6 ms·

How Apple conquered China and learned to think like the Communist Party.

50 points by jibjab 15y ago

martythemaniak 15y ago
I think it's unfortunate that Apple chooses to not build it's hardware in the US, or model its manufacturing on Germany's successful mid-size firms. Apple makes and builds high-end products and has the fat margins that goes along with it - instead of outsourcing all manufacturing to China, it could choose to build everything in the US, employ the locals and use that as a selling point. If I pay premium dollar for quality and durability, I would rather that support local manufacturing and local economies, than have that sitting in Apple's vaults. In the end, this is not unlike the the local food movement - people would rather pay extra and support local farmers and economies.
- bbgm 15y ago
  I want quality products at a reasonable cost. If Apple can maintain that quality with Chinese manufacturing, then all power to them.
- Steko 15y ago
  Right, let's blame Apple for the decline in American manufacturing. Now combine that with this article and people like Mike Daisey's views that Apple is somehow uniquely responsible to blame for the plight of blue collar workers in China. Apparently Apple is the cause of all pain in the world. Sheesh I thought they just sold electronics.
- olalonde 15y ago
  > Apple makes and builds high-end products and has the fat margins that goes along with it - instead of outsourcing all manufacturing to China, it could choose to build everything in the US, employ the locals and use that as a selling point. Why do you assume Americans are more deserving of Apple's manufacturing jobs than the Chinese? > If I pay premium dollar for quality and durability, I would rather that support local manufacturing and local economies, than have that sitting in Apple's vaults. Unfortunately, the Chinese also pay premium dollar and would also rather support local manufacturing and local economies. As China is deemed to become Apple's largest market, it makes sense for Apple to support the Chinese economy rather than the US one.[1] [1] http://blogs.computerworld.com/18517/apple_crazy_china_will_become_biggest_iphone_market http://blogs.computerworld.com/18517/apple_crazy_china_will_...
  - viae 15y ago
    > Why do you assume Americans are more deserving of Apple's manufacturing jobs than the Chinese? Because the consumers of every nation on earth, deep-down, are superficially patriotic. We don't want to recognize that the global economy is post-nation state. We want to pretend that when we buy an American company's products it is, American. Just as if we decide to buy an Italian sports car we want it to be Italian. Companies prey on these emotional ties to our identities in all manner of ways. In the parent thread's example, Apple does that by labeling their products' packaging, "Designed by Apple in California."
    - technoslut 15y ago
      I don't agree with the 'superficially patriotic' remark, at least in regards to Americans. I believe that after seeing the effect of all these manufacturing jobs being closed down, many would opt to pay a higher price knowing that it would save jobs. I don't necessarily blame companies for these emotional ties. There was a time when those ties really meant something.
      - delackner 15y ago
        In this case "many" means a minority. The majority have voted with their dollars over the past several decades and overwhelmingly chosen products that are manufactured wherever is cheapest.
        technoslut 15y ago
        It really is only four decades and I meant for today's American consumer in retrospect. Today's consumer doesn't have a choice. It is rare to find a product that hasn't been outsourced for labor.
  - technoslut 15y ago
    I do think that Americans are more deserving of products being produced here. I've always felt (maybe others do not) that you give back something to where you grew up or the society you are apart of. I see it no different in this case. Sony has done the same in Japan and I respect them more for it. There are great benefits to the US market and many, such as Apple, have taken advantage of it. They also take advantage of the system and keep their money overseas so it won't get taxed.
- curt 15y ago
  Even if Apple wanted to the regulations surrounding manufacturing, especially on a large scale are crazy. Can't tell you how many operations are moving overseas not because of the labor costs but because of the bureaucracy, paperwork, EPA, and regulations in the US.
  - diogenescynic 15y ago
