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Opinion | China’s Covid protests are not the whole reason for Apple’s move to India
- India’s large young population and growing manufacturing capabilities will ensure it has a place in the global technology supply chain
- Notwithstanding its handling of the pandemic and geopolitical tensions, China’s challenge of an ageing population and economic slowdown remains
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Recently, the news of Apple’s plans to move some of its production out of China to India made headlines. Many attribute this move to China’s Covid-19 situation or current geopolitical status.
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However, in analysing India’s demographic dividends, fast-growing supply side infrastructure, and booming consumer market, I would argue that India is destined to rise up in the global technology supply chain, regardless of the situation in China.
First, let us examine China’s rise in the global technology supply chain. Apple’s growth in China has been a good reflection of China’s growth. Starting in the mid-2000s, Apple gradually moved its manufacturing to China to take advantage of its demographic dividends and maturing manufacturing capability.
China was a highly cost-efficient production base because of the more affordable labour supply, and the efficiency and quality of the workforce. In late 2009, after manufacturing its products in China for a few years, Apple began marketing the iPhone there.
Since then, China has not only been a major manufacturing base for Apple, but also a major consumer market. As a result, many Apple products manufactured in China are also sold in China, creating a virtuous circle to drive continuous growth of Apple’s revenue from China.
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In 2021, Apple generated US$68.3 billion from China, or 18.7 per cent of total revenue, as production sites in China assembled 36 per cent of Apple’s products.
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