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I think China has some extra leverage to deploy here: China can respond "We leave it. Oh, one more thing: our domestic market is off limits to you. Pray we don'

I think China has some extra leverage to deploy here: China can respond "We leave it. Oh, one more thing: our domestic market is off limits to you. Pray we don't alter the deal further by kicking your manufacturing out too."

mrweasel 6y ago
Kicking out Apple manufactoring won’t happen, because it’s actually dangerous to Chinese manufactoring. Apple is currently one of the only companies who could deal with being banned in China. It won’t be cheap or easy, but Apple could move manufactoring. They already have a deal with an Indian company who makes older iPhones for the indian market. Apple is also one of the few companies who can either absorb the additional cost or even pass it on to customers. But IF Apple was to move manufactoring it would set a dangerous precedence for other companies and potentially start a supply chain completely outside China.
- tumetab1 6y ago
  You're assuming the shareholders would support such decision. Keep in mind there's a legal mandate for public traded companies to increase share holders value. It's grey-ish legal requirement but I don't think the executive management wants to risk the legal consequences of doing the right thing. Edit: it's shareholders and not stakeholders that matter.
  - mrweasel 6y ago
    If Apple was kicked out of China, leaving them with no Chinese manufacturing... ? In that case the shareholders have no option, it's either that or sell no new devices. If you mean that the shareholders would rather please the Chinese government, rather than risk getting kicked out of China, then yes, I think Apple would go a long way to not piss off China.
  - mensetmanusman 6y ago
    You can make an argument that it increases shareholder value long term because if China increases human rights, it increases the shareholder value of the world in monetary terms because people will be better off.
  - lotsofpulp 6y ago
    > Keep in mind there's a legal mandate for public traded companies to increase share holders value. It's grey-ish legal requirement but I don't think the executive management wants to risk the legal consequences of doing the right thing. What are the legal consequences? I keep reading about these mysterious laws that require management to maximize shareholder value or profits or whatnot, but I’ve never heard of a court punishing management for not doing so (never mind the fact that it’s impossible to define and prove per legal standards).
- michaelt 6y ago
  > Kicking out Apple manufactoring won’t happen [...] it would set a dangerous precedence Ah, but if you don't care about setting a public example, you can punish them in more subtle ways. The traditional trick in corrupt countries is to have a bunch rules that aren't enforced and everyone breaks all the time - then if the leaders decide they don't like you they just start enforcing the rules on you. A corrupt regime would simply announce they were shocked - shocked! - to find parts of Apple's Chinese supply chain had low environmental standards.

mrweasel 6y ago

Kicking out Apple manufactoring won’t happen, because it’s actually dangerous to Chinese manufactoring. Apple is currently one of the only companies who could deal with being banned in China. It won’t be cheap or easy, but Apple could move manufactoring. They already have a deal with an Indian company who makes older iPhones for the indian market. Apple is also one of the few companies who can either absorb the additional cost or even pass it on to customers. But IF Apple was to move manufactoring it would set a dangerous precedence for other companies and potentially start a supply chain completely outside China.

tumetab1 6y ago
You're assuming the shareholders would support such decision. Keep in mind there's a legal mandate for public traded companies to increase share holders value. It's grey-ish legal requirement but I don't think the executive management wants to risk the legal consequences of doing the right thing. Edit: it's shareholders and not stakeholders that matter.
- mrweasel 6y ago
  If Apple was kicked out of China, leaving them with no Chinese manufacturing... ? In that case the shareholders have no option, it's either that or sell no new devices. If you mean that the shareholders would rather please the Chinese government, rather than risk getting kicked out of China, then yes, I think Apple would go a long way to not piss off China.
- mensetmanusman 6y ago
  You can make an argument that it increases shareholder value long term because if China increases human rights, it increases the shareholder value of the world in monetary terms because people will be better off.
- lotsofpulp 6y ago
  > Keep in mind there's a legal mandate for public traded companies to increase share holders value. It's grey-ish legal requirement but I don't think the executive management wants to risk the legal consequences of doing the right thing. What are the legal consequences? I keep reading about these mysterious laws that require management to maximize shareholder value or profits or whatnot, but I’ve never heard of a court punishing management for not doing so (never mind the fact that it’s impossible to define and prove per legal standards).
michaelt 6y ago
> Kicking out Apple manufactoring won’t happen [...] it would set a dangerous precedence Ah, but if you don't care about setting a public example, you can punish them in more subtle ways. The traditional trick in corrupt countries is to have a bunch rules that aren't enforced and everyone breaks all the time - then if the leaders decide they don't like you they just start enforcing the rules on you. A corrupt regime would simply announce they were shocked - shocked! - to find parts of Apple's Chinese supply chain had low environmental standards.