    An interesting hypothetical scenario is one where Apple had all iPhones assembled in the US. Assuming that the wage of American workers is ten times as high as those of their Chinese counterparts, the total assembly cost would rise to $68 and total manufacturing cost would be pushed to approximately $240. Selling iPhones assembled by American workers at $500 per unit would still leave a 50% profit margin for Apple. In this hypothetical scenario, the iPhone could contribute to US exports and reduce the US trade deficit, not only with China, but also with the rest of world. More importantly, Apple would create jobs for US low-skilled workers: http://www.voxeu.org/index.php?q=node/6335 http://www.voxeu.org/index.php?q=node/6335
    - sneak 15y ago
      Except that in the USA it's probably illegal to fire workers who won't work 16 hour days and it's also illegal to expose workers to toxic solvents. OSHA and the associated regulations legislated us right out of the market.
      - diogenescynic 15y ago
        >Except that in the USA it's probably illegal to fire workers who won't work 16 hour days and it's also illegal to expose workers to toxic solvents. Wait, you think this is bad? Do you really think America can only compete on being the lowest cost manufacturer? And the scenario shows, the iPhone could be manufactured in the US and still be profitable (50% margin).
  - cageface 15y ago
    The endgame of all this could be that no country anywhere can enforce any environmental or labor laws because corporations will just move somewhere more desperate for jobs.
- cubicle67 15y ago
  (australian here) counter-point first: I've heard good things about Sears stuff, but it's not available here I've never considered American manufacturing to be high quality or premium. My experience is mostly based on American cars - which tend to have appalling build quality and reliability - and a few "made in America" bits I have, all of which are pretty average. I tend to associate American manufacturing with things like welding huge bits of iron together. durability? sure. attention to detail and care? not so much
  - deleted 15y ago
    [deleted]
  - yardie 15y ago
    American here. Most of American things of quality you wouldn't be able to buy in a consumer version. You can tell the quality of a product by the warranty that is assigned to it. For example most of the Sears Kenmore stuff have something like 10 year warranties. The Craftsman tools have a lifetime warranty. Most of the American bits never really leave the US because logistics cost the same everywhere. A big heavy washing machine from china loses its cost advantage once shipping and duties are added to the price. A high-end laptop has most of the price in labor and parts. Shipping costs next to nothing for it. American cars haven't really impressed me. For a while I also questionned the quality; why settle for something with a 3 year warranty when the japanese and koreans have 7 and 10 years. I believe the American car makers have learned a lot about this after getting trounced in the market. They have been extending there warranties and covering parts that weren't covered before. But it's not until you get into the really high-tech stuff that American builds even show up. Like 7-10 layer circuit boards, aerospace equipment, military hardware, and extreme environment hardware. To put it another way, the Americans, Japanese, and Germans sell the equipment to China to build the stuff they sell.
- jstevens85 15y ago
  Apple is an international company. They sell stuff outside of the US. Why would someone living in Europe/Asia/Africa give a shit about American jobs?
Qa8BBatwHxK8Pu 15y ago
I hate to read anything about poverty in China. Brings me back to my childhood.
wallflower 15y ago
If you have not read "What is China", read it after: http://www.tapsns.com/blog/index.php/2010/01/what-is-china/ http://www.tapsns.com/blog/index.php/2010/01/what-is-china/
- jackfoxy 15y ago
  Would really like folks who down-voted you to explain themselves. The fact China (and Russia) are the only supports of North Korea says everything you need to know about the essence of the rulers of both countries.
  - Tsagadai 15y ago
    That's not quite true. North Korea is also getting resources and labour from Burma, Iran and Zimbabwe. That is not counting countries that are doing business with North Korea through intermediaries in China or Russia.
  - forensic 15y ago
    Well, someone needs to be friends with NK. I don't think China leaning on NK could really help there. NK would just get more isolated. The solution to North Korea is to stop scaring them so that they will come out of their shell a bit.
  - guard-of-terra 15y ago
    As far as I heard, some european studios have their cartoons drawn in North Korea (you can buy a lot of quality and really really cheap work there). Does that count as support? If it doesn't, what does?
  - Volpe 15y ago
    For those that don't quite understand what "everything you need to know" means, could you spell it out?
