Apple will leave China, but it will take years

At one time, the Celestial Empire was an excellent place to create production facilities for any project.

The Chinese government has opened the way for foreigncompanies, provided acceptable working conditions, and allowed direct investment. There are a lot of people in the country, it is possible to create projects on a global scale, the management is centralized, that is, people are disciplined, the standard of living is low, and this means that the salary fund will not eat up much. And companies from all over the world flowed to China as if to Mecca, the country rose from poverty and grew to become the second economy in the world. And the time has come when it is no longer possible to pay Chinese workers meager wages; working conditions have to be improved. The benefits somehow quickly began to disappear. Economic disputes between the US government and the Chinese government and mutual sanctions add fuel to the fire.

Apple is losing

Last week was marked by Trump's statements.with respect to the Celestial Empire, the prospects for foreign trade policy brought down US funds, shares of many American companies in the technology sector sank slightly. In addition to his readiness to increase duties on goods from China, the president called on large companies to leave China. At the same time, Apple affected all this quite strongly, because most of the company's production is in China. Shares of Cupertin's technology giant dipped 4.6 percent. It went to other companies that use production facilities in China. This went to AMD, NVIDIA, even Intel, but a little less - the share price dipped by 4 percent.

As for Apple, if contractors followrecommendations of the US government, the outcome will take a lot of time, only the most mobile production will move a year and a half. Experts estimate that transferring only 10 percent of the company's production from China to India, as well as Vietnam, will take a couple of years, 20 percent of the move will take three years, half of the production will take five years.


It’s worth remembering that in productionThe iPhone in China employs about one and a half million people, and all of them are trained and qualified. How much time will it take to train more than a million new staff, and how much money will it take? It is unlikely that Foxconn will accept such costs, because they will have many orders without Apple, so the American company will have to sacrifice, but it also has no interest, sales sag for more than a quarter in a row, the company clings to everything to maintain the former rate of return.

Apple CEO Tim Cook regularly on the subjectholds meetings with the US AP, but so far has not negotiated any preferences, so there is no help from the state to return the production home. Unless Apple will play in the vicinity of the election, and Trump will change something. By the way, Foxconn has been experiencing considerable discomfort for some time due to the fact that almost all capacities are concentrated in one country - China. Now Celestial, it is a stronger economy, it is a strong trade union, had to raise salaries, improve social security. Looking at this, the Korean giant Samsung chose to settle in neighboring Vietnam with its smartphones, so the trading wars practically did not concern this company.