Apple: The Leviathan in US-China Economic Ties
Apple CEO Tim Cook posing for a selfie in Beijing. Source for Photo: CNN.
As a consequence of technology allowing rapid connections across the globe, multinational companies like Apple are gaining greater influence than national governments, and geographical borders are becoming blurred. Apple’s CEO Tim Cook recently stated that his corporation enjoys a symbiotic relationship with China. This portrays a markedly different relationship than the increasingly hostile one the United States currently has with China. The two nations have been feuding over spheres of influence and control over resources as the U.S. tries to keep up with China’s One Belt One Road initiative across regions of Asia, Oceania, Latin America, and Africa. Further, the Chinese hot air balloon that flew over U.S. airspace in February was suspected of taking surveillance and led U.S. Secretary of State Anthony Blinken to reschedule his visit to China. The U.S. has also considered Chinese corporate actions to be a national security threat, with an ongoing FBI investigation that may result in a national ban on the Chinese-owned video platform TikTok.
Cook appeared at the government-sponsored China Development Forum last month just twelve hours after TikTok CEO, Shou Zi Chew, testified before the Congress of the United States. It is clear that multinational corporations (MNCs) like Apple are not restricted by diplomatic relationships, and international supply chain decisions dominate the discussion in the political environment surrounding them. While Cook’s appearance and comments at the development forum suggested an outward show of approval of China as a manufacturer and market for Apple, the company has been looking to move production out of China and instead into India and Vietnam. This may be the result of China’s zero-COVID policies that have hindered Apple’s manufacturing in the region as well as the protests that have erupted around them. This past November in the city of Zhengzhou, better known as “iPhone City” by locals, violent protests resulted from withheld pay and zero-Covid factory lockdowns. Foxconn, one of Apple’s contracted manufacturers, was then forced to offer workers large bonuses up to $1,800 in order to retain its plummeting employee base after the protests and worsening working conditions. However, even if Apple extends another branch of its supply chain into India, which Cook calls a “hugely exciting market,” the manufacturing infrastructure Apple has established on Chinese soil will not be abandoned anytime soon. In fact, over 95% of Apple products such as iPhones, AirPods, macs, and iPads are fabricated in China. This has made China inextricably bound to Apple’s success, as well as making any threat to the access of China’s workforce a threat to Apple.
As we predict the future of US-China relations, it is impossible to exclude Apple from the equation. Apple became the first company to be worth $3 trillion in 2022, a figure greater than the GDP of the United Kingdom. Further, the company employs more than 2.7 million Americans, and is committed to investing $430 billion into the U.S. economy in a five-year plan launched in 2021. In North Carolina, Apple will be constructing a new engineering hub in the Research Triangle area that is estimated to create 3,000 new jobs as well as contribute $100 million to public school systems in the process. The global presence of Apple is unprecedented and it would be naive to believe that Apple is anything but the largest factor influencing future U.S. economic policy with China. Recognizing this absorption of society by the economy can help us to conceptualize how MNCs have such a strong voice in politics and a large effect on decision-making.
Yet, this is only one example of how enormous retail supply chains are taking control over the political climate in international relations. Whose agenda do we want dominating decisions on U.S. foreign policy, a corporate one valuing profit over humanitarian standards or one that puts people and their security first? Apple and other MNCs, including Walmart and Amazon who are making disproportionate contributions to the national economy, will continue to command U.S. foreign policy if the government is not able to implement sufficient checks on their power. In order to do so, legislators cannot continue to act retrospectively, leaving corporate plans unfettered until disaster strikes. We have seen this trend many times, most recently in East Palestine, Ohio when the train derailment on February 3rd sent dozens of cars off the tracks. This resulted in a hazardous chemical spill totaling 1.6 million pounds of carcinogenic industrial waste products such as vinyl chloride contaminating the soil, air, and waterways of the town. Rather than asking how this can be cleaned up, we must ask how this happened in the first place? Norfolk Southern, the $40 billion dollar train company involved in the incident, has been successful in lobbying against the enforcement of new technologies allowing electronically controlled pneumatic braking for the past 15 years. The railway has been flying under the radar using 1868 braking technology in the 21st century to increase corporate margins and cut costs.
Policymakers must act now and take proactive action in order to prevent corporations like Apple and Norfolk Southern from lobbying for US policy to reflect their own profit-driven standards. These unjust business practices, both domestically and abroad, will only lead to more protests and damaged communities if the government does not engage in necessary humanitarian oversight.