APPLE IN CHINA: The Capture of the World’s Greatest Company, by Patrick McGee
A little more than a decade ago, foreign journalists living in Beijing, including myself, met for a long chat with a top Chinese diplomat. Those were different days, when high-ranking Chinese officials were still meeting with members of the Western press corps. The diplomat whom we met was charming, funny, fluent in English. She also had the latest iPhone in front of her on the table.
I noticed the Apple gadget because at the time, Chinese state news media were unleashing invectives on the Cupertino, Calif.-based company for supposedly cheating Chinese consumers. (It wasn’t true.) There were rumors circulating that Chinese government officials were being told not to flaunt American status symbols. The diplomat’s accouterment proved that wrong.
At the time, one could make the argument that China’s economic modernization was being accompanied by a parallel, if somewhat more laggardly, political reform. But the advent in 2012 of Xi Jinping, the Chinese leader who has consolidated power and re-established the primacy of the Chinese Communist Party, has shattered those hopes. And, as Patrick McGee makes devastatingly clear in his smart and comprehensive “Apple in China,” the American company’s decision under Tim Cook, the current C.E.O., to manufacture about 90 percent of its products in China has created an existential vulnerability not just for Apple, but for the United States — nurturing the conditions for Chinese technology to outpace American innovation.
McGee, who was the lead Apple reporter for The Financial Times and previously covered Asian markets from Hong Kong, takes what we instinctively know — “how Apple used China as a base from which to become the world’s most valuable company, and in doing so, bound its future inextricably to a ruthless authoritarian state” — and comes up with a startling conclusion, backed by meticulous reporting: “that China wouldn’t be China today without Apple.”
Apple says that it has trained more than 28 million workers in China since 2008, which McGee notes is larger than the entire labor force of California. The company’s annual investment in China — not even counting the value of hardware, “which would more than double the figure,” McGee writes — exceeds the total amount the Biden administration dedicated for a “once-in-a-generation” initiative to boost American computer chip production.
“This rapid consolidation reflects a transfer of technology and know-how so consequential,” McGee writes, “as to constitute a geopolitical event, like the fall of the Berlin Wall.”
McGee has a journalist’s knack for developing scenes with a few curated details, and he organizes his narrative chronologically, starting with Apple’s origins as a renegade upstart under Steve Jobs in the 1970s and ’80s. After Jobs’s firing and rehiring comes a corporate mind shift in which a vertically integrated firm falls for the allure of contract manufacturing, sending its engineers abroad to train low-paid workers in how to churn out ever more complicated electronics.
We only really get to Apple in China about 90 pages into the book, and that China, in the mid- to late 1990s, was mainly attractive because of what one China scholar called “low wages, low welfare and low human rights.” McGee relates how one Apple engineer, visiting suppliers in the southern Chinese manufacturing center of Shenzhen, was horrified that there were no elevators in the “slapdash” facility, and that the stairs were built with troubling irregularity: with, say, 12 steps (of varying heights) between the first and second floors, then 18 to the next, then 16, then 24.
But China at the turn of the millennium was in the process of joining the World Trade Organization, and its leaders were banking on an export-led economy that would learn from foreign investors. Starting in the 2000s the Taiwanese mega-supplier Foxconn constructed entire settlements for Chinese workers building Apple electronics. First up on the new assembly lines were iMacs that were produced by what became known as “China speed.”
Less than 15 years after Chinese workers began making Apple products en masse, Chinese consumers were buying them en masse, too. Covering China at the time, I chafed at the popular narrative that reduced Apple’s presence in China to a tale of downtrodden workers at Foxconn and other suppliers. Yes, there were nets outside factory dorms to prevent suicides; and wages remained low. Even Apple admitted to alarming labor abuses in its Chinese supply chain.
But that was only half the story. The iPhone in China signified success, an individualistic, American-accented flavor that seemed to delight both veteran diplomats and Foxconn workers I got to know in southwest China. Those of us who had lived in China for years could see that life was getting freer and richer for most Chinese. By the mid-2010s, it was the United States that seemed behind in terms of integrating apps into daily life. In China, at least in the big cities, we were already living in the tech future.
Yet there were episodes of unease. After Xi came to power, state media campaigns targeted Apple’s Western “arrogance.” Apple acquiesced to Beijing’s demands that it remove the New York Times app from its online store in China and keep Chinese user data in China rather than the United States, prompting worries about government intrusion. As Xi cracked down on labor rights activism, more independent audits of the Apple supply chain ceased.
In 2015, Apple was the largest corporate investor in China, to the tune of about $55 billion a year, according to internal documents McGee obtained for this book. (Cook himself told the Chinese media that the company had created nearly five million jobs there: “I’m not sure there are too many companies, domestic or foreign, who can say that.”) At the same time, Xi laid out “Made in China 2025,” his blueprint for achieving technological self-sufficiency in the next decade, dependent on Apple being what McGee calls “a mass enabler of ‘Indigenous innovation.’”
“As Apple taught the supply chain how to perfect multi-touch glass and make the thousand components within the iPhone,” he writes, “Apple’s suppliers took what they knew and offered it to homegrown companies led by Huawei, Xiaomi, Vivo and Oppo.” Today, some of these premium products come with specs that are increasingly ahead of American design, and have outsold Apple in many major markets.
Sometimes, McGee is too comprehensive. He draws interesting portraits of characters who disappear after a few paragraphs. We do not need to know the full name of the law firm that Apple hired in preparation for a possible bankruptcy in the mid-1990s or even the minutiae of pre-China personnel wrangles, especially when centuries of Chinese history are compressed to less than a page. There are a few Chinese misspellings and miscues — the surname Wang is not, in fact, pronounced quite as “Wong.” And it would have been nice to have gotten more perspectives of Chinese people.
But these are quibbles with an otherwise persuasive exposé of the trillion-dollar company’s uncomfortably close relationship with the global power. China may have enabled Apple to become one of the most profitable companies in the world, but the exploitation goes both ways: This is not just a story of China making Apple, but of Apple making China. Given Xi’s authoritarian hold on power, what began as a feat of manufacturing has troubling consequences for the entire world.
APPLE IN CHINA: The Capture of the World’s Greatest Company | By Patrick McGee | Scribner | 437 pp. | $32
Hannah Beech is a Times reporter based in Bangkok who has been covering Asia for more than 25 years. She focuses on in-depth and investigative stories.
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