Apple is reportedly looking to wind down production in China with a view to relocating to Southeast Asia amid international scrutiny on Chinese telecom manufacturing.
According to Nikkei Asian Review, Apple has asked a number of major suppliers to provide cost estimates for shifting around 15%-30% of the company’s production to other markets. Apple is keen to avoid being overly dependent on Chinese-made products, and is being increasingly deterred by the rising cost of labour in the market.
The mounting tension between the US and China is certainly a driving factor behind the decision, but the agency reported that Apple is committed to the plan regardless of the political climate, quoting an anonymous source who noted that the vendor considers the risks of manufacturing in China to outweigh the benefits.
NAR noted that China had been instrumental for Apple’s market dominance, as its vast and swiftly-deployable labour force had enabled the firm to meet demand fluidly. Apple has 10,000 direct employees in China but the company enables roughly 5 million jobs in the market, among them software and app developers.
One of the US giant’s suppliers stated that it did not expect Apple to pull out of China in the short term due to the difficulties of transferring its supply chain model to another market, saying “it’s a really long-term effort and might see some results two or three years from now; it’s painful and difficult, but that’s something we have to deal with.”