China worried over exodus of Apple production after Cook’s India visit
As Apple CEO Tim Cook spoke of plans to expand manufacturing operations in India, China is apprehensive that it could lead to possible exodus of Apple production chain and loss of tens of thousands of jobs, Chinese state-run media said.business Updated: May 23, 2016 19:24 IST
As Apple CEO Tim Cook spoke of plans to expand manufacturing operations in India, China is apprehensive that it could lead to possible exodus of Apple production chain and loss of tens of thousands of jobs, Chinese state-run media said.
“It seems the time has come for China to consider whether it is ready for the possible exodus of Apple Inc’s production chain,” an article in Global Times said, referring to Cook’s comments during his India tour.
Cook had discussed with Prime Minister Narendra Modi the “possibilities of manufacturing”.
“Cook shared Apple Inc’s future plans for India. He spoke of the possibilities of manufacturing and retailing in India. He appreciated the breadth of young talent in India and said the youth have significant skills, which Apple would like to tap,” an official statement said.
“Cook’s words have prompted a heated discussion in China. Wage increase has apparently eroded China’s labour competitiveness, resulting in the departure of a number of manufacturing businesses. Now people are wondering if Apple will be the next one,” the Global Times said.
Apple’s decision could affect the jobs of tens of thousands of Chinese workers. However, a see-saw battle between China and India over the technology giant is not the only solution, it said.
It is natural that Apple would want to move its manufacturing base from China to another Asian nation to lower production costs. In fact, before Cook’s words, some major Apple suppliers such as Foxconn had already announced plans to expand their business in India,” the report said.
China may need to promote the development of more local manufacturers and encourage them to move to less-developed central and western regions where labour costs are lower, it said.
“Several factors are to blame for the slow manufacturing transfer from coastal regions to inland areas. Although a large amount of money has been allocated to boost development in western China in recent years by accelerating infrastructure construction, the environment for business development in the region is still lagging behind,” it said.