A Silicon Valley giant fuels China’s rise
In the early 2000s, American engineers flew to China in droves to train local workers in precision manufacturing. The scale of U.S. corporate investment rivaled historic economic aid plans. Apple’s entry into China played a pivotal role in transforming the nation into a global manufacturing force. But that growth also brought long-term entanglements: Apple, a symbol of American innovation, now relies heavily on the infrastructure of a country often positioned as a strategic competitor.
A recent book chronicles how this dependence developed over two decades. The narrative can be seen through multiple lenses: a success story of capitalism lifting millions out of poverty with affordable, high-tech products—or a cautionary tale of technological overreach and lost strategic advantage. The reality may lie somewhere in between.
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A pivotal call that set the course
In 1999, Terry Gou, leader of Taiwanese electronics firm Foxconn, contacted a young Apple operations executive: Tim Cook. At the time, Apple was attempting a turnaround after near-bankruptcy. Steve Jobs had just returned, and a bold new product—the iMac—was its main hope. The iMac’s unconventional design required innovative, highly controlled manufacturing processes.
For years, Apple had prioritized domestic production. Its first computers were assembled by hand in California, sometimes in unconventional setups. Early manufacturing efforts relied on a patchwork of local labor, with limited oversight or formal protections. But as Apple’s popularity grew, so did the need for scalable, cost-effective manufacturing.
From garages to global facilities
While other tech firms were already offshoring aggressively, Apple clung longer to in-house production. The company’s unique product designs demanded precision. Executives believed such standards could only be met under their direct control. Yet by the late 1990s, cost pressures and investor expectations pushed Apple to shift course.
By the time of Cook and Gou’s conversation, Apple had already started splitting production across facilities in California, Japan, and Ireland. But the company still faced manufacturing bottlenecks, especially as the iMac gained momentum. Its monitor, built by LG in South Korea, was the most complex part. To keep pace with demand, LG expanded to factories in Wales and Mexico—moves that ultimately failed to meet expectations and disrupted Apple’s rollout.
China becomes Apple’s factory floor
As setbacks mounted, Apple needed a partner with scale, flexibility, and labor efficiency. China, with its growing infrastructure and workforce, became the clear choice. The transition was rapid. Apple moved more of its operations to facilities like Foxconn’s massive campuses, where production lines could ramp up in days and design changes were implemented overnight.
This shift laid the groundwork for Apple’s supply chain strategy today—optimized for speed, secrecy, and cost. China became indispensable not just for assembling iPhones and iPads, but for enabling Apple’s entire product ecosystem.
The legacy of Apple’s industrial pivot
Two decades later, Apple remains one of the world’s most profitable companies. Yet its deep integration with China’s manufacturing engine has sparked questions about economic resilience and national competitiveness. The same decisions that powered Apple’s growth also made it vulnerable to disruptions and political tensions.
The story of Apple in China is complex: a case study in industrial evolution, globalization, and unintended consequences. Whether it reflects the strength or the limits of capitalism depends on one’s perspective. But its impact on the world’s economic landscape is undeniable.
