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How China Built ‘iPhone City’ with Billions in Perks for Apple’s Partner

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How China Built ‘iPhone City’ with Billions in Perks for Apple’s Partner

A hidden bounty of benefits for Foxconn’s plant in Zhengzhou, the world’s biggest iPhone factory, is central to the production of Apple’s most profitable product.

The New York Times,

5 min read
5 take-aways
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What's inside?

The Zhengzhou government is subsidizing the production of your iPhone.

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Editorial Rating

8

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Recommendation

Subsidizing companies that manufacture goods for Western multinationals has been a crucial component of China’s economic policy. A major beneficiary of this policy has been Apple and its manufacturer Foxconn, which operates a large iPhone production facility in Zhengzhou, China. The New York Times correspondent David Barboza has obtained confidential government records and conducted more than 100 interviews to conclude that billions of dollars’ worth of subsidies are behind “iPhone City,” Foxconn’s highly profitable manufacturing site in Zhengzhou. getAbstract recommends Barboza’s investigative report to business leaders with a stake in the Chinese market.

Summary

China has been offering generous incentive packages to manufacturing partners of Western multinationals. Local governments compete for these companies to set up production facilities in their cities. Zhengzhou, for example, convinced Taiwanese manufacturing giant Foxconn to set up a state-of-the-art production facility to produce iPhones. To bring jobs to the region, Zhengzhou’s government offered generous tax breaks and production bonuses. In addition, it spent more than $1.5 billion to build parts of the factory, employee housing and power plants. It also pledged $10 ...

About the Author

The New York Times correspondent David Barboza has written extensively about US firms doing business in China. 

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