A groundbreaking investigation by Financial Times journalist Patrick McGee has uncovered the extensive role Apple played in China’s emergence as a global manufacturing powerhouse, detailed in his new book “Apple in China.” Through interviews with over 200 sources, McGee reveals how Apple not only benefited from Chinese manufacturing but was instrumental in creating the very capabilities it now depends on.
The scale of Apple’s involvement in China is staggering. Since 2008, the tech giant has trained 28 million Chinese workers – surpassing California’s entire labor force. By 2015, Apple’s annual investments in China reached $55 billion, dwarfing even the Marshall Plan’s nation-building efforts when adjusted for inflation. The Marshall Plan, which aided 16 countries’ post-war reconstruction, was only half the size of Apple’s yearly Chinese investments.
In conversation with The Free Press’s Bari Weiss, McGee explained that while China is currently the only nation capable of meeting Apple’s manufacturing needs in terms of technical expertise, cost efficiency, and scale, these capabilities weren’t inherent to China. Instead, Apple actively developed them by sending countless personnel to establish these competencies within the country.
The transformation was swift and comprehensive. In 1999, none of Apple’s products were manufactured in China. By 2009, virtually all production had shifted there – a change McGee likens in significance to the Berlin Wall’s fall. This shift was further cemented under Tim Cook’s leadership, notably through a confidential $275 billion agreement with Chinese officials in 2016, aimed at developing China’s economy and technological capabilities over five years.
The agreement, revealed by The Information in 2021, included commitments to establish new retail locations, research facilities, and renewable energy projects, while strengthening relationships with local suppliers like Foxconn and enhancing China’s supply chain infrastructure.
Today, approximately 155 million Americans own iPhones – a market penetration McGee argues would have been impossible without Apple’s substantial Chinese manufacturing base. However, recent geopolitical tensions have begun to shift this dynamic. Former President Donald Trump’s administration pushed for Apple to relocate manufacturing to American soil, primarily through tariff policies. Trump’s 2016 pledge to bring Apple’s production to the United States has partially influenced the company’s recent strategic decisions.
In response to these pressures, Apple has begun diversifying its manufacturing base. The company is transitioning production of U.S.-bound iPhones to India, while moving other products like iPads and Apple Watches to Vietnam. CEO Tim Cook has confirmed that by 2026, most iPhones sold in the American market will be manufactured in India.
The tech giant has also announced plans to invest over $500 billion in the United States over the next four years, focusing on domestic manufacturing capabilities and semiconductor production. This commitment represents a significant pivot in Apple’s manufacturing strategy, though the company’s extensive Chinese operations continue to play a crucial role in its global supply chain.
McGee’s research illuminates how Apple’s strategic decisions over the past quarter-century have not only transformed its own manufacturing capabilities but have fundamentally reshaped global supply chains and international economic relationships, particularly between the United States and China.