How Long Will China Let Apple Keep On Profiting In China?

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This week’s TIME Magazine cover story is called “The Cult of Apple in China.” On newsstands tomorrow, it’s an in-depth look at how Apple thrives in China.

The article’s author, Hannah Beech, writes: “The American company is thriving in China, even as other Western tech firms struggle with local competition and communications restrictions imposed by the authoritarian state. Apple products now serve as the ultimate totem of upward mobility in a country with a fast-growing middle class.”

That all sounds rosy, but as Beech makes clear, the future is far for certain as Apple, as the government of China increasingly becomes nationalistic. How long will they allow Apple to profit so handsomely within China without starting to try to take a bigger piece of the pie?

Here’s an excerpt of the cover story:

Apple symbolizes the best of American Big Business—its innovative drive, its stylish flair, its advertising acumen. The company has also succeeded because of its deep and complex relationship with a country halfway around the world, where nearly all its gadgets are assembled. Labor violations within the tech firm’s China supply chain—Apple has no factories of its own and instead contracts assembly out to a vast supplier network—have grabbed headlines in recent months.

But the supply-side problems are only part of the Apple story. The American company is thriving in China, even as other Western tech firms struggle with local competition and communications restrictions imposed by the authoritarian state. Apple products now serve as the ultimate totem of upward mobility in a country with a fast-growing middle class. “There’s tremendous opportunity for companies that understand China, and we are doing everything we can to understand it,” said Timothy Cook, Apple’s chief executive, during an April earnings conference call. “It was an incredible quarter [for Apple] in China. It is mind-boggling that we could do this well.”

Apple’s relationship with the People’s Republic embodies some of the global economy’s brightest opportunities but also its thorniest dilemmas. An American tech giant must decide how much to adapt its practices in a faraway land. Should Apple represent the best of the West in the Middle Kingdom, or must it conform to the less salubrious way China Inc. operates? From China’s side, how much longer will an increasingly nationalistic government allow foreign companies like Apple to profit so handsomely on its shores? Caught in the middle are 1.3 billion Chinese whose toil in factories and taste for luxury products will dictate the future of the world’s marketplace.

The issue of TIME featuring this cover story will hit newsstands tomorrow. In the meantime, TIME Magazine subscribers can read the story in its entirety at the link below.

Source: TIME

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