China Threatens Apple With "Anger And Nationalist Sentiment" If It Doesn't Share The Wealth

With China having effectively exhausted the amount of US imports on which it can impose tariffs following the $50BN in tariffs slapped in June, and announcing last Friday that it is considering an additional $60BN in retaliation to Trump's $200BN in incremental Chinese tariffs, the focus has shifted to how else China can hurt the US, aside from simply cranking up the tariff rate.

Of course, China has previously hinted at what it could do, first in March...

... and then again in April.

However until now, a Chinese retaliation against the world's most valuable company was merely floated in big picture terms and these were simply veiled threats, with China refusing to stray too far from the hypothetical.

That changed today, when an article in the state-run People's Daily set its sights squarely on Apple, which it said has benefited from cheap labor and a strong supply chain in China and needs to share more of its profit with the Chinese people or face "anger and nationalist sentiment" amid the ongoing trade war.

The article notes that Apple recently reported that in the quarter ended June 30, sales to the greater China region rose by 19% to $9.6 billion and summarizes that "amid escalating trade friction, the company's better-than-expected quarterly result in China was a major reason for the surge in its shares."

However, in a tongue-in-cheek rhetorical question that is really a hint to the public, the Daily said that "the eye-catching success achieved in the Chinese market may provoke nationalist sentiment if US President Donald Trump's recently adopted protectionist measures hit Chinese companies hard."

As a result, should the trade war between the U.S. and China continue, it would leave Apple and other U.S. firms with substantial Chinese revenues vulnerable as "bargaining chips" for Beijing.

Th Daily then doubled down on its worst-case "hint", warning once again that China is by far the most important overseas market for the US-based Apple, "leaving it exposed if Chinese people make it a target of anger and nationalist sentiment" and while it claims that China doesn't want to close its doors to Apple despite the trade conflict, "but if the US company wants to earn good money in China, its needs to share its development dividends with the Chinese people."

The suggestion is that Apple will have to either hike domestic wages, invest more in China, or - best of all - share its technology with Beijing. If it refuses, China's population has a green light to "make it a target of anger and nationalist sentiment."

While Apple has so far escaped unscathed by the escalating trade war, and contrary to our expectations, nationalist sentiment has not emerged pushing the local consumers again purchases of US goods, today's Op-Ed may be a turning point, because for the first time China hints it is time to spread the wealth. Specifically the People's Daily author writes,  the "in an increasingly interconnected world, Apple is a particularly good example of global manufacturing." And the role of China is critical "as it serves as a key production and processing base for Apple."

Many Chinese companies have been included in Apple's production chain to provide parts and components or assembly work. This has allowed Apple to benefit from China's ample supply of cheap labor.

And now, it's time to give back because "in the case of the iPhone" the article claims, "Chinese processors only get 1.8 percent of the total profits created by the device."

Hint: it's time for Apple to give more if it doesn't want something unfortunate to happen to its record profits.

Apple's contribution to job creation in China is notable, but the company enjoys most of the profits created from its Chinese business. It is impractical and unreasonable to kick the company out of China, but if Apple wants to continue raking in enormous profits from the Chinese markets amid trade tensions, the company needs to do more to share the economic cake with local Chinese people.

And finally, it appears that China has figured out that the best way to retaliate against Trump's trade wars is not a tit-for-tat escalation in tariffs, but to hit America where it really hurts: the shareholders' bottom line and the stock market.

The trade conflict initiated by Trump administration reminds China to re-examine China-US trade. It seems US companies doing business in China are the biggest winners from China-US trade. The Chinese market is vital for many top US brands, giving Beijing more leeway to play hardball in the trade conflict.

And just like that, China became a Democrat's best friend, and an honorary foreign leader of the #Resistance.

Comments

ThirteenthFloor dark pools of soros Tue, 08/07/2018 - 16:53 Permalink

If you’d been following closely Apple is moving back to US manufacturing with Trump’s gratitude

Nextgen computers in Arizona

https://www.cnet.com/news/apple-to-build-made-in-the-usa-manufacturing-plant-in-arizona/

Chips in NY and San Jose fab facilities 

https://iphone.appleinsider.com/articles/12/12/12/top-secret-plans-for-upstate-new-york-chip-factory-may-involve-apple

Displays in Wisconsin

https://www.reuters.com/article/us-apple-foxconn-wisconsin-idUSKBN1AB258

and in total 5000 new jobs domestically. All based on tax repatriation bills by Trump, who recently met with CEO Cook.

i guess that would piss off China.

In reply to by dark pools of soros

lock-stick Adolfsteinbergovitch Tue, 08/07/2018 - 23:50 Permalink

It's all ONE SICK, PATHETIC SPAMMER!!!

•• roea.rita (above)

•• Adolfsteinbergovitch (above)

•• Sanctificado (above)

•• Free This (coming soon, in all his 7th grade glory - JACKASS  as new icon!)

....and all the while, the pathetic little SPAMMER sits in his leaky, moldy, smelly single wide in Western New York, surrounded by garbage and dirty clothes, trying to find his dick amidst rolls of fat, talking to his ACTION FIGURES and wondering where his life went.

 

It's all ONE SICK, PATHETIC LIDDLE SPAMMER!!!

In reply to by Adolfsteinbergovitch

Endgame Napoleon wee-weed up Tue, 08/07/2018 - 16:41 Permalink

That’s what US citizens have to eat—cake crumbs—when they are not womb-productive illegal aliens, working cheaply for US employers while consuming food stamps and other welfare. China’s pretty cheeky. Apple Inc. was created in the USA, with the United States Government providing quite a bit of the research capital that went into developing the technology, yet most of the jobs went the country of China. America also lost the contributions to the Social Security retirement fund that would have been made if American citizens had made the phones, which are not cheap to cash-strapped American consumers. But China wants more. They sure do have a lot of leverage with American employers. Not so for American citizens who are now—due to the motherload of cheap labor in the world—100% expendable to US employers, and wages have been falling for 40 years, as rent rises and rises. 

In reply to by wee-weed up

earleflorida JibjeResearch Tue, 08/07/2018 - 13:25 Permalink

it's rather ironic, and [amusing] that Capitalism, Socialism, and Communism all suddenly emerged in the post-Feudalist WORLD's lexicon after all EUROPE was sorted out for the Industrial Age circa. ~1850 to present?

was it always meant to be the Good, the Bad, and the Ugly, or was it to evolve into a homogenized NWO...

seems we have no choice at the current crossroads of a NUCLEAR Holocaust, aka. the preeminent 'Jewish Armageddon' : Location-- Jerusalem   

In reply to by JibjeResearch

shortonoil GoldHermit Tue, 08/07/2018 - 12:35 Permalink

Didn't we recently hear something about sharing from some Saudi Punk Royal Highest. If Apple sticks to China it will get its ass handed to it in a Chinese hat. Any manufacturer losing money in a foreign market at this point of the game needs new management. Trump isn't sending in the Marines to bail out Apple. Suck it in and bring it home while there is still something to bring!

In reply to by GoldHermit

Everybodys All… GoldHermit Tue, 08/07/2018 - 13:00 Permalink

Now that the Apple sellout is out in the open isn't it about time that we all admit that the democrat party has sold itself out to the Chinese communists as well? Its not just Dianne Feinstein.

Apple sent all of their password codes to China a few months back. Cut the iPhone cord now or you are simply choosing the communist Chinese styled tyranny and censorship.

In reply to by GoldHermit