The other day I thought it was time to upgrade my Apple desktop computer. Now I know that Apple produces most of its products in China. However, I read that the top of the line Mac was being built in Austin, Texas. So I considered ordering this new computer. Upon further research, I discovered that as of 2020, Apple no longer produces any product outside of China.
To see what Apple has achieved, we have to look at the iPhone 11 Pro Max 64 GB model. While it retails for $1099 US, it costs $390 to manufacture (Source: Bank My Cell industry research). So Apple has a profit margin of approximately 65% on every iPhone it manufactures.
Today, Apple is worth 2.1 trillion dollars. Try to get your head around that. If Apple were a country, it would be the eighth largest in the world, just ahead of Italy. You could argue that Apple is not a US company, but Chinese. While the company headquarters is in California, its whole supply chain is in China. All the parts; gaskets, screws, chips, cabling are in adjacent factories to the Apple plant and the thousands of engineers needed to oversee production, are right there working 24/7.
In China, it took Apple 15 days to source 8700 engineers who would oversee iPhone production. In the US, the process would have taken nearly a year. Industry experts say that China now has the infrastructure that America does not, and it’s not just Apple, but virtually every company now that is locked to production in China. Go into a hardware, clothing store or technology centre and everywhere you see, “Made In China”.
People are primarily loyal to their values; companies are no different. Apple and every other company’s bottom line is profit. Their allegiance is not to America, but wherever they can gain maximum profit. Their moral compass doesn’t come into play even though China itself is a ruthless state. The multinational companies appear oblivious to the Chinese persecution of its 11 million Muslim Uighurs.
To see the phenomenal economic power shift in the world, let’s look at how things have changed in the last 100 years. In 1920, the United States was the number one economy, larger than the combined incomes of Britain, France, Germany, Japan, Canada, and several others.
Throughout the 20th century, the US continued to dominate. In the latter part of the century, the world powers decided that it would be a good idea to bring China into the mainstream even though China didn’t renounce its Communist policies. China saw this as an opportunity to increase its wealth and get its people out of poverty. However, they also had a hundred-year plan. Remember, that Communism is ultimately an ideology meant to supplant Capitalism and free societies.
With the opening of China what took place in the 40 years from 1980 onward, was the most remarkable economic growth in history. China’s GDT grew a whopping 15,600%! Today it stands at 15.5 trillion dollars. The USA is still ahead at 22 trillion dollars, but not for long. Charts depicting this economic growth are quite striking.
This year the Chinese will produce more goods and services than the US for the first time, and China has surpassed the US as Europe’s largest trading partner. The Coronavirus originated in Wuhan, China and yet, the only country that has had positive economic growth in 2020 is China.
We gave the Chinese everything they wanted, economic power and retention of their totalitarian political state. They now have a powerful military and no longer are its people just subsisting on meagre wages. China’s middle class is larger than the US population.
What a far cry the situation is to 1980 when I immigrated to Australia. Then Australia made phones, cars, washing machines, refrigerators, medications, and many other products––even some TVs. Today there is not much that we manufacture. Some consider that this isn’t important because we have cheap goods and it doesn’t matter where the product is made. The reality is, that throughout history, countries that are major manufacturers of their wares are the power centres of the globe. Today, even more disturbing, America is dependent on China for some of its military weaponry, creating potentially a national security issue. Some military experts fear that America would not fare well in a war with China.
Because China has cornered most of the world’s drug market, they can hold other countries––including Australia––to ransom. There is recent evidence of how powerful China feels, as it flexes its muscle in places like Australia. Since the Australian Prime Minister and others dared to speak out about China’s involvement in the spread of Covid-19, China has put significant tariffs on several products including barley which will hurt farmers and a 200% duty on wines.
The sad fact is that we need China, they don’t need us. The message is that if we don’t toe the line, they can cut off our supply of not only vital technology but of some life-saving medication. The threat is there not just for Australia, but everywhere as revealed in the book, China Rx: Exposing the Risks of America’s Dependence on China for Medicine.
Western nations must stop their foolish policies of the past several decades of pandering to China. There needs to be a serious and concerted effort to incentivize the manufacturing of goods and services domestically. Otherwise, we are doomed to be lackeys of China for the foreseeable future.
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