  - jackfoxy 15y ago
    http://www.theamericanscholar.org/the-new-generation/ http://www.theamericanscholar.org/the-new-generation/
sunyc 15y ago
most people buy imac then install win 7 it's free anyway..
- sunyc 15y ago
  I'm surprised that people can't sense the irony here, I'm telling the true situation, btw.
gkanai 15y ago
Dalai Lama Apple advertisement: http://www.flickr.com/photos/jgdaily/4862908782/ http://www.flickr.com/photos/jgdaily/4862908782/ Apple Removes the Dalai Lama From Its Ads in Hong Kong http://www.nytimes.com/1998/04/17/world/apple-removes-the-dalai-lama-from-its-ads-in-hong-kong.html http://www.nytimes.com/1998/04/17/world/apple-removes-the-da...
buddylw 15y ago
I am no fan of Apple - mainly for their closed architecture, but I am also a cold-hearted economist when it comes to these types issues and this article is a bit of a one sided hit piece. I would like to throw in a few counterpoints so we can all maintain a proper context. 1.) When companies become as large as Apple and begin purchasing products from vendors. It is not possible for them to guarantee the safety and operation of every vendor. Just as when you go buy oranges at the grocery store, you might know what country or farm it came from, but you don't know working conditions at that farm. Even if you could know you don't have time to dig through that info - you just want an orange. You, like everyone else, just respond to the major media outrages and exposés and blindly avoid Wal-Mart, etc. Apple has more leverage here since they are a large company, but when it comes down to it, Apple ordered more screens and the vendor made the bad decision to use n-hexane. All Apple can do is lean on the vendor to make it right and not let it happen again. Believe me, even if Apple hates the workers and secretly wants them to die a horrible death for their stock holders, they don't want this bad press and would have avoided it if they could have. 2.) Outsourcing has real costs. It's not just cheaper because labor is cheaper. When you outsource you have to worry about the government, the infrastructure, shipping, recruiting talent etc. If you paid the Chinese workers American wages, it would not be worth the other costs to outsource at all. 3.) You can't compare living and working conditions between countries. As bad as a 3rd world outsourced job is to us 1st worlder's it's still generally BETTER than what they would have otherwise. In fact Apple and other 'outsourcers' are the one and only reason for the breath-taking trend line that is China's per capita growth: http://www.wolframalpha.com/input/?i=china+income+per+capita http://www.wolframalpha.com/input/?i=china+income+per+capita Just read about living in China in the 60s. It's horrifying to even think about and makes China today seem like paradise. In short the Chinese are better with Apple than without. 4.) There are not a fixed number of jobs in the world - there are only a fixed number of resources. If China can make us a product cheaper than we can make it WE benefit. Our resources are free to build other things for China when they want to cash in some of those US Dollars they so graciously accepted from Apple in exchange for real goods. Voluntary trade benefits both parties by its very nature or it doesn't happen. Also, the US unemployment issue is bit off the main topic of an already lengthy comment, but it has much more to do with sticky wages and our past decisions than it does outsourcing. 5.) Finally you can't not outsource. It's impossible. In this age of globalization everything is from everywhere. You can't even build a toaster by yourself: http://www.ted.com/talks/thomas_thwaites_how_i_built_a_toaster_from_scratch.html http://www.ted.com/talks/thomas_thwaites_how_i_built_a_toast...
mahyarm 15y ago
The parallels between america vs europe back in the 1800s and china vs america now are very interesting.
guard-of-terra 15y ago
I don't understand why your beloved apple won't throw in a $1000 monthly stipend for neurodamaged workers and close this horrible issue forever. Financially, it means considerably smaller than for me tossing a poor beggar a buck, and I do that when I can, even if I'm not a cause of their poorness, I ain't blamed for their misfortune and I won't be praised if I do. Also, why won't you Apple users boycott buying Apple until they take care of the issue in question? Other than being unable to function without the drug you're addicted to?
- guard-of-terra 15y ago
  It seems that the only reason why capitalistic company would give out money is fear. AirBNB is going to fix a problem which is obviously not caused by them because they are afraid of repercussions. Apple is not afraid of anything, therefore they're going to sit on a pile of gold like a dragon and that's it.

