state-sanctioned moral values.” Does owning an iPhone for personal use influence your standing with the CCP? I cannot say for sure, but if it doesn’t want you on an iPhone at work, it’s not hard to read between the lines.