China is the production capital of the world. China’s economic missile is based on this fuel. The country has been criticised for its working conditions, but it still continues to be the destination for all MNCs.
However, a recent announcement by Apple might change things for China. Apple has announced that it has communicated with the Chinese manufacturers that it is going to increase production outside China.
Apple has also cited that India and Vietnam are its preferred new choices. This decision comes amidst strict authoritarian lockdown by the Communist government of China.
The Covid and the strict lockdowns led to a huge dent in Apple’s earnings. On top of this, the company was also affected by the trade war between the US and China.
As compared to China, India and Vietnam present a better alternative. Especially India which is touted to be China’s biggest competitor in the coming years.
India’s economy dived during the pandemic, however as the lockdown rules were relaxed, the economy shot up. India is currently the fastest-growing major economy of the World.
The decision by Apple is bound to hurt China. Apple is still the biggest US company with the majority of its production in China. Losing business with such a giant is good for no party.
Apple has announced that it plans to increase production outside of China and cites India and Vietnam as its preferred new choices. This decision comes amid strict authoritarian lockdowns by the Chinese government and the impact of the COVID-19 pandemic and trade war between the US and China on Apple’s earnings. India presents a particularly attractive alternative as it is the fastest-growing major economy in the world and is touted to be China’s biggest competitor in the coming years. This move by Apple is likely to hurt China as it is losing business from a major company that has a significant amount of production in the country.
While Tata Group is in discussions with Taipei’s Wistron Corp, one of Apple’s top vendors in India, to buy its manufacturing facility in Karnataka for Rs 5,000 crore.
If successful, the pact could make Tata the first Indian company to build iPhones, which are currently mainly assembled by Taiwanese manufacturing giants like Wistron and Foxconn Technology Group in China and India.
Apple says it has started making its iPhone 14 in India as it diversifies its supply chains away from China. The company makes most of its phones in China but has shifted some production outside the country as tensions rise between Washington and Beijing. Burned by Covid lockdowns and worker protests at Foxconn plants, the iPhone maker is looking to diversify the supply chain.