50 points by jibjab 15y ago

I think it's unfortunate that Apple chooses to not build it's hardware in the US, or model its manufacturing on Germany's successful mid-size firms. Apple makes and builds high-end products and has the fat margins that goes along with it - instead of outsourcing all manufacturing to China, it could choose to build everything in the US, employ the locals and use that as a selling point. If I pay premium dollar for quality and durability, I would rather that support local manufacturing and local economies, than have that sitting in Apple's vaults. In the end, this is not unlike the the local food movement - people would rather pay extra and support local farmers and economies.

bbgm 15y ago
I want quality products at a reasonable cost. If Apple can maintain that quality with Chinese manufacturing, then all power to them.
Steko 15y ago
Right, let's blame Apple for the decline in American manufacturing. Now combine that with this article and people like Mike Daisey's views that Apple is somehow uniquely responsible to blame for the plight of blue collar workers in China. Apparently Apple is the cause of all pain in the world. Sheesh I thought they just sold electronics.
olalonde 15y ago
> Apple makes and builds high-end products and has the fat margins that goes along with it - instead of outsourcing all manufacturing to China, it could choose to build everything in the US, employ the locals and use that as a selling point. Why do you assume Americans are more deserving of Apple's manufacturing jobs than the Chinese? > If I pay premium dollar for quality and durability, I would rather that support local manufacturing and local economies, than have that sitting in Apple's vaults. Unfortunately, the Chinese also pay premium dollar and would also rather support local manufacturing and local economies. As China is deemed to become Apple's largest market, it makes sense for Apple to support the Chinese economy rather than the US one.[1] [1] http://blogs.computerworld.com/18517/apple_crazy_china_will_become_biggest_iphone_market http://blogs.computerworld.com/18517/apple_crazy_china_will_...
- viae 15y ago
  > Why do you assume Americans are more deserving of Apple's manufacturing jobs than the Chinese? Because the consumers of every nation on earth, deep-down, are superficially patriotic. We don't want to recognize that the global economy is post-nation state. We want to pretend that when we buy an American company's products it is, American. Just as if we decide to buy an Italian sports car we want it to be Italian. Companies prey on these emotional ties to our identities in all manner of ways. In the parent thread's example, Apple does that by labeling their products' packaging, "Designed by Apple in California."
  - technoslut 15y ago
    I don't agree with the 'superficially patriotic' remark, at least in regards to Americans. I believe that after seeing the effect of all these manufacturing jobs being closed down, many would opt to pay a higher price knowing that it would save jobs. I don't necessarily blame companies for these emotional ties. There was a time when those ties really meant something.
    - delackner 15y ago
      In this case "many" means a minority. The majority have voted with their dollars over the past several decades and overwhelmingly chosen products that are manufactured wherever is cheapest.
      - technoslut 15y ago
        It really is only four decades and I meant for today's American consumer in retrospect. Today's consumer doesn't have a choice. It is rare to find a product that hasn't been outsourced for labor.
- technoslut 15y ago
  I do think that Americans are more deserving of products being produced here. I've always felt (maybe others do not) that you give back something to where you grew up or the society you are apart of. I see it no different in this case. Sony has done the same in Japan and I respect them more for it. There are great benefits to the US market and many, such as Apple, have taken advantage of it. They also take advantage of the system and keep their money overseas so it won't get taxed.
curt 15y ago
Even if Apple wanted to the regulations surrounding manufacturing, especially on a large scale are crazy. Can't tell you how many operations are moving overseas not because of the labor costs but because of the bureaucracy, paperwork, EPA, and regulations in the US.
- diogenescynic 15y ago
  An interesting hypothetical scenario is one where Apple had all iPhones assembled in the US. Assuming that the wage of American workers is ten times as high as those of their Chinese counterparts, the total assembly cost would rise to $68 and total manufacturing cost would be pushed to approximately $240. Selling iPhones assembled by American workers at $500 per unit would still leave a 50% profit margin for Apple. In this hypothetical scenario, the iPhone could contribute to US exports and reduce the US trade deficit, not only with China, but also with the rest of world. More importantly, Apple would create jobs for US low-skilled workers: http://www.voxeu.org/index.php?q=node/6335 http://www.voxeu.org/index.php?q=node/6335
  - sneak 15y ago
    Except that in the USA it's probably illegal to fire workers who won't work 16 hour days and it's also illegal to expose workers to toxic solvents. OSHA and the associated regulations legislated us right out of the market.
    - diogenescynic 15y ago
      >Except that in the USA it's probably illegal to fire workers who won't work 16 hour days and it's also illegal to expose workers to toxic solvents. Wait, you think this is bad? Do you really think America can only compete on being the lowest cost manufacturer? And the scenario shows, the iPhone could be manufactured in the US and still be profitable (50% margin).
- cageface 15y ago
  The endgame of all this could be that no country anywhere can enforce any environmental or labor laws because corporations will just move somewhere more desperate for jobs.
cubicle67 15y ago
(australian here) counter-point first: I've heard good things about Sears stuff, but it's not available here I've never considered American manufacturing to be high quality or premium. My experience is mostly based on American cars - which tend to have appalling build quality and reliability - and a few "made in America" bits I have, all of which are pretty average. I tend to associate American manufacturing with things like welding huge bits of iron together. durability? sure. attention to detail and care? not so much
- deleted 15y ago
  [deleted]
- yardie 15y ago
  American here. Most of American things of quality you wouldn't be able to buy in a consumer version. You can tell the quality of a product by the warranty that is assigned to it. For example most of the Sears Kenmore stuff have something like 10 year warranties. The Craftsman tools have a lifetime warranty. Most of the American bits never really leave the US because logistics cost the same everywhere. A big heavy washing machine from china loses its cost advantage once shipping and duties are added to the price. A high-end laptop has most of the price in labor and parts. Shipping costs next to nothing for it. American cars haven't really impressed me. For a while I also questionned the quality; why settle for something with a 3 year warranty when the japanese and koreans have 7 and 10 years. I believe the American car makers have learned a lot about this after getting trounced in the market. They have been extending there warranties and covering parts that weren't covered before. But it's not until you get into the really high-tech stuff that American builds even show up. Like 7-10 layer circuit boards, aerospace equipment, military hardware, and extreme environment hardware. To put it another way, the Americans, Japanese, and Germans sell the equipment to China to build the stuff they sell.
jstevens85 15y ago
Apple is an international company. They sell stuff outside of the US. Why would someone living in Europe/Asia/Africa give a shit about American jobs?

