Dan Blumenthal and Ian Jones
In Apple in China, Patrick McGee, a veteran Financial Times journalist, provides a sobering and meticulous account of how Apple's pursuit of scale and profit helped fuel the meteoric rise of China's techno-industrial power. Ultimately, Apple outsourced not just production, but national leverage.
McGee compares Apple's total investment in China—through capital, supplier development, logistics, and ecosystem support—to over twice the inflation-adjusted cost of the Marshall Plan that helped rebuild Western Europe after World War II. According to internal documents, Apple was investing up to $55 billion annually in China by 2015. In 2016, Apple CEO Tim Cook pledged $275 billion over five years—more than all American and Canadian investment into Mexico from NAFTA between 1993 and 2020. By comparison, the United States' supposedly "generational" federal investment in the semiconductor industry—the CHIPS and Science Act—will cost taxpayers $52 billion over four years.
But, while the Marshall Plan rebuilt democratic allies, Apple's version helped turbocharge an authoritarian competitor. Apple helped build railways, power infrastructure, specialized tooling, and entire cities around assembly lines. All of this enabled a level and precision in Chinese manufacturing that no other Western firm could match. As McGee states: "What Apple was doing was akin to making 10 million Ferraris a year." Apple's plan was not simply about cheap labor, but China's unmatched capacity to coordinate state-backed infrastructure, training, logistics, and scale.
Apple implemented a form of contract manufacturing that McGee dubs the "Apple squeeze." Apple products demanded novel components, cutting-edge techniques, rapid scale, and stringent quality control. To achieve this, Apple embedded designers and engineers into its manufacturers, training and co-inventing with them. Apple "squeezed" suppliers for low-margin high-volume output. In turn, suppliers gained valuable know-how that it could use to win contracts from other clients. Taiwan features prominently in McGee's tale. Foxconn, a Taiwanese firm led by Terry Gou, was the key intermediary that allowed Apple to scale in China. Gou emerged as a figure who combined industrial savvy with a disregard for the risks of building China up.
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