Apple’s Impact on China and the Automotive Industry

Just when you think you know everything about Apple because you’ve been following the company for years, along comes a book that makes you question everything you know. Patrick McGee, Silicon Valley correspondent for the Financial Times, has pulled unknown nuggets of knowledge out of his hat with his book Apple in China, which gives you a completely different perspective on Apple and its influence on China, but also on the influence that China has on this company.

The book clears up one misunderstanding in particular. Apple did not simply outsource production, as other companies have done for decades, no, Apple did something different. All machines that are located at suppliers such as Foxconn are owned by Apple and not, as is usually the case, by the suppliers. Apple then not only works with the suppliers, but also trains their employees intensively. Over the years, Apple has trained millions of Chinese engineers to bring them up to the quality standards required by Apple, which in turn makes these engineers the most sought-after candidates in the Chinese markets for the competition. With Apple’s tacit approval, suppliers also work with Apple’s competitors so as not to be solely dependent on Apple. A single design change can determine the success or failure of a supplier, and Apple is trying to avoid this because of possible bad press. Apple has thus made competition from Huawei and others possible in the first place.

It’s amazing to hear that Apple invested 55 billion dollars in China in 2015 alone and the numbers have only increased since then. This makes every other initiative pale in comparison – such as the CHIPS and Science Act in the USA, which is intended to invest 53 billion dollars over four years in the development and production of chips in the USA and bring this production back.

The fact that Apple is training millions of Chinese engineers also means that other industries are benefiting, such as the automotive industry, which is making Chinese cars so competitive that other traditional car manufacturers are coming under enormous pressure. The quality standards that Apple has instilled in these engineers in the electronics industry are spilling over into other sectors. This explains why, after years of struggling with quality, Chinese car manufacturers are now starting to outdo German and other manufacturers in all areas.

But it is not only in the automotive industry that this is having an impact. The defense industry, aerospace and robotics are also benefiting from the Apple standard.

However, the dark side can also be clearly seen. The book describes in detail how the headwinds have intensified since Xi Jinping came to power and how China’s authoritarian system is not only bringing domestic companies into line. Apple is also highly exposed to the whims of China and its authoritarian regime. It took Apple a very long time to understand what exactly is happening and how China works. One unknown side is the battle with the Chinese mafia, the so-called “yellow cows”, to which Apple had no answer for a long time.

Patrick McGee interviewed 200 people for this book and gives an insight that we rarely get into this secretive company. If you are interested in technology and geopolitics, this is a must read. I think it’s the non-fiction book of the year 2025.

By the way, the author was invited on Jon Stewart this Monday for a segment worth watching:

This article was also published in German.