How China Built ‘iPhone City’ with Billions in Perks for Apple’s Partner

Beyond iPhone in China, I have a larger question. Let's say I were building product in the US with child labor in unsafe conditions not adhering to US laws and regulations. Would I be allowed to sell that product in the US? Probably not. If I were doing similarly around the world then seeking to sell that product in the US, it happens to be the case that I could. Why is that the case? Why is it that product built in foreign countries that do not adhere to US laws and regulations on manufacturing and labor are allowed to be sold in the US?

&gt;Apple manages to earn 90 percent of the profits in the smartphone industry worldwide, even though it accounts for only 12 percent of the sales<p>That figure is astounding, that every other smartphone manufacturer shares only 10% of worldwide profit.

&gt;<i>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...</i><p>So, Apple&#x27;s high profits depend on a whole lot of government subsidies in China. And then Apple takes that cash and protects it from US tax rates by storing it in Ireland. And now, some interesting questions are raised about the legality of that tax scheme.<p>Maybe the US doesn&#x27;t need more businesses like Apple.

The number that got me was it takes 350,000 people to make 350 IPhones a minute.

&gt; In China, the competition for companies is ... often focused on manufacturing partners, rather than multinationals themselves.<p>This article doesn&#x27;t include the word &quot;unemployment&quot; which is the reason for this focus. Though the official unemployment rate is 4%, the real rate is believed to be at least 12, not counting the non-existent migrants who aren&#x27;t legally permitted to travel due to the hokou system.<p>(I am always astonished when I hear that China is supposedly &quot;beating&quot; the US: by what possible metric could this be true?)

Foxconn is far, far more than just iPhones or just Apple.

They&#x27;ve put pretty typical Apple-esque levels of effort into the entire chain, including financial shenanigans that got them in trouble with the EU. It&#x27;ll be interesting to see whether they can make good on their promise to onshore some of their manufacturing.