Qa8BBatwHxK8Pu 15y ago

I hate to read anything about poverty in China. Brings me back to my childhood.

wallflower 15y ago

If you have not read "What is China", read it after: http://www.tapsns.com/blog/index.php/2010/01/what-is-china/ http://www.tapsns.com/blog/index.php/2010/01/what-is-china/

jackfoxy 15y ago
Would really like folks who down-voted you to explain themselves. The fact China (and Russia) are the only supports of North Korea says everything you need to know about the essence of the rulers of both countries.
- Tsagadai 15y ago
  That's not quite true. North Korea is also getting resources and labour from Burma, Iran and Zimbabwe. That is not counting countries that are doing business with North Korea through intermediaries in China or Russia.
- forensic 15y ago
  Well, someone needs to be friends with NK. I don't think China leaning on NK could really help there. NK would just get more isolated. The solution to North Korea is to stop scaring them so that they will come out of their shell a bit.
- guard-of-terra 15y ago
  As far as I heard, some european studios have their cartoons drawn in North Korea (you can buy a lot of quality and really really cheap work there). Does that count as support? If it doesn't, what does?
- Volpe 15y ago
  For those that don't quite understand what "everything you need to know" means, could you spell it out?
- jackfoxy 15y ago
  http://www.theamericanscholar.org/the-new-generation/ http://www.theamericanscholar.org/the-new-generation/

sunyc 15y ago

most people buy imac then install win 7 it's free anyway..

