How China built ‘iPhone City’ with billions in perks for Apple supplier Foxconn

“A vast, boxy customs center acts as a busy island of commerce deep in central China,” David Barboza reports for The New York Times. “Government officers, in sharply pressed uniforms, race around a maze of wooden pallets piled high with boxes — counting, weighing, scanning and approving shipments. Unmarked trucks stretch for more than a mile awaiting the next load headed for Beijing, New York, London and dozens of other destinations.”

“The state-of-the-art facility was built several years ago to serve a single global exporter: Apple, now the world’s most valuable company and one of China’s largest retailers,” Barboza reports. “The well-choreographed customs routine is part of a hidden bounty of perks, tax breaks and subsidies in China that supports the world’s biggest iPhone factory, according to confidential government records reviewed by The New York Times, as well as more than 100 interviews with factory workers, logistics handlers, truck drivers, tax specialists and current and former Apple executives. The package of sweeteners and incentives, worth billions of dollars, is central to the production of the iPhone, Apple’s best-selling and most profitable product.”

“It all centers on Zhengzhou, a city of six million,” Barboza reports. “American officials have long decried China’s support of its state-owned companies, calling the subsidies and other aid an unfair competitive advantage in a global marketplace. But the Zhengzhou operation shows the extent of China’s effort to entice overseas multinationals to set up production facilities in the country.”

“Foxconn, in a separate statement, said it was grateful for the support of the government, noting that it was ‘no different than similar tax breaks all companies get in locations around the world for major investments,'” Barboza reports. “A growing backlash against globalization puts Apple and other big multinationals directly in the sightlines of two increasingly combative giants: the United States and China.”

“President-elect Donald J. Trump has vowed to bring down the full force of the government on American companies that move jobs overseas, threatening punitive tariffs on the goods they sell back at home,” Barboza reports. “China, under the leadership of President Xi Jinping, is growing less tolerant and more suspicious of Western influence, particularly American technology companies and the huge influence they have over Chinese consumers.”

Tons more in the full article – recommendedhere.

MacDailyNews Take: We’ll soon begin to see how the politics and trade dance between the U.S. and China will play out for Apple.

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


  1. Note: “… American companies that move jobs overseas …” does not include the iPhone. The iPhone was never manufactured in the USA. Jobs assembling the iPhone were never moved because they never existed in the USA.

    People need to pay attention to the meaning of words and sentences.

    1. Agree fully. On the other hand the iPhone created a huge number of jobs in the US – engineers and marketing people at Apple and its suppliers, retail jobs at Apple stores and Apple dealers that have dedicated Apple store within a store spaces and app developers, etc. Oh, I almost forgot the lawyers which Apple had to hire to defend its patents.

      1. Interesting point. There ARE a lot of jobs already due to the iPhone, thousands if not hundreds of thousands when you think of the entire ecosystem. Those folks that had to build out AT&T’s infrastructure (up from 2G)? Yeah. That guy selling cases in the mall? Yeah, him, too.

        Why focus on manufacturing…

  2. China directly holds $1.24 Trillion in US Debt. That would be the government- not individuals.
    Chinese parts make US planes, ships and other critical systems run.
    Chinese components and now complete cars ( a Buick SUV of all things ) come from China. GM makes engines and transmissions for some of it’s ‘made in the USA’ products in China.
    A substantial amount of food you eat comes from or is processed in China.
    Chinese companies control a number of US ports and trucking companies.
    Significant production of Medical Devices, supplies and drugs are sourced in China.
    China hold’s the worlds\’s largest and highest quality supply of Rare Earth Minerals- necessary to almost any high tech anything you can name. The US supply is shuttered and is of lower quality and is contaminated with radioactive mineral content which makes processing much more expensive.

    Donald Trump is like a drunken Truck Driver at a Casino with $500 in his pocket bragging about taking down the house. He is an empty suit with bad hair, a big ego and a big mouth.

    The fact is China can get to space without US components and we cannot. Since the Reagan era we have been allowing critical technologies to migrate overseas and allowing the companies to be bought outside the US. Few American plants have the equipment, workers with the requisite skills or the ability to do some advanced manufacturing using non-Chinese parts or technology.

    A trade war with China would be very ugly and a lot of innocent people would get hurt. Not exactly sure what great benefit would result.

    Then there is the little issue of Paul Ryan. Not sure they get along very well and Speaker Ryan can hold most anything Drumpf wants up in the House. Anything involving taxes, tariffs, or spending has to originate in the House and he controls the Chairs, the Committee assignments, the schedule and can fast track or slow walk whatever he wants.

    Paul Ryan could look at The Donald and ask ‘who’s yo daddy’?

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