This article appears in the August 2025 issue of The American Prospect magazine. Subscribe here.
Apple in China: The Capture of the World’s Greatest Company
By Patrick McGee
Scribner
When Joe Biden’s Department of Justice sued Apple for antitrust violations in late March 2024, Wall Street’s media arms switched into concerned patriot mode. “Why go after … the crown jewel of American innovation?” CNBC host Becky Quick asked Tim Wu, a Columbia professor and intellectual architect of the Biden antitrust agenda. Couldn’t this suit “change the way we innovate, the way we lead?” Forbes cut to the chase, warning the suit would “weaken the U.S. in its strategic competition with China.”
Such appeals to global competitiveness have emerged as a popular rhetorical defense amid Big Tech’s broader antitrust reckoning. Government cases against Apple, Amazon, Google, and Meta, we are told, will make America more like the overregulated innovation backwater of Europe, and allow a surging Chinese tech sector to overtake Silicon Valley. In the Trump era, this kind of “national champion” argument has had some success, as when the administration bullied Canada in June into rescinding a digital services tax that would have put U.S. Big Tech firms on the hook for billions of dollars in retroactive levies.
As Wu pointed out to Quick, this rhetoric misrepresents the role of antitrust enforcement in the innovation ecosystem. But in the case of Apple specifically, a revelatory new book challenges an even more foundational assumption of the national champion argument. In the battle for global technological leadership, we should not assume that Apple plays on the American side.
Apple in China: The Capture of the World’s Greatest Company, by Financial Times reporter Patrick McGee, is “the first major history of Apple in the 21st century,” and the first-ever history focused on how Apple has manufactured its revolutionary products. Drawing on interviews with over 200 former Apple executives and engineers, as well as previously unreported internal documents, the book goes deep into the evolution of Apple’s supply chain over the last three decades. In so doing, it makes the provocative argument that Apple has not simply benefited from cheap Chinese labor, as widely assumed, but that it has also played an indispensable role in making China the tech superpower it is today.
THE NARRATIVE BEGINS IN THE MID-1990S, with Apple at the brink of bankruptcy. An early leader in personal computing, the company has been hemorrhaging market share to standardized personal computer (PC) rivals due to their lower prices, superior distribution, and use of a common operating system, Microsoft Windows, which is prioritized by software developers. Meanwhile, Apple has lost the innovative edge that cemented it as a cult favorite, and lost focus. Its bloated product lineup included mediocre printers, scanners, and cameras.
What happens next, of course, is the stuff of legend, biopics, and biographies. Apple brings back Steve Jobs, who in turn empowers Jony Ive, the brilliant but underutilized design chief (who is now putting his talents to use at OpenAI), to run wild with a new product that will redefine the company, and the PC. The futuristic, translucent-bodied iMac thrills a demo-day crowd. Apple runs its iconic “Think different” ad campaign. The swagger is back.
McGee shows that the iMac didn’t just reinvigorate the Apple brand; it marked an inflection point in the company’s manufacturing strategy. PC firms had long ago embraced an “open architecture” approach that involved assembling computers from outsourced, commoditized parts. Apple, arrogantly believing that “nobody could do anything better than it could,” had continued to build custom hardware in-house, mostly in the U.S. (though it did outsource basic components, as well as the assembly of some noncomputer products). But not unrelatedly, the company was strapped for cash, and had been forced to sell off some of its factories. The iMac thus became the first core Apple product to be primarily built by a contract manufacturer.
Apple was “lured” into China throughout the 2000s. Says one former executive, “We just got pulled in.”
Apple chose South Korea’s LG to build the iMac’s body, while retaining control over final assembly, test, and pack out (FATP). Apple would continue to play a role in FATP through the early 2000s, when the dot-com crash forced it to sell the remaining manufacturing facilities. But with the launch of the iMac in 1998, Apple abandoned its distinction as the last vertically integrated computer company.
