WSJ: China changed its health policy to help Apple

From Keith Zhai and Yang Jie's "Letter From Apple Supplier Foxconn’s Founder Prodded China to Ease Zero-Covid Rules" in Friday's Wall Street Journal:

A letter from the founder of the world’s largest iPhone assembler played a major role in persuading China’s Communist Party leadership to accelerate plans to dismantle the country’s zero-tolerance Covid-19 policies, according to people familiar with the matter.

In the letter to Chinese leaders, Foxconn Technology Group founder Terry Gou warned that strict Covid controls would threaten China’s central position in global supply chains and demanded more transparency into restrictions on the company’s workers, the people said. Mr. Gou sent the letter a little more than a month ago as Foxconn’s factory in the city of Zhengzhou was rocked by turmoilover Covid restrictions.

Chinese health officials and government advisers seized on Mr. Gou’s letter to bolster the case that the government needed to speed up its efforts to ease its tough Covid-19 controls, people familiar with the matter said. The eruption weeks later of nationwide protests gave policy advisers further ammunition to press the case for relaxing measures, two of the people said...

After Mr. Gou sent the letter, the government’s tone on Covid began to change. On Nov. 3, an article in the Health Times, a newspaper run by the Communist Party mouthpiece People’s Daily, described the symptoms of Covid as often short-lived and mild. The description was a departure from previous government narratives that emphasized the severity of the disease and the potential long-term health implications...

China has also tried to stress the importance of the Foxconn factory. In a video published on Nov. 20, the People’s Daily hailed the Apple production site, saying it accounted directly or indirectly for more than a million local jobs and trained over 3 million skilled workers.

My take: As we suspected. Surprised it took more than a month for the story to get out.

11 Comments

  1. Jonny T said:
    Who needs who the most is the question.

    3
    December 9, 2022
  2. Jerry Doyle said:
    “…. WSJ: China changed its health policy to help Apple”

    Poppycock! China is not concerned about Apple but concerned about losing its positions as the global supply chain to other countries.

    There is a joke that goes like this: Xi Jinping is sitting in his car reading a newspaper. The driver interrupts Xi and says, “Comrade, there’s a problem. The sign says turn Left for communism, turn Right for capitalism. Which way should I go?” Xi tells his driver, “There’s no problem. Just signal left and go right.”

    Xi Jinping is walking a tightrope and he knows it. Capitalism’s economic prowess moves his behemoth populous nation from poverty into middle class economic success. Communism, though, is what keeps Xi and his CCP in power. The two (communism & capitalism) are in many ways like oil & gas. They don’t function together well. The more China grows through economic freedom, than the more economic freedom brings individual expression of rights.

    Bill Clinton’s theory for global economic trade he initiated in the 90s is that capitalism will free-up nations from authoritarian run regimes. This is true. It requires that delicate balance of which Xi Jinping and the CCP will confront more and more with each passing decade as capitalist success makes China ever more dependent in interacting with global commerce to retain economic success for its peoples.

    So, China did not change its health policy to help Apple, per se. China changed its health policy to help the CCP stay in power.

    Now, Xi must continue the Party’s balancing act between capitalism and communism.

    9
    December 9, 2022
    • Gregg Thurman said:
      I wouldn’t call Chinese leadership anymore. Communism is an economic model wherein the State owns/controls the means of production. China no longer does that, having abandoned primary ownership of production several decades ago.

      On the other hand, communism can only survive in a dictatorship, a system of government. The CCP has retained the dictatorship element of communism, making its government facist (capitalism under a dictator).

      Ultimately the government and the populace will come into conflict, as a wealthier populace climbs Mazlovs Hierachy of Needs.

      0
      December 9, 2022
      • Gregg Thurman said:
        I wouldn’t call Chinese leadership anymore.

        That should have read: “ I wouldn’t call Chinese leadership communist anymore.”

        0
        December 9, 2022
  3. Fred Stein said:
    Perhaps it’s overly optimistic, but the above narrative hints that China will take a pragmatic approach to Taiwan, where Foxconn has its HQ.

    Or, as Jerry said, they are signally left and going right (or rather forward.)

    3
    December 9, 2022
    • John Konopka said:
      That’s my thought. If China invaded Taiwan the Chinese economy would see massive disruption. All sorts of Western companies would pull out of China. Their export markets would collapse. There would be massive unemployment. I don’t see how they could want this unless they were possessed by a kind of insanity like Putin.

      2
      December 9, 2022
  4. Bart Yee said:
    “In a video published on Nov. 20, the People’s Daily hailed the Apple production site, saying it accounted directly or indirectly for more than a million local jobs and trained over 3 million skilled workers.”

    If this is true (maybe the numbers are a bit inflated), it still underscores the importance of the Foxconn / Apple factory, somewhat a sense of prestige of its existence, and the realities of the money multiplier effect of the factory & workers jobs, incomes, and subsequent economic spending. Besides the additional skills that Apple / Foxconn workers gain and could use elsewhere, the additional supply chain factories also add to the economic impact in China.

    While China may not have changed health policy “just” for Apple / Foxconn, A / F is completely intertwined into China’s economic engine and aspirations, and as such, has some small influence directly or indirectly with Chinese actions, positively or otherwise.

    0
    December 9, 2022
    • Charles A. said:
      I spent an hour on the People’s Daily site and failed to locate this video. Anyone able to?

      0
      December 9, 2022
  5. Bart Yee said:
    And before anyone says this should be duplicated in the US, ask yourself how many US workers would consider working within the same type of massive factory, housed in massive dorms, eating in huge communal cafeterias (with Chinese food?? Probably more choices than that), and for maybe 5-10% over local state or federal minimum wage?

    Would you rather accept the 30 million App current developers Apple has spawned worldwide since 2009, of which at least 5-10 million are in the US, most of whom make way more than minimum wage and have much more upside potential (not to minimize the skills that assemblers May gain) in the software development world?

    0
    December 9, 2022

Leave a Reply