Comment: Coravirus justifies a fresh take the producti of apples from outside of China

Apple’s reliance (some would say over-reliance) the China has been a hotly debated topic for some time. The company’s efforts to stimulate the producti of apples outside of China have never been of greater interest than now, however, during the outbreak of coravirus is having a significant impact within the country.

India has been e of the countries that make a ccerted effort to win over Apple’s manufacturing company, but a couple of reports have highlighted some of the challenges of making this a viable opti …

Earlier this week, a WSJ report claimed that Apple had planned to make the iPhone 11 in India, but subsequently abanded the effort.

e of the great challenges, as we have seen before, it is the scale and complexity of the Apple’s compent supply chain, many of which are located in a regi of China.

So when we talk about apple producti outside of China, we really need to talk to the manufacture of compents and final assembly.

It is not by chance that much of Apple’s manufacturing happens in and around Shenzhen. First of all, the city is strategically placed, serving as the gateway between mainland China and Hg Kg. It is e of the largest shipping centres in the world, with a huge ctainer port.

Secdly, the Chinese government established Shenzhen as the first Special Ecomic Ze in the country. The sezs are designed to encourage the spirit of business through relaxed planning regulatis and generous tax incentives – and, importantly, to facilitate foreign investment in local companies. This is, as far as its geographical advantages, which has enabled it to grow at such a pace.

In the third place, that the SEZ was established in 1980, which means that the city has had 37 years to grow in the manufacturing center of the world of technology. Apple relies a vast network of suppliers and sub-ctractors, some of which may be simply a very small compent. The majority of them are based in Shenzhen and its immediate surroundings, so that the logistics of bringing everything together in e place for assembly are simple.

A lot of this, however, is a Catch-22. The suppliers are not willing to make the large investments necessary to comply with Apple’s envirmental policies, for example, because of the substantial capital expenditures. Large orders are required to amortize these costs, Apple can’t offer because of all the difficulties mentied.

It is not by chance that much of Apple’s manufacturing happens in and around Shenzhen. First of all, the city is strategically placed, serving as the gateway between mainland China and Hg Kg. It is e of the largest shipping centres in the world, with a huge ctainer port.

We will be happy to hear your thoughts

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