
How China Built ‘iPhone City’ with Billions in Perks for Apple’s Partner - sr_banksy
http://www.nytimes.com/2016/12/29/technology/apple-iphone-china-foxconn.html
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siculars
Beyond iPhone in China, I have a larger question. Let's say I were building
product in the US with child labor in unsafe conditions not adhering to US
laws and regulations. Would I be allowed to sell that product in the US?
Probably not. If I were doing similarly around the world then seeking to sell
that product in the US, it happens to be the case that I could. Why is that
the case? Why is it that product built in foreign countries that do not adhere
to US laws and regulations on manufacturing and labor are allowed to be sold
in the US?

~~~
intralizee
I believe one of Apple's higher ups has talked about child labor before. I'm
not sure if it was Steve or Tim but the convo was that its impossible to
handle without hurting the communities because the norm is child labor over
there. So the conditions for the children are worse if they have no labor.
It's really complicated and not something that you can judge from an arm chair
position, you have to go over there and see it with your own eyes.

~~~
muddyrivers
I understand the cruelty and inhuman treatment sides of child labor. But it is
not black and white. Context is important, if not crucial.

Use my own case as example. My family suffered financial hardship due to some
misfortune when I was 15. I really wanted to work to help my mother. There
were rarely part-time jobs in my hometown in China, then. I could quit my
study and try to find a full-time job, which I gave serious thoughts. I knew
several people who joined workforce around that age, either due to family
financial situation like mine, or they thought they had no future in school
(it was already very competitive then) and it was better to work early and
accumulate working experience. In this sense, they were "child" labors. But
they chose to. They were not mistreated because they were under aged. In my
view, they made rational decisions to join the workforce.

One of them, a classmate's brother, returned to school after working for 3
years, when their family financial turned around.

Fortunately, our family decided to open a small business. I tried to get as
much time as I could to work there to help, while study hard so that I could
go to the best colleges. For two years, I didn't have much time to hang out
with friends. So I was a part-time "child" labor. But it was my decision.
Nobody forced me. I don't regret it a bit.

Let's face the reality. There are many kids who are just not interested in
school and are not good at it. There are two options. They can either hang
around and be cool, which is a good situation, considering kids of that age
tend to get into troubles if their minds are not occupied. Or they can get a
job, learn something from the job, develop good work ethics, etc. What do you
think is the better option?

~~~
dforrestwilson1
Interesting. Perhaps we should focus more on whether the labor is safe and
meets reasonable time requirements than to arbitrarily impose an age cutoff.

I agree with you that attending school is not always the same as learning.
Before recent western history many children became apprentices in valuable
trade skills which often paid well. Maybe we should start looking at such
options again.

------
TheBeardKing
>Apple manages to earn 90 percent of the profits in the smartphone industry
worldwide, even though it accounts for only 12 percent of the sales

That figure is astounding, that every other smartphone manufacturer shares
only 10% of worldwide profit.

~~~
skuhn
It's actually even worse than that (for everyone else). In Q3 2016 Apple had
104% of the profits -- because most of the other companies in that industry
had no profits at all.

Samsung came in at #2 with 0.9% of profits (they usually do a little better,
but the Note 7 thing happened).

~~~
simonh
> had no profits at all.

It's mainly because they actually suffered losses, which is why Apple's share
can be more than 100%.

------
HillaryBriss
> _The well-choreographed customs routine is part of a hidden bounty of perks,
> tax breaks and subsidies in China that supports the world’s biggest iPhone
> factory, according to confidential government records reviewed by The New
> York Times, as well as more than 100 interviews with factory workers,
> logistics handlers, truck drivers, tax specialists and current and former
> Apple executives. The package of sweeteners and incentives, worth billions
> of dollars, is central to the production of the iPhone..._

So, Apple's high profits depend on a whole lot of government subsidies in
China. And then Apple takes that cash and protects it from US tax rates by
storing it in Ireland. And now, some interesting questions are raised about
the legality of that tax scheme.

Maybe the US doesn't need more businesses like Apple.

~~~
wklauss
> So, Apple's high profits depend on a whole lot of government subsidies in
> China. And then Apple takes that cash and protects it from US tax rates by
> storing it in Ireland. And now, some interesting questions are raised about
> the legality of that tax scheme.

They don't depend on them. Apple would still profit nicely (albeit less)
without these subsidies.

But then again the same thing could be say of various players on various
industries. Detroit was, too, a city built thanks to a lot of subsidies and
tax breaks; oil companies extract tremendous profits thanks to subsidies, tax
breaks and all kinds of government help... so on and so forth.

Aside from that, I don't think there's a question to be raised about the
legality of Apple tax scheme. There's a question to be raised about it's
fairness, sure, but not the legality. Apple is using the same loopholes any
other corporation can exploit (and they all do, to the extent they can or know
how to).

What we need is updated international and national tax codes that start taking
these things into account. Most of the current legislation was designed for a
time much simpler and with less access to global markets and manufacturing
chains.

~~~
HillaryBriss
> _What we need is updated international and national tax codes that start
> taking these things into account. Most of the current legislation was
> designed for a time much simpler and with less access to global markets and
> manufacturing chains._

it's a fair point.

sometimes i think: who cares if Apple or Google or Exxon are headquartered in
Cupertino or Mountain View or Dallas or New Delhi or Bahrain or Shenzhen? what
difference does it make? who gives a shit? they don't want to pay taxes and
neither do i.

------
bhewes
The number that got me was it takes 350,000 people to make 350 IPhones a
minute.

------
gumby
> In China, the competition for companies is ... often focused on
> manufacturing partners, rather than multinationals themselves.

This article doesn't include the word "unemployment" which is the reason for
this focus. Though the official unemployment rate is 4%, the real rate is
believed to be at least 12, not counting the non-existent migrants who aren't
legally permitted to travel due to the hokou system.

(I am always astonished when I hear that China is supposedly "beating" the US:
by what possible metric could this be true?)

------
otabdeveloper
Foxconn is far, far more than just iPhones or just Apple.

~~~
andreasley
It is, but Apple seems to have become the largest customer and Foxconn's
revenue seems to rise and fall with Apple's iPhone sales. This article [1]
from 2013 states that "Hon Hai [...] draws an estimated 60 to 70 percent of
its revenue from assembling gadgets and other work for Apple Inc.".

[1] [http://www.businessinsider.com/apple-moving-from-foxconn-
to-...](http://www.businessinsider.com/apple-moving-from-foxconn-to-
pegatron-2013-5?IR=T)

------
ruminasean
They've put pretty typical Apple-esque levels of effort into the entire chain,
including financial shenanigans that got them in trouble with the EU. It'll be
interesting to see whether they can make good on their promise to onshore some
of their manufacturing.

