Apple must work with Chinese authorities to promote common interests as trade conflict intensifies

By Hu Weijia Source:Global Times Published: 2018/9/10 21:58:40

With Apple's September 12 event approaching fast, the tech giant has found itself in the spotlight. Shares of some Chinese mainland Apple suppliers fell on Monday after US President Donald Trump tweeted that prices of some Apple items may increase because of tariffs the US may impose on Chinese exports, but the company can find an easy solution: "make your products in the US instead of China."

However, in most people's eyes, there is little chance for the tech giant to move production of its devices from China to the US, so a rise in prices is almost an inevitable result of the proposed tariffs by Washington in its escalating trade conflict with China. Even if new items to be launched at this year's September event are amazing, a rise in prices may leave a dent in Apple's brand amid intense competition in the global markets.

Why is it almost impossible for Apple to shift its production from China to the US? In 2011, Apple's late CEO Steve Jobs was quoted by the Business Insider as saying that Apple's factories needed 30,000 skilled engineers - beyond what the US education system was able to produce, so "you can't find that many in the US to hire."

Even if the US can educate that many engineers, various economists have estimated an all-US labor force would add to the cost of an iPhone by as much as $100 per device, because of the high labor cost and high land price in the US.

Unlike US plants, some Chinese companies are staffed by full-time employees living in dormitories. Such manufacturers, including Foxconn, can send hundreds of thousands of workers to the assembly lines at a moment's notice. Shifting production from China to the US will reduce the speed and efficiency of assembly operations. Apple may have plans to build some new plants in the US, but it is unlikely to move all of its manufacturing jobs from China back to the US. Apple's alliance with China's industrial chain is indivisible, so a wide range of Apple items would be affected by the proposed US tariffs on Chinese goods.

Amid escalating trade tensions, the US technology giant needs to work with China to find a way to strengthen their cooperation and protect the interests of both sides.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn



Posted in: EYE ON ECONOMY

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