Your iPhone has to be made In China, and Apple can’t absolve your guilt (if you have any)

“A series of articles from The New York Times this week on Apple’s tricky relationship with the company that builds the iPhone and iPad makes it clear that while society may occasionally recoil at the human cost required to build our flashy mobile toys, when it comes to consumer electronics there is no Plan B,” Tom Krazit writes for paidContent.

“China is the world’s workshop, having invested heavily in manufacturing and infrastructure over the last 20 years, and its advantages in consumer electronics are maybe even more pronounced. A complex network of electronics producers and suppliers has sprung up in cities like Shenzhen and Chengdu, much the same way that London and New York are centers of finance and Los Angeles dominates entertainment production,” Krazit writes. “Apple is only being singled out by the Times because it is at the top of the tech heap, and while that may be fair game given Apple’s unbelievable profit, it overstates the ability of the company to act as a macroeconomic force.”

Krazit writes, “The truth is pretty simple: the modern consumer electronics industry couldn’t exist without companies like Foxconn. And Apple can’t just take its ball and go home: there’s nowhere else in the world one can find an industrial system that could replace what China has built, and attempts at building an alternative might take decades. Apple is right to keep pressure on its suppliers to improve conditions, and critics are right to ask the company to do even more. But even Apple doesn’t have the clout to reverse two decades of economic history that has led to the status quo, in which low-cost Chinese manufacturing props up the consumer-driven U.S. economy.”

Read more in the full article – recommended – here.

MacDailyNews Take: The New York Times is rapidly degrading into fish wrap, but at least one of their followups, buried as it may be, contains the real truth. The Times obtained comments from Chinese readers posted on the Caixin web site, Weibo.com and other Chinese social media and translated them. A sample:

•  “If people saw what kind of life workers lived before they found a job at Foxconn, they would come to an opposite conclusion of this story: that Apple is such a philanthropist.” – Zhengchu1982

• “If not to buy Apple, what’s the substitute – Samsung? Don’t you know that Samsung’s products are from its OEM factory in Tianjin? Samsung workers’ income and benefits are even worse than those at Foxconn. If not to buy iPad – (do you think) I will buy Android Pad? Have you ever been to the OEM factories for Lenovo and ASUS? Quanta, Compaq … factories of other companies are all worse than those for Apple. Not to buy iPod – (do you think) I will buy Aigo, Meizu? Do you know that Aigo’s Shenzhen factory will not pay their workers until the 19th of the second month? If you were to quit, fine, I’m sorry, your salary will be withdrawn. Foxconn never dares to do such things. First, their profit margin is higher than peers as they manufacture for Apple. Second, at least those foreign devils will regularly audit factories. Domestic brands will never care if workers live or die. I am not speaking for Foxconn. I am just speaking as an insider of this industry, and telling you some disturbing truth.” via Caixin

• “By the way, construction workers and farmers are also living a harsh life in China, shall we also boycott housing and grains?” – Zhou Zhimei

Read more from the people who know here.

[Thanks to MacDailyNews Reader “Carl H.” for the heads up.]

Related articles:
Apple CEO Tim Cook calls New York Times supplier report ‘patently false and offensive’ – January 27, 2012
In China, human costs are built into iPads and tens of thousands of other non-Apple products – January 26, 2012

41 Comments

      1. @ Jubei et al: to answer your question: relatively few. Don’t assume that everyone is as closed-minded as that.

        It’s long overdue for ethical trade policies to halt the abuses of the “unstoppable” manufacturing tide flow to China. China has no inherent economic advantages: it’s just building infrastructure; we already have it built. China is just educating their workforces to be more than brainless assemblers; we have machines that are precise & efficent than any human AND well-educated humans that can solve problems on-the-fly, not to mention the best universities on the planet.

        What China has is a _political_ advantage over the democratic world. In a democratic republic, the people in the end decide in what kind of conditions they wish to live. In communism, the oligarchy decides. It doesn’t take a genius to see that the modern corporations have chosen to bed with communists rather than support the democratic republics in which the corporate executives live.

