Apple in China The capture of the world's greatest company

Business journalist McGee explains in this astute account just how Apple, partnering with China, became a global colossus, while placing itself, and possibly the world's economy, in peril: "It's not merely that Apple has exploited Chinese workers," writes McGee, "it's that Beijing has allowed Apple to exploit its workers, so that China can in turn exploit Apple." It began 25 years ago when Apple realized that not only were Chinese workers readily and cheaply available, but partnering with farsighted and ruthlessly demanding entrepreneurs in China like Foxconn's founder, Terry Gou, Apple could train up those workers to meet Apple's obsessively high manufacturing standards. But by going all-in on making China its manufacturing base, McGee argues that Apple's massive investment there is vulnerable to robust competition from Chinese companies using that trained-up workforce, to the political whims of China's authoritarian ruler, Xi Jinping (not to mention those of Donald Trump), and to serious consumer backlash in China if it tries to decouple its Chinese manufacturing base and send it to other countries. A former Apple VP asks the author if he isn't obsessing a little about geopolitics: "I was there in the 2000s when we were setting up production in China," he explains, "and I can tell you, we weren't thinking about geopolitics at all." To which McGee writes, "Precisely."

The computer maker that once dominated China's development into an industrial powerhouse is now dominated by China's government, according to this insightful debut account. Financial Times reporter McGee recaps Apple's 30-year process of shuttering its original American factories and outsourcing production to Chinese contract manufacturers. It's partly a saga of greed as Apple took advantage of Asia's lax regulations and its own bargaining power--Apple forced one firm to sign a production contract without reading it--to ruthlessly cut costs. But Apple also invested hundreds of billions of dollars in its Chinese suppliers, taught them state-of-the-art techniques, and brought them its own engineers and high-tech machinery. Apple eventually located most of its production in China, which, McGee contends, made it hostage to Beijing's whims. The company appreciated the government's policy of crushing labor unions and muting bad press but had to bow to demands to compromise customers' data privacy and accommodate censorship. McGee's perceptive account presents a cogent rethink of Apple's role in the global economy, painting the company as the de facto proprietor and active manager of China's advanced electronics sector. He also makes the potentially dry subject of global supply chains riveting, with epic narratives of bleeding-edge product design and colorful portraits of larger-than-life leaders. The result is a fascinating analysis of how global capitalism conquered China--and vice versa. (May)

An exposé of how the quest for profit put a once-iconoclastic tech company into the orbit of a totalitarian regime. Founded in 1976 in Silicon Valley, Apple once prided itself on building its own hardware and software, eventually offshoring some manufacture to Ireland and Singapore. Then, writesFinancial Times correspondent McGee, came the advent of "contract manufacturers" in places like South Korea, Mexico, and China, the last of them characterized by an irresistible-to-capitalists competitiveness built on what one Chinese scholar calls "low wages, low welfare, and low human rights." That image does not square with Apple's "think different" branding (or, for that matter, its iconic1984-themed ad of old), but Apple has long relied on China as not just a source of production but also a huge market, earning the company, by McGee's account, some $70 billion a year. Apple has also trained huge numbers of Chinese engineers and fueled a homegrown computer and phone industry that in effect was built on its intellectual property. The flow of cash goes both ways; McGee writes that Apple spent so much money in China--by the company's reckoning, to the tune of $55 billion a year by 2015, but possibly much more--that over time it has become "the world's biggest corporate investor" in the country. Under Xi Jinping's rule, Apple's freedom of market movement has been curtailed, yet the savings in labor and materials keep the company captured there in the technical sense, even as Apple tries to placate the government by blocking virtual private networks (VPNs), restricting the use of AirDrop "after it emerged that Chinese citizens were using it to organize," and otherwise bowing to the Chinese Communist Party. To no avail, McGee suggests: Apple is likely to come to an unhappy end in China as its chief domestic rival, Huawei, outstrips its market share, while Donald Trump's trade wars may harm its bottom line in the near term. A well-argued, eye-opening look at the dark side of globalism, and those who win and lose because of it. Copyright (c) Kirkus Reviews, used with permission.