How Tim Cook’s Apple may have undermined America’s lead in technological innovation and even its national security

In this photo released by Xinhua News Agency, visiting Apple CEO Tim Cook, left, was greeted by Chinese Vice Premier Ding Xuexiang prior to their meeting in Beijing on Thursday, Oct. 19, 2023. Cook was in Beijing after attending the CEO conference of the Third Belt and Road Forum which was held on Oct. 18.
In a thought-provoking new book, the intricate relationship between Apple’s manufacturing strategies and China’s rapid economic ascent takes center stage. By offshoring much of its production to China, Apple not only transformed global supply chains but also turbocharged China’s technological and industrial development. However, this corporate strategy raises critical questions about its long-term consequences, with the book suggesting that such offshoring may have eroded America’s edge in technological innovation and potentially compromised its national security.
Greg Rosalsky for NPR:
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Planeloads of some of America’s best engineers flying to China to train its workforce in how to do advanced manufacturing. A jaw-dropping level of investment in China’s development, which puts the Marshall Plan to shame. When Apple came to China, the company proved instrumental in helping the country become a manufacturing juggernaut. And now one of America’s most valuable companies is awkwardly dependent on the production capabilities of a country that has become one of America’s biggest adversaries.
A new book from Financial Times journalist Patrick McGee, titled Apple in China: The Capture of the World’s Greatest Company, offers the wild story of how Apple became so deeply entangled with China.
For much of its early history, Apple had manufactured its products in America. After the company was founded in 1976, McGee writes, it employed Steve Jobs’ sister Patty to hand assemble its first computer’s circuit boards… When the money started pouring in, Apple set up a more legitimate factory in the Bay Area. While it did work with overseas suppliers on certain parts and products, the company was much slower and less willing than other computer companies to completely outsource and offshore production…
In 1999, Terry Gou, the head of a then little-known Taiwanese company named Foxconn, made a fateful phone call to a young operations executive who’d just joined Apple: Tim Cook… Foxconn had for years been a small-time supplier of cheap component parts for Apple, but it had recently proven itself in making the external housing for Apple’s Power Mac G4 desktop. Gou dreamed of a much grander relationship with the American company…
That’s when he called Tim Cook, whom he had previously worked with when Cook was at Compaq, an American computer company that was a big Foxconn client…
“Internal documents obtained for this book reveal that Apple’s investments in China reached $55 billion per year by 2015, an astronomical figure that doesn’t include the costs of components in Apple hardware.”
But money may not have even been Apple’s most valuable investment in China. It may have been teaching a massive workforce how to do advanced manufacturing. “Apple itself estimates that since 2008 it has trained at least 28 million workers — more people than the entire labor force of California,” McGee writes.
“This rapid consolidation reflects a transfer of technology and knowhow so consequential as to constitute a geopolitical event, like the fall of the Berlin Wall,” McGee argues.
But, really, it’s less like the fall of the Berlin Wall, which ushered in greater freedom and democracy. It’s more like if Corporate America had supercharged the economy of the Soviet Union.

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MacDailyNews Take: Yup, although it’s nothing our regular readers haven’t been hearing from us for many years.
MacDailyNews, “Tim Cook firmly latched Apple onto China’s CCP teat. What’s his plan for weaning it off?,” November 2, 2022:
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In 2016, Apple’s “Operations Genius,” Tim Cook, secretly signed a secret agreement with the human rights-abusing Chinese Communist Party estimated to be worth more than $275 billion. Cook promised that Apple would do its part to develop China’s economy and technological prowess via infrastructure investments, business deals, and worker training in exchange for the CCP quashing its surge of what promised to be crippling regulatory actions against Apple, The Information reported last December.
Many years before that, some two decades ago, it was Cook who spearheaded Apple’s move to make products “Designed in California,” but “Assembled in China.”
Since Cook, 62, made his $275 billion secret deal with the CCP five years ago, and as he now nears retirement age, Apple has made precious little headway in diversifying its production away from capricious, authoritarian China.
Why?
If the $275 billion wasn’t to buy Apple half a decade to free itself by diversifying its production away from China, mitigating risk, what was it for?
Longtime Apple analyst Gene Munster on Tuesday estimated that it would take as long as a decade for Apple to reduce its current near-total reliance on China to meaningful levels…
Tim Cook painted Apple into this corner. It worked marvelously well, until it didn’t.
A publicly traded company CEO’s job is to act in the best interest of its shareholders.
But, Apple’s operations don’t scream “genius” today. They scream “RISK!” But, you know, the market just loooves risk…
Apple shareholders and, in turn, Apple’s rubber-stamping Board of Lackeys, should hold one person responsible if this spiraling China dilemma continues deteriorate: Timothy D. Cook.
So, what’s Cook’s plan for getting the company out of this boxed-in predicament into which he placed it? Certainly Apple shareholders have a right to know. Hopefully, Cook has a better plan than simply cashing out and dumping this nightmarish quandary into the lap of Apple’s next CEO.

The time to accelerate plans to move production out of China was November 9th 2016, but, hey, six years late is better than never! – MacDailyNews, December 4, 2022

It’s smart for both Apple and Foxconn to diversify assembly outside of China. There’s no sense having all of your eggs in one basket. — MacDailyNews, April 2, 2019

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