        That, in short, is the problem. Economic treason by the majority of international corporate officers supports communism, against everything for which patriots of freedom fought and died in most of the conflicts & revolutions of the last 250 years. Your forefathers did not fight to defend a low price for imported gadgets. That is not freedom. Now taken for granted, free citizens are selling their legal freedom and future economic prospertity to buy more disposable junk. They think Wal-Mart is making them richer because they ignore the number of decent jobs that have been transferred to China and are now essentially sweatshop jobs. We feel coddled by the most bloated military establishments on the planet — and we ignore the obvious facts that the military industrial complex which is significantly to blame in driving up deficit spending to unsustainable levels has consistently proven ineffective against guerrilla warfare for the last 50 years. Aside from genocide missions, high-tech weapons are next to useless without accurate human intelligence.

        No matter, at the present rate, China and communism will soon be the only viable economy left on the planet, and the “free” citizens of the former first-world will find themselves working for them. The first-world unemployment rate can’t be held down the people (a governments) have already allowed corporations to outsource both work and wealth — and now have tricked citizens to mortgage their economic futures to prop up the standard of living that was marketed to them in 50 years of glossy advertisements. Give it another generation or so.

        If you have no guilt in supporting corporate oligarchy, then you’ve not considered the path which our short-term greed eventually takes us. Sorry to bust your bubble. Big complicated concepts like trade deficits and global climate are easy to ignore when there are so many fun short-term distractions to hold you back dealing with long-term reality today.

        Trade with China needs to be balanced, and that means new trade regulation. Corporations need to learn that they serve the people, not the other way around. Produce goods anywhere you want — but if you sell them here, then tax them highly if they are manufactured without international first-world standards of environmental or labor protections. Make corporate officers personally liable.

        I think Apple is better than most corporations, but i am extremely disappointed that Apple is not leading the way toward economic and environmental justice.

        When a Foxconn worker has the ability to realistically buy an Apple product, Tim, please let me know.

        1. Very well put. Of course Apple is not unique in using authoritarian high-tech sweat shops; that has become the rule in electronics as in many other industries. Apple is unique only in that they are currently making more profit from this system than any other company in the world. Apple and Wal-Mart are now the two western corporations that have the strongest economic interest in the continuance of China’s authoritarian labor relations.

          It would take a uniquely courageous CEO to fight against the very system that is making his company fabulously wealthy. Unfortunately, that’s one type of courage Steve Jobs never showed, and there’s no indication that his successors will be any different.

  1. New York Times also claims that North Koreans are starving because they eat nothing but pickled cabbage and rice. Of course rice and kimchee is the national dish, same as South Korea.

    1. I believe they are starving because they don’t have any friggin’ pickled cabbage and rice to eat in the first place. I’ve read that some have tried to survive on grass and leaves, like some kind of herbivore.

      Too bad someone doesn’t have the guts to kill that fat toad now in power. Of course, the military wouldn’t give up their control anyway. Sad.

    1. Singling out the NY Times for this wretched story is like those who are singling out Apple. If you have an agenda, you’re going to be reckless with the truth (and not credible). There are many Apple=haters and other media who are jumping on this. The article could’ve originated anywhere- it’s not necessarily reflective of the Times overall. In fact, with all this hysteria, I’m practically inclined to drop half my friends and stay offline, I’m so disgusted. Other than the Times-bashing, this MDN story and the comment sthat the Times published even if buried was a nice pick-me-up for the day.

    2. Have the NYT with its holier-than-thou selective research, the American bleeding hearts community or the critics pointing their sanctimonious fingers look at the working conditions and exploitation of immigrant workers right here in good, ole squeaky clean America? These are even worse than those found in China. NYT is selective, mischievous and bias in its reporting. Once a fine newspaper, but have fallen on bad times, NY has now turned to yellow journalism in order to generate page-views. Pathetic.

  2. MDN Take, what do you mean “is”?

    NYT been fish wrap ages ago. Especially when we need the BBC to report news the left press just won’t touch and have to find out the John Edwards affair from the National Enquire! The NE for Heaven’s sake!!!

  3. These stories are very unfair to Apple, there’s no question about that.

    However, that’s not to say there is no indictment on the industry here. That should be the real story.

