Relations between Apple and China are more than ever in the spotlight, as Tim Cook makes his third visit of the year to the Middle Kingdom. The CEO of Apple is participating in a crucial summit bringing together more than 20 international business leaders, in a particularly tense geopolitical and economic context.
A strategic summit in a delicate context
Tim Cook traveled to Beijing to attend a five-day supply chain conference, alongside Chinese Premier Li Qiang. This meeting, which brings together leaders of large companies such as Rio Tinto, Corning and Lenovo Group, comes at a crucial moment. Donald Trump’s victory in the American elections raises the threat of new trade tensions, notably with the possible announcement of increases in customs tariffs on Chinese products.
Apple and China: mutual dependence
During his visit to the China International Supply Chain Expo, Tim Cook did not fail to emphasize the capital importance of Chinese partners for Apple: “I value them enormously. We could not do what we do without them.” This statement is not trivial when we know that Apple has around 200 major suppliers, more than 80% of which produce in China. The majority of iPhones are assembled in the country by Foxconn.
The challenges of prudent diversification
Faced with geopolitical uncertainties, Apple is pursuing a strategy of gradual diversification of its production chain towards other countries such as Vietnam and Indonesia. However, this transition is being carried out cautiously to maintain the balance of relations with Beijing. China represents Apple’s largest market after the United States, and Cook’s last visit to the country last month brought promises of new investments.
This meeting, which lasted more than an hour, would however have had a fairly formal character according to some sources, without in-depth discussions on specific plans. Chinese Premier Li notably cited Adam Smith on human nature and its propensity for trade, while inviting leaders to give him their feedback; proof is that China needs investors, and Apple is obviously a partner of choice.