Over the next few years, Apple’s comeback relied on a variety of contract manufacturers operating across the globe. The iMac was built by LG in Korea, Mexico, and Wales. The 1999 iBook laptop, shaped like a handbag and used by Reese Witherspoon’s character in Legally Blonde, was built by Alpha-Top in Taiwan. The 2002 iMac G4, Apple’s first flat-screen desktop computer, was built by various contractors across six Asian countries, with final assembly handled by Quanta in Taiwan.
Ultimately, the combination of cheap, flexible labor, generous government subsidies, and the abundance of “next door” sub-suppliers in China would prove irresistible to Apple, and the consumer electronics industry as a whole. McGee chronicles how, without any intentional plan, Apple’s manufacturing footprint was “lured” into China one contract at a time over the course of the 2000s. This was primarily the work of a single contractor—Taiwan-headquartered Hon Hai, also known as Foxconn—which time and again presented Cupertino with unbeatable offers, and impressed it with unrivaled efficiency. As one former Apple executive tells McGee: “We just got pulled in.”
IT IS OF COURSE NO SECRET TODAY that Apple devices were made by China-based contract manufacturers by the late 2000s. The true revelations of the book reveal what Apple’s relationship with these manufacturers actually looked like.
Apple’s comeback has been premised on unleashing Jony Ive to boldly reimagine the look and feel of popular electronic devices. But as McGee illustrates in exquisite detail, turning Ive’s concepts into working prototypes required heroic feats of engineering, often involving novel materials, tools, and techniques. And to manufacture these prototypes at scale, “there [was] no supplier out there where we could just send a package of drawings and a pack of specs and get what we wanted,” as one former Apple engineer explains.
In other words, what is typically thought of as “outsourcing” was not an option. To bring to the masses the iMac’s translucent enclosure, the iPhone’s glass touchscreen, or the impossible thinness of the MacBook—and to meet Cupertino’s exacting quality standards—Apple engineers had to get their hands dirty.
For each of Apple’s iconic devices, the company used the same playbook, McGee shows. First, Apple would embed its own engineers in supplier facilities to “co-create” new manufacturing processes for both novel components and final assembly, using cutting-edge machinery often procured by Apple itself. Engineers would then remain on-site for months on end, to train contractor employees and troubleshoot production issues alongside them. One former engineer describes the model: “We’re going to use your factory. We’re going to use your people. But we’re going to go in there and use them as our arms and legs.”
Apple in China is chock-full of testimony and anecdotes illustrating the incredible commitment this entailed. Engineers “practically lived in Foxconn for a year” at the start of iMac production; they were stationed “twenty-four hours a day” at LG. Apple sent so many engineers to China that at one point, it convinced United Airlines to begin thrice-weekly direct flights from San Francisco to Chengdu, with the understanding that Apple would spring for enough first-class seats to make the route profitable. (When COVID hit, the company chartered private jets.) It also implemented a “Divorce Avoidance Program” that involved sending engineers’ families to China and putting them up in fancy hotels if a deployment lasted longer than 30 days.
McGee argues that this playbook, repeated over more than two decades, has constituted a massive financial and “intellectual investment” in Chinese manufacturing capabilities. Internal Apple documents allow him to quantify this in a few ways. By 2018, the value of Apple-owned equipment in China had reached $13 billion. In 2016, senior Apple executives pledged in a private meeting with top Chinese government officials to invest $275 billion in the country over the next five years—a figure that exceeded “all Canadian and American private investment into Mexico from the signing of NAFTA in 1993 through 2010,” McGee notes. It also represented twice the present-day value of the Marshall Plan, and five times the value of the CHIPS and Science Act, the Biden administration’s relatively successful attempt to reshore semiconductor manufacturing.
However you calculate it, Apple’s investment has paid off for Cupertino, allowing it to tightly control production and ensure quality while minimizing the impact on its balance sheet. Wall Street has rewarded the company handsomely: Between Tim Cook’s 2011 ascension to CEO and 2022, Apple’s market capitalization increased by more than $700 million per day, and Apple became the world’s first $3 trillion company.
But the payoff for Beijing, McGee argues, has been even greater.
