What began as Trump administration pressure on American companies to boycott specific Chinese entities has since become a concerted effort to press non-U.S. suppliers to move production out of China.
Lauly Li and Cheng Ting-Fang for Nikkei:
The idea of unpicking the sophisticated tech supply chain that has grown up in China over the last two decades would have been unthinkable just two years ago. But pressure from the Trump administration has made this a reality, with companies from Apple to Google decamping from China to Vietnam, India, Thailand and Malaysia in the last 36 months…
A number of the biggest companies are doing their best to straddle the widening chasm between Beijing and Washington, in an effort to avoid picking a side. Apple, for one, has adopted a two-sided strategy to balance itself from the tech war. While it has been pushing suppliers to accelerate their shift away from China since late 2018, it has also been aggressively cultivating Chinese homegrown suppliers to play a more important role inside China, and secure continuous access to the 1.4 billion strong market.
With Apple’s consent, Taiwan’s Wistron sold its iPhone-assembly factory in the Chinese city of Kunshan this summer to local rival Luxshare Precision Industry. The handover was significant: It paved the way for the Chinese supplier to move up the Apple supply chain, fueling hopes that it could become China’s equivalent of the Taiwanese Foxconn, a giant of tech manufacturing. China’s Lens Technology also bought iPhone casing factories from Taiwan’s Catcher Technology, a longtime Apple metal casing provider, in the city of Taizhou in August.
“Apple has always been cultivating Chinese suppliers. The rationale behind this used to be that it gave Apple more price bargaining power against the existing suppliers, but now it has also become a strategy to diversify geopolitical risks,” said an executive-level source familiar with Apple’s thinking.
MacDailyNews Take: As Confucius said:
Study the past if you would define the future.
To be wronged is nothing unless you continue to remember it.
An oppressive government is more to be feared than a tiger.
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