sunyc 15y ago
I'm surprised that people can't sense the irony here, I'm telling the true situation, btw.

gkanai 15y ago

Dalai Lama Apple advertisement: http://www.flickr.com/photos/jgdaily/4862908782/ http://www.flickr.com/photos/jgdaily/4862908782/ Apple Removes the Dalai Lama From Its Ads in Hong Kong http://www.nytimes.com/1998/04/17/world/apple-removes-the-dalai-lama-from-its-ads-in-hong-kong.html http://www.nytimes.com/1998/04/17/world/apple-removes-the-da...

buddylw 15y ago

I am no fan of Apple - mainly for their closed architecture, but I am also a cold-hearted economist when it comes to these types issues and this article is a bit of a one sided hit piece. I would like to throw in a few counterpoints so we can all maintain a proper context. 1.) When companies become as large as Apple and begin purchasing products from vendors. It is not possible for them to guarantee the safety and operation of every vendor. Just as when you go buy oranges at the grocery store, you might know what country or farm it came from, but you don't know working conditions at that farm. Even if you could know you don't have time to dig through that info - you just want an orange. You, like everyone else, just respond to the major media outrages and exposés and blindly avoid Wal-Mart, etc. Apple has more leverage here since they are a large company, but when it comes down to it, Apple ordered more screens and the vendor made the bad decision to use n-hexane. All Apple can do is lean on the vendor to make it right and not let it happen again. Believe me, even if Apple hates the workers and secretly wants them to die a horrible death for their stock holders, they don't want this bad press and would have avoided it if they could have. 2.) Outsourcing has real costs. It's not just cheaper because labor is cheaper. When you outsource you have to worry about the government, the infrastructure, shipping, recruiting talent etc. If you paid the Chinese workers American wages, it would not be worth the other costs to outsource at all. 3.) You can't compare living and working conditions between countries. As bad as a 3rd world outsourced job is to us 1st worlder's it's still generally BETTER than what they would have otherwise. In fact Apple and other 'outsourcers' are the one and only reason for the breath-taking trend line that is China's per capita growth: http://www.wolframalpha.com/input/?i=china+income+per+capita http://www.wolframalpha.com/input/?i=china+income+per+capita Just read about living in China in the 60s. It's horrifying to even think about and makes China today seem like paradise. In short the Chinese are better with Apple than without. 4.) There are not a fixed number of jobs in the world - there are only a fixed number of resources. If China can make us a product cheaper than we can make it WE benefit. Our resources are free to build other things for China when they want to cash in some of those US Dollars they so graciously accepted from Apple in exchange for real goods. Voluntary trade benefits both parties by its very nature or it doesn't happen. Also, the US unemployment issue is bit off the main topic of an already lengthy comment, but it has much more to do with sticky wages and our past decisions than it does outsourcing. 5.) Finally you can't not outsource. It's impossible. In this age of globalization everything is from everywhere. You can't even build a toaster by yourself: http://www.ted.com/talks/thomas_thwaites_how_i_built_a_toaster_from_scratch.html http://www.ted.com/talks/thomas_thwaites_how_i_built_a_toast...

mahyarm 15y ago

The parallels between america vs europe back in the 1800s and china vs america now are very interesting.

guard-of-terra 15y ago

I don't understand why your beloved apple won't throw in a $1000 monthly stipend for neurodamaged workers and close this horrible issue forever. Financially, it means considerably smaller than for me tossing a poor beggar a buck, and I do that when I can, even if I'm not a cause of their poorness, I ain't blamed for their misfortune and I won't be praised if I do. Also, why won't you Apple users boycott buying Apple until they take care of the issue in question? Other than being unable to function without the drug you're addicted to?

guard-of-terra 15y ago
It seems that the only reason why capitalistic company would give out money is fear. AirBNB is going to fix a problem which is obviously not caused by them because they are afraid of repercussions. Apple is not afraid of anything, therefore they're going to sit on a pile of gold like a dragon and that's it.