Illustration: Liu Rui/GT
White House trade advisor Peter Navarro harshly criticized Apple in an interview with CNBC on Monday, claiming that the company is not moving production out of China fast enough. Despite increased pressure by Washington in recent months, CNBC noted that analysts and supply chain experts have argued it would be impossible for Apple to completely move iPhone production to the US.
Growing signs in recent months suggest Washington is ramping up pressure on Apple to shift its manufacturing operations away from China and other Asian countries back to the US. Whether Apple will succumb to this pressure, and to what degree, remains to be seen. However, one thing appears almost certain: the more Washington presses, the greater the potential losses for the US tech giant.
According to CNBC, which cited certain estimates, a US-made iPhone could cost as much as $3,500. In the fiercely competitive international smartphone market, where price is a key determinant of competitiveness, such a high price might result in significant losses for Apple. This is undoubtedly a scenario Apple would prefer to avoid.
Apple has made long-term investments in China's supply chain and market for compelling reasons. The unique advantages that China offers are hard to replicate in other countries. These benefits are multifaceted, encompassing several key areas.
First, China has a comprehensive manufacturing supply chain ecosystem, characterized by its complete support systems and high assembly efficiency. This ecosystem demonstrates agility and flexibility, enabling seamless coordination from component production to assembly. Industry experts widely believe that a high-quality supply chain is foundational for mass production. It is crucial for maintaining stable production capacities, driving technological advancements, and enhancing a competitive edge in the market.
Second, the rapid advancement of China's high-end manufacturing has driven continuous breakthroughs in precision engineering, automated production and the application of new materials. China's swift progress in semiconductor manufacturing, 5G communications, and artificial intelligence offers Apple access to cutting-edge technological solutions, supporting its product innovation. During his visit to Chinese suppliers in March, Apple COO Jeff Williams praised China's intelligent manufacturing progress over the past 30 years, according to media reports.
China's ongoing manufacturing upgrade is evident in technological progress, enhanced production efficiency and optimized supply chains - enabling Apple to lower production costs while maintaining high quality for its innovative products.
Third, China's talent advantage supports Apple's precision manufacturing and provides strong backing for its technological innovation, helping the company maintain its competitive edge in the global market.
Decades of industrialization have allowed China to build a vast pool of well-educated engineers, technicians and highly skilled workers. Apple CEO Tim Cook once explained that the company's products require advanced, high-precision tooling. China can offer a concentration of skilled tooling engineers in a single region that would be difficult to match in the US at least in the short term.
Apple has also established several research and development centers in China. These centers attract top talent from China's leading universities, offering critical intellectual support for Apple's product innovation and supply chain optimization.
Fourth, China's vast consumer market plays an important role in Apple's success. As the world's second-largest economy with a rapidly growing middle class and strong demand for electronics, China represents one of Apple's most important markets.
Moreover, China's digital ecosystem - with widespread mobile payment adoption, app usage, and e-commerce integration - creates fertile ground for Apple to deepen user engagement and further improve the quality of its products and services.
The combination of these factors has made China's supply chain and market uniquely attractive and irreplaceable for companies like Apple. This synergy has been leveraged by Apple, contributing significantly to its business growth and success. If Washington pushes Apple to cut ties with this integrated system, it would be the American company and ultimately US consumers that suffer.
China's supply chain and market advantages are available to all domestic and foreign companies, as long as they comply with relevant regulations and laws. This policy predictability is also a strength of China's economy. No matter how much pressure the US puts on its own companies, China's supply chain and market benefits will remain unchanged and open.
What we need to do is further enhance these advantages and continue to expand openness, welcoming global companies, including those from the US, to invest in China and take advantage of its supply chain and market benefits, which can help strengthen their competitiveness. This is mutually beneficial cooperation. We believe that most multinational companies will make wise decisions.
The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn