Massive government incentives are likely to keep iPhone production in China

[midian182]

Reports emerged last month claiming Apple had asked its two iPhone manufacturing partners to investigate what it would take to move the handsets’ assembly from China to the US. But despite the transfer being one of Donald Trump’s pre-election promises, production seems certain to stay in Asia, thanks to the numerous incentives offered by the Chinese government.

Last month, the Nikkei Asian Review claimed Foxconn “has been studying the possibility” of opening US-based iPhone-manufacturing facilities. But a new, in-depth investigation by the The New York Times highlights why such a move is highly unlikely.

The report looks at the giant Foxconn factory in the city of Zhengzhou, which locals call “iPhone city.” When running at full capacity, the facility, which already produces half the world’s iPhones, can churn out 500,000 Apple handsets a day.

The Times reveals that the Chinese government gave $600 million toward the construction of the factory, along with another $1 billion to build housing for its hundreds of thousands of employees. Other benefits include discounts on energy and power generator construction costs, corporate and value tax breaks for five years, help with worker recruitment and training programs, and a $10 billion upgrade for a local airport to make exporting products quicker and easier.

While Donald Trump said he would “create incentives” to tempt Apple into moving its facilities to the States, they are unlikely to come anywhere near the kind of aid and tax breaks the Chinese government has given the Foxconn facility. There’s also the issues of lower labor and component costs in China.

But Apple’s Chinese setup could still be threatened by Trump. The country has promised to “take a tit-for-tat” approach if the President-elect follows through with his campaign promise and imposes a 45 percent tariff on imports from China.   

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https://www.techspot.com/news/67582-massive-government-incentives-likely-keep-iphone-production-china.html

 

[wastedkill]

I'm guessing China must be making a boatload if they have spent as much as is being said.

The US could help make things cheaper to be honest a lot could be done.

 

[commanderasus]

Now there is a joke if I ever seen one, "in-depth investigation" by The New York Times.

 

[p51d007]

Not to mention how a lot of Chinese manufacturing it done.
Most live in a "dorm" type setting, multiple people to a cramped room.
You can bet the food they buy or are given, is taken out of their pay, which
isn't much to start with. Just think of all of the suicides in the stories over
the years.
If production were to come back, I just do not understand, how, given the wages
in the USA, ESPECIALLY if it were to settle in California, they could sell even the least
expensive iPhone, for less than 1,000.00 and still maintain their profit level.

 

[cliffordcooley]

I'll give you a hint at the solution, import taxes.

 

[Mr Majestyk]

I'll give you a hint at the solution, import taxes.

I'll give you another hint, look for another solution, that one can't and won't work at all. Ever heard of the WTO?

 

[cliffordcooley]

that one can't and won't work at all.

That just means you don't know what you are saying and will believe anything you are told.

 

[davislane1]

While Donald Trump said he would “create incentives” to tempt Apple into moving its facilities to the States, they are unlikely to come anywhere near the kind of aid and tax breaks the Chinese government has given the Foxconn facility. There’s also the issues of lower labor and component costs in China.

But Apple’s Chinese setup could still be threatened by Trump. The country has promised to “take a tit-for-tat” approach if the President-elect follows through with his campaign promise and imposes a 45 percent tariff on imports from China.

TL;DR version: Trump won't bring Apple jobs back to the U.S. Buuuuuut, if he does, please see this last paragraph that leaves us open to the possibility, should we be proven wrong (again).

 

[Kenrick]

The article is just implying that China can spend a lot for their future while USA has been spending a lot in wars which they never won.

 

[Evernessince]

I never got why people want low paying jobs back anyways. I thought American ingenuity is supposed to mean the American workforce is more capable, not begging for the good old days like donald and his ilk. Use your brains, not your wallets.

 

[Rippleman]

The article lost validity as soon as I read "New York Times". Anything that the Donald wants, they will slant against him.

 

[Uncle Al]

Doubtful that Trump can meet those kinds of incentives, but on the back side he could tax the imports to recover the losses. With a labor heavy assembly of any device, the US will loose every time. Considering the level of sophistication in assembly, I'm surprised Apple didn't go more automation ..... no?

 

[umbala]

that one can't and won't work at all.

That just means you don't know what you are saying and will believe anything you are told.

Simple solutions to highly complex problems, "import taxes". This is the typical, simple minded, uneducated rhetoric Donald Trump built his entire campaign around. Don't you think that if adding import taxes could fix the problem of jobs leaving the US someone would've done it already?

 

[umbala]

The article lost validity as soon as I read "New York Times". Anything that the Donald wants, they will slant against him.

Ah yes, let the scapegoating begin! Everything is someone else's fault. Donald Trump is never at fault for anything, even if we have video evidence of him admitting he's at fault, he's still not at fault. Anyone who says anything negative about Trump or criticizes him in any way is against him and will get attacked mercilessly! Sound familiar? If it doesn't, then try reading a history book or two.

 

[Evernessince]

Doubtful that Trump can meet those kinds of incentives, but on the back side he could tax the imports to recover the losses. With a labor heavy assembly of any device, the US will loose every time. Considering the level of sophistication in assembly, I'm surprised Apple didn't go more automation ..... no?

