Foxconn/Hon Hai Precision Industries manufactures Apple products but cannot claim a major share in the profits from their sale, since Apple holds the intellectual knowledge and property rights. Roughly, Apple gets 31% of the profits from an iPhone sale, Foxconn less than 2%. It's the "most valuable company in the world" for a reason.
Apple's valuation also underpins a 10% chunk of NASDAQ and a big share of US retirement portfolios. Plenty of ammo to use there.
The reality is that phasing out Apple with domestic competitors will bring a lot more money back to China.
News of the ban comes right ahead of an Apple event next week, at which Apple is expected to launch a new line of iPhones and other Apple products.
Apple’s preferential treatment by China thus far is less to do with profits or even employment (the number of workers they employ in China, while large by most standards, is really nothing by Chinese standards), but rather about the political clout Apple has with America’s leading political class.
People keep harping on about how America ‘allowed’ China to catch up, but that’s just plain coup and assigning waaay too much credit and power to the US.
America didn’t take its eyes ‘off the ball’ when it comes to China. It has been obsessively paranoid about China and going out of its way to screw with China since before it was even a country. America was looking to regime change China even in 1989, when the Cold War was still going strong and China was supposed to be America’s ally.
While there was certainly an element of good fortune that dragged America’s attention away from China from 2001, but China has also worked tirelessly to use America’s greed against it to divide their leaders and disrupt their plans to sabotage and attack China by making it too profitable to do business with China, and too expensive to not to.
But today, too much damage has already been done to that symbiotic relationship that not even Apple can do much to dissuade America from the directly confrontational path it is determined to go down. As such, there is less and less value for China to continue Apple’s preferential treatment. Especially when it is working every more closely with America’s intelligence apparatus.
As with most things, America’s gleefully promoted stereotype that Chinese are greedy and puts profits above national interests is more projection than truth. While their indeed plenty of greedy Chinese people who would gladly sell out their country for wealth and riches, China’s political selection process, especially after Xi’s purges, are very effective at weeding such people out and ensure they never climb too high in China’s power structure, and thus can limit the damage they can do. In America, greed is good, and corruption is not only legalised as ‘campaigning’, it’s actually the real full time job of American political leaders. Running the country and doing the jobs they are elected to is actually the side-hussel.
... Because they can track down a soldier in a jungle or something like that.