    I do wonder with Apple’s profits and the “make it at home” attitude that is catching some some mindshare in the U.S. right now would put Cupertino into a position to actually do some of it. There will never be a time (or very long from now) that an entire electronics widget will be made in the U.S., but more than any other company perhaps Apple could be the one that has the greatest percentage of components built here.

    It would also be interesting to see what certain consumers would be willing to pay for a device that is entire built in the U.S. Maybe there should be could be an iPhoneUS that costs more . . . I’m fortunate enough that I could probably pay more for my devices.

    These are ideas that Apple could do. I would not support the government dictating these things . . . public opinion, however, can be powerful and can also be used to serve a smart company like Apple’s favor.

  4. I’m an Apple guy and always have been. They’ve earned my loyalty by making better products than everyone else. If they deliver less than excellence, I don’t say “Well, everybody else puts out mediocre stuff, so I’ll cut Apple some slack.”

    I think we should apply the same standard here. Maybe Samsung’s contractors pay their workers less than Foxconn does, but that doesn’t mean Apple shouldn’t do more. Fortunately, I think they’re trying to — membership in the FLA, posting a list of their suppliers to the Apple website, etc. Hopefully Apple will use its clout as a buyer/customer to ensure that its suppliers/assemblers continue to improve their labor practices.

  5. That the problem with US people. They always think themselves as standard, and anything lower than them is bad. Don’t you ever think that they live normal and yours are too spoiled?

  6. The real and growing problem here is the threat to our national security. The idea that we couldn’t create the infrastructure to support a domestic capacity to fulfill our demand for electronic wizardry for years does speak to a role fore the government to foster policies that could change this.

    Without the the infrastructure to meet our production needs in a time of international conflict we are crippled. The bailout of Detroit wasn’t just a good idea to save jobs. With the continuing conflicts around the globe we lose influence if we are dependent. The fact that we could do it without “you” is the only way we can influence “you.”

    Why have we been powerless to affect positive change in the middle east? Yes we can spend our fortune being the worlds policeman but is that the best use of resources? The Arab spring is a byproduct of global communication. The improvement of Chinese living standards is as well. I’m glad we wrapped the globe in fiber optics. I’m glad our demand for gizmos is allowing a company like Apple to demand wage doubling and other improvements in human rights.

    My concern though is that as we become totally dependent we lose the leverage to be a force for positive change. If Foxcon is really going to invest in a million robots that make the rising cost of labor in China a non factor I’d rather see Apple choose to support a domestic company make this happen stateside.

    The problem as Jobs stated it to Obama is that we no longer have a sufficient supply of engineers and a culture that allows a call to go out at midnight that results in our production capacity to be retooled by morning. We still are amongst the worlds best educators of the talent to do this.

    The problem in my view is that as we have moved to a global labor pool we are slashing away at our own middle class. Without the prospect of making a sound and improving wage people don’t consider it fair to have demands placed

    1. Actually, the US’ security is better served by trading with partners who then become dependent on US business.

      Just how long would the Chinese economy last without crashing if it suddenly lost US business – like if we got into a shooting war with them?

      The truth is that world security is best served by networking all nations into a world trading network where all nations are dependent on the rest – then nobody has an incentive to rock the boat. You’ll notice that the countries most likely to get into mischief are the ones with few economic links to neighbors and the major powers. Not universally true, of course, but generally so.

      China’s economy is as intertwined with ours as ours is with theirs – a lot of parts, including steel – that are used in their manufacturing processes come either from the US or from other countries outside of their sphere of influence, reducing their incentive to burn their bridges with reckless diplomatic activity.

      Don’t get me wrong, their Communist Party is still determined to increase Chinese influence, but that effort is now much more focussed on economics and economic espionage than it used to be on military efforts.

      In general, the world is becoming a more civilized place – with the obvious exceptions – and that is forcing even the worst players to change their tactics.

      They are beginning to figure out that it is bad manners to shoot at your business partners, it tends to piss them off and get orders cancelled!

    2. ‘ We still are amongst the worlds best educators of the talent to do this.’