The only problem is that import taxes aren't currently possible under our trade agreements. Starting a trade war by imposing import taxes would likely cause a large increase in the price of anything made in China. America doesn't have the infrastructure nor the suppliers to suddenly pick up the slack for billions of products. Not to mention, the pay for the jobs would be minimum wage at best so not something that can be making you a living. America applies an import tax and it's possibly that China simply shifts it's trade elsewhere to place it can make more money, like the Japanese, Korean, and Canadian markets.

 

[Bigtruckseries]

I went to school in China. Dorm rooms for "2 Americans" were normally with at least 4 Chinese. Our dorms BTW had heating and amenities. The Chinese students (like my girlfriend) didn't even have hot water or HVAC heat.

And this was the #3 school in the country: Fu Dan University.

Shanghai University was no better.

so comparing American living standards to there's is ridiculous. They rough it daily and our "safe spacers" need aromatherapy because they can't deal with the presidential picks.

 

[Rippleman]

Ah yes, let the scapegoating begin! Everything is someone else's fault. Donald Trump is never at fault for anything, even if we have video evidence of him admitting he's at fault, he's still not at fault. Anyone who says anything negative about Trump or criticizes him in any way is against him and will get attacked mercilessly! Sound familiar? If it doesn't, then try reading a history book or two.

Puff Puff Pass

 

[Evernessince]

I went to school in China. Dorm rooms for "2 Americans" were normally with at least 4 Chinese. Our dorms BTW had heating and amenities. The Chinese students (like my girlfriend) didn't even have hot water or HVAC heat.

And this was the #3 school in the country: Fu Dan University.

Shanghai University was no better.

so comparing American living standards to there's is ridiculous. They rough it daily and our "safe spacers" need aromatherapy because they can't deal with the presidential picks.

That's the standard of living afforded to first world countries. It has and will happen to any country with a large amount of wealth, assuming that said wealth isn't in the hands of the wealthy.

 

[JamesSWD]

The article is just implying that China can spend a lot for their future while USA has been spending a lot in wars which they never won.

That's a silly inference to draw from the article. And you need to open a history book and have someone read it to you.

 

[JamesSWD]

that one can't and won't work at all.

That just means you don't know what you are saying and will believe anything you are told.

Simple solutions to highly complex problems, "import taxes". This is the typical, simple minded, uneducated rhetoric Donald Trump built his entire campaign around. Don't you think that if adding import taxes could fix the problem of jobs leaving the US someone would've done it already?

No...nothing's been done because most of our politicians are property, owned by various countries who work against us.

 

[JamesSWD]

I never got why people want low paying jobs back anyways. I thought American ingenuity is supposed to mean the American workforce is more capable, not begging for the good old days like donald and his ilk. Use your brains, not your wallets.

In the real world, many workers are more capable with their hands, not their minds. That's just a fact. Not everyone is born to be a programmer, doctor, lawyer. The simplistic idea that everyone gets a college education and has a cushy thinking or white collar job is only believed by the arrogant who have no real-world experience or college students who can't even run a lemonade stand.

 

[Evernessince]

In the real world, many workers are more capable with their hands, not their minds. That's just a fact. Not everyone is born to be a programmer, doctor, lawyer. The simplistic idea that everyone gets a college education and has a cushy thinking or white collar job is only believed by the arrogant who have no real-world experience or college students who can't even run a lemonade stand.

And people who are good with their hands should be artisans. Wishing back crap low paying factory jobs isn't going to solve anything.

 

[cliffordcooley]

Continuing to support low paying jobs all because they are not in your country is not going to solve anything either. If our demands require products of low paying jobs, we might as well be the ones working the low paying jobs. And stop promoting factories that choose to leave the country to find cheap labor. You are a hypocrite not wanting to do the jobs you depend on yourself.

 

[wiyosaya]

that one can't and won't work at all.

That just means you don't know what you are saying and will believe anything you are told.

Simple solutions to highly complex problems, "import taxes". This is the typical, simple minded, uneducated rhetoric Donald Trump built his entire campaign around. Don't you think that if adding import taxes could fix the problem of jobs leaving the US someone would've done it already?

No...nothing's been done because most of our politicians are property, owned by various countries who work against us.

It is not only countries, but companies.

Maybe crApple was really considering bringing I-Crap manufacturing back to the US, however, the reality is still that manufacturing I-Crap is more cheaply done anywhere but the US. crApple is only interested in further growing their ocean of cash.

 

[wiyosaya]

Continuing to support low paying jobs all because they are not in your country is not going to solve anything either. If our demands require products of low paying jobs, we might as well be the ones working the low paying jobs. And stop promoting factories that choose to leave the country to find cheap labor. You are a hypocrite not wanting to do the jobs you depend on yourself.

Agreed. With the reality that most people are incapable of highly technical jobs, the US still has a large percentage of its population that are incapable of working in those highly technical jobs. Those people still need jobs and do play an important role. I cannot imagine a world without garbage disposal workers or others that are frequently dissed because of their occupation.

The types of manufacturing jobs that are on the table, here, do not require a great deal of skill. Most of the components on the boards for I-Crap are placed by robots because of the precision required. They are then sent to wave or flow soldering machines. There is not a lot of technical skill required to run these machines, and when something goes wrong, people with much more knowledge than the average factory worker are called in to remedy the problem. I would not be surprised if many people with low-paying jobs would jump at the chance to work in a manufacturing position.