AS APPLE HAS “BROUGHT UP” CONTRACTORS and suppliers to form its own customized industrial clusters, McGee explains, the company has gotten itself deeply stuck in China. “With no other nation developing the same skills,” he writes, Apple has grown “dependent on the very capabilities it had created.” Even Apple’s recent—and, according to McGee, overhyped—foray into India has been achieved largely through Apple’s established China-based partners.
Much of the second half of Apple in China details Cupertino’s “awakening” over the 2010s to the leverage the Chinese Communist Party has over it, and the subsequent efforts to remain in Beijing’s good graces. These efforts include highly publicized instances where Apple helped the Party censor the Chinese internet, but increasingly, Apple has demonstrated its commitment to supporting Xi Jinping’s goal of fostering indigenous technological innovation. Apple has made billion-dollar investments in Chinese startups, established research and development centers in Shanghai, Suzhou, and Shenzhen, and shifted its supply chain away from Taiwanese-owned companies and toward native Chinese ones. Apple served as “the biggest corporate supporter of Made in China 2025,” McGee writes, referring to Beijing’s 2015 initiative to become a global leader in high-value tech manufacturing.
But Apple’s greatest contribution to China’s technological rise has been subtler. Because Apple’s designs tend to set the standard for the smartphone and computer industries, the skills and experience contractors receive from working with the company are so valuable that they are known to work for outrageously low pay, knowing they can subsequently apply what they learn to higher-margin accounts. (While McGee is not able to confirm the veracity of this legend, Luxshare—a native Chinese competitor to Foxconn—supposedly got its foot in the door with Apple by promising to work for no profits at all.) “The reason Apple gets Chinese suppliers to work for them, for zero profits, is because the Apple ops engineer, following Tim Cook’s orders, is sleeping on a mat in their factory and helping them make that line efficient,” a former Apple executive tells McGee. Another recalls that in the early days of its partnership with Apple, Foxconn would maximize learning by rotating its engineers onto Apple projects: “We trained all of them. Then one day we’d be like, ‘Where’d those engineers go?’”
As Apple grew and added redundancy to its supply chain, these benefits spread across the Chinese electronic manufacturing industry. One of McGee’s sources estimates that Apple was at one point embedding engineers into more than 1,600 factories. The ultimate beneficiary of this epic knowledge transfer, McGee argues, has been homegrown Chinese tech giants such as Huawei and Xiaomi—the very companies now competing with Apple in the global market for premium smartphones—which grew in the 2010s on the strength of their copycat iPhones. “Apple gave birth to the Chinese smartphone industry,” McGee writes. By 2019, Huawei sold more phones than Apple.
The strength of McGee’s causal argument can be difficult to evaluate. Weren’t all multinational tech companies operating in China engaged in technology transfer to local firms? How much credit, exactly, does Apple deserve for China’s technological advancements? McGee does present a strong case that Apple’s innovative designs and the massive scale of its operation distinguished it from other multinationals; executives from other companies and independent industry analysts interviewed in the book back him up. Unfortunately, Chinese entrepreneurs are not given the chance to push back on some of the more extreme formulations of McGee’s thesis, some of which entirely discount their achievements. At one point, McGee compares Apple to “Prometheus, handing the Chinese the gift of fire.”
Nevertheless, Apple in China does show without a doubt that Apple has been working in direct opposition to Washington’s interests regarding technological competition with China. So when “national champions” are invoked to protect Apple’s tax status or other benefits, we must ask ourselves which nation it is actually championing.
U.S. efforts to restore high-tech manufacturing are now incredibly uncertain due to the Trump administration’s commitment to roll back Biden-era clean-energy and battery subsidies. But even if America wanted to pursue an industrial revival, an anecdote toward the end of the book hammers home that damage has already been done. During the Obama administration, Apple began assembling Mac Pros at a Texas plant. Internally, sources tell McGee, the ordeal was a disaster. Certain critical manufacturing capabilities had by this point been fully transferred and lost even to Apple’s engineers. When problems arose during production, one says, “we flew people from China to get it fixed. People working for Foxconn.”
This article appears in Aug 2025 Issue.