iPhone production in India: China bans export of "military technology"
It is already known that Beijing does not want Apple to relocate more production to the subcontinent. The backlash seems to be intensifying.
Security guard in front of Apple store in China: Production diversification to India hampered by Beijing?
(Image: dpa, Diego Azubel/Archiv)
Shortly before the start of the second Trump administration, the People's Republic of China is apparently toughening its stance against Apple's ongoing relocation of production. As the Nikkei financial news agency reports from Japan, a new law is being used for this purpose, which declares certain machines and components required for production to be “military technology” and then subjects them to export controls or even an export ban. It was already known that Apple's attempts to set up large-scale iPhone production in India were met with counter-movements from Beijing.
Foxconn needs Chinese help
Apple is investing a lot of money in Indian production facilities, which are then operated by manufacturers such as Pegatron, Foxconn, Flex or Tata. The idea is to be less dependent on China as a production location. So far, this switch has gone quite smoothly, and current iPhones worth billions are already being assembled. But Apple needs expertise from China. Foxconn, for example, has brought numerous employees from the People's Republic to India to set up, monitor and manage the plants. However, some of them had to leave the country and were replaced by employees from Taiwan – also because of the (re)emerging geopolitical conflict between the USA and China.
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Nikkei now reports that, among other things, there are stricter customs controls for so-called “dual-use” technology, which Beijing apparently declares the manufacturing products to be. “Dual-use” means that a product could also be used for military purposes and exports are therefore restricted. This in turn causes delays.
Vietnam also affected by stricter controls
Not only India is affected, but also Vietnam, where Apple is currently expanding its production significantly. “In my observation, Trump's threats of a tariff war and the deterioration of the Chinese economy are the main reasons for the increasing Chinese customs controls,” Nikkei quotes a well-known supply chain expert.
The new law also appears to ensure that products and tools outside the “dual-use” list are subject to stricter controls. Even devices used to test smartphone performance data are included, with Chinese customs simply declaring them to be products “related to military applications”.
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