How Apple Developed China’s Tech Landscape With Patrick McGee
When Apple entered China nearly 15 years ago, it began a multibillion-dollar investment project to train staff, build infrastructure and introduce tech to the country. This program allowed China to grow its technological base, propelling the country into the global tech race. Patrick McGee joins us in this episode to discuss the relationship between Apple and China, and his new book “Apple in China: The Capture of the World’s Greatest Company.”
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Apple’s decades-long investment in China has not only shaped the tech giant’s global success but also helped fuel China’s rise as a technological and economic powerhouse, according to Patrick McGee, whose new book “Apple in China” explores the relationship in depth.
Speaking on Zoom In Zoom Out, McGee explained that Apple’s financial commitments in China reached an extraordinary level, with a pledged US$275 billion investment over five years beginning in 2016.
“They figure out that they are investing US$55 billion a year,” McGee said. “That was such an extraordinary figure that I struggled to find any corporate equivalent.” In fact, he said, Apple’s annual spending in China outpaced even the U.S. government’s US$52 billion, four-year CHIPS Act, aimed at revitalizing domestic chip manufacturing.
McGee draws a provocative comparison between Apple’s influence in China and the postwar U.S. Marshall Plan, calling both nation-building efforts. “Apple was investing a CHIPS Act per year in China,” he said, adding that Apple’s overall impact even surpasses Taiwan’s own investments in China, estimated at US$110 billion over three decades.
Apple’s entwinement with China’s development runs deep. Since the early 2000s, McGee said, “Apple has been sending literal planeloads of engineers to dozens of factories” to help install advanced equipment and upskill the local workforce. The results can be seen in the rise of Chinese smartphone competitors like Huawei and Oppo.
But that deep integration has also created a precarious dependency. “Apple has enormous exposure to a single country, China, for really all of its manufacturing,” McGee noted, and the company relies heavily on Taiwan’s TSMC for its advanced semiconductor chips.
That reliance raises the stakes in an increasingly tense geopolitical environment. “If there is a chief benefactor to something like [a war in the Taiwan Strait], it is probably Samsung,” McGee said, warning that a Chinese invasion of Taiwan could be the “equivalent of a meteor strike on Apple’s business.”
Apple’s attempts to diversify into India and Vietnam face headwinds, moreover. “Beijing has taken more savvy efforts to actually block the Chinese visas of the people that would need to go over there to set up shop,” McGee explained. “Beijing wants technology transfer to be a one-way gate. The information comes in, it does not leave.”
On the issue of censorship, McGee said Apple has complied with many of Beijing’s demands, such as removing VPN apps or restricted news outlets from its platforms. “Apple doesn’t want to spend political capital fighting for the rights of the Chinese to be able to use VPNs,” he said.
Asked why China allowed Apple to gain such a foothold in the first place, McGee said it was part of China’s broader strategy to lure in foreign capital and absorb expertise. “There’s nothing nefarious about that. That’s actually pretty brilliant,” he said.