      A lot of these people we’re educating at our top colleges are going back to their own countries after buying their education here, while our grade schools are turning out lots of young people who can’t do math or speak proper English etc..

      We need to concentrate our education efforts on our own best and brightest – no matter how poor or rich they are.

  7. Sooner, rather than later, Chinese labor will price it’s way out of a job.

    The USA lost the jobs to Japan first. The Japanese lost electronic assembly to Taiwan and Korea. Taiwan and Korea are in the midst of losing it to mainland China.

    India and Brazil are waiting in the wings for their turn. It is inevitable. Labor wants more and more and eventually a manufacturer looks for greener pastures.

    Power to the people. Power to make themselves unemployed. We live in a global market.

    You want things the way they use to be, buy a DeLorean and search the net for a Flux Capacitor.

    1. How soon is “sooner”? There are no signs of weakness in the Communist Party’s power over the people. So rather than reward work excellence with increased wages, each worker is disposable. Wages thus only go up when they have a shortage of people to fill holes in the assembly line. I’m not foreseeing that happen in my lifetime.

      On the other hand, transportation costs may impact long-distance trade, making the few uncorrupted South and Central America countries prime location options for economic servitude for empirical corporate oligarchs.

      If the WTO had teeth or balls, significant unemployment in the world would immediately be eliminated by making it an international standard that the highest-paid person in a company cannot receive total compensation greater than 50x the total compensation paid to any employee or subcontractor thereof anywhere in the world. Suddenly corporate officers would have to stop and question their destruction of the middle class while holding 6 billion people on the planet down in poverty. Pay a man a decent FAIR wage, not a “prevailing local wage” insufficient to build a future for one’s family.

      1. Mike! Are you the same Mike I met at one of those tent villages in the park that ‘Blame everything on the 10 per centers’ and Wall Street?

        You really believe in small c comunism, don’t you. Everyone works in the veggy patch so everyone gets the same number of carrots. It doesn’t matter if one person in the comune bought the seeds from money in his life savings, did all of the planting, most of the howing and harvesting and another just contributed his share of the human excrement fertilizer.

        The person most responsible for keeping everyone alive gets the same as everyone else. No more 10 percenters.

        Without the entrapanure, there are no jobs. Seriously, without Steve Jobs there is no Apple.

        In fact, that should be the CEO answer to the tent village idiots.

        WITHOUT STEVE JOBS THERE IS NO APPLE!

        Even the assholes in the tents can understand that.

        1. I played high school football in Florida. My senior year, we were considered one of the best teams in the country. We outscored our opponents 500 to 160, but we lost in the state playoffs to the team that eventually won the title. They ran the wishbone with a backfield that included John L. Williams and Darryl Oliver, both of whom went on to play in the NFL.

          That year (and my junior year, too) I received my team’s “101 Percent Award,” the significance of which should be self-explanatory. I played defensive end but only weighed 165 pounds and ran a 5.2 40-yard-dash. Believe me, no matter hard I’d tried, John L. Williams and Darryl Oliver would have gotten the better of me.

          My point is this: Not everyone can be a Steve Jobs. Doesn’t matter how hard they try, some people’s abilities are limited by who they are, just as my 5.2 40 was always going to be several steps behind the 4.4 that Williams and Oliver ran.

          The moral measure of a society isn’t the number of Steve Jobs it produces, but how it supports the folks who can never be Steve Jobs but who work hard and do the best they can with what they’ve got.

      2. Oh yes, the question, ‘How soon is sooner.’

        Outside provocateurs are trying to get higher wages for Foxxcon employees ‘as we speak’.

        It won’t take much of an increas in wages, especially if China puts a more realistic value on it’s currency, for the many companies that use Foxxcon to demand a move to a cheaper India.

  8. Joan Robinson, a Cambridge economist once wrote, ” the misery of being exploited by capitalists is nothing compare to the misery of not being exploited at all”.

  9. It’s important to remember that Foxconn is building a massive factory in Brazil right now, presumably to build more iPads for Apple. So the diversification of labor — away from China — for the assembly of electronics is already underway.

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