How Apple Redefined ‘Made In China’

Summary

Morning Wire — How Apple Redefined ‘Made In China’

Date: May 10, 2026
Hosts: Georgia Howe & John Bickley
Guest: Patrick McGee, journalist (The Free Press), author of "Apple in China"

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Episode Overview

This episode explores the transformative role Apple played in developing China’s high-tech manufacturing landscape, interrogates the risks that arose from Apple’s deep partnership with China, and examines the legacy of Tim Cook as he steps down as CEO. The conversation with Patrick McGee provides a nuanced look at the mutually dependent yet fraught relationship between one of the world’s most influential companies and the Chinese state.

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Key Discussion Points & Insights

Tim Cook’s Complicated Legacy

• Financial Success vs. National Interests
  • “If you use the metrics that Wall Street uses, then clearly this guy's a rock star. He added three-and-a-half trillion dollars to Apple's value since he became CEO.”
    — Patrick McGee [03:26]
  • Tim Cook credited with unprecedented growth, but decisions made as operations lead and CEO involved trade-offs with long-term consequences for the U.S.
• Apple's Role in "Made in China 2025"
  • McGee contends Apple inadvertently became the “biggest supporter” of Xi Jinping’s "Made in China 2025" initiative by training up Chinese factories and tech workers well before Chinese tech competence existed at scale.

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How Apple Built China’s Tech Powerhouse

• Before Apple: "Made in China" Meant Inferior Quality

  • "Made in China was synonymous with poorly made...It was a place where, like, Mattel went to build toys. It was not really the place of high-end electronics."
    — Patrick McGee [04:29]

• Apple’s Unique Demands Drove Skill-Building

  • Apple's approach required Chinese plants to master precision manufacturing and design previously unseen in the country.
  • Apple sent thousands of engineers to train workers, massively upgrading China’s manufacturing capabilities and global standing in electronics.

• Ripple Effects Across Chinese Tech

  • The training and investment meant that when Apple factories weren’t making iPhones, they could (and did) produce for Xiaomi, Oppo, Vivo, and Huawei—together now holding ~60% of global smartphone market share.
  • “What's an electric vehicle? It's a smartphone on wheels.”
    — Patrick McGee [05:55]

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Apple’s China Gamble: Risk or Reward?

• The Shift from Financial Logic to Geopolitical Risk

  • Early move into China was “not just bipartisan, arguably it was the entire American worldview” in the late 90s/early 2000s.
  • The real turning point came after Xi Jinping’s rise in 2012–2013, when Apple got its “political awakening” and had to better understand—and adapt to—China’s political climate.

• Xi Jinping’s Skepticism of Apple

  • Apple’s secretiveness bred suspicion; Chinese authorities worried Apple was extracting disproportionate profit and value.
  • A supply chain study flipped the narrative, showing Apple’s outsized impact training the Chinese workforce and building up industry.

• Enormous Strategic Investment to Secure Position

  • In 2016, Tim Cook and top Apple executives pledged $275 billion in investments to Chinese factories, ensuring Apple’s continued access and support.

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Apple’s Silence on Human Rights in China

• Contrast with U.S. Political Outspokenness
  • Despite being vocal domestically, Apple remains conspicuously silent on Chinese political repression.
  • “Tim Cook has said silence is the ultimate consent. Find me an issue in China where he's been vocal. I don't know of any.”
    — Patrick McGee [10:49]
  • Example: Apple complied with Beijing’s request to curtail AirDrop during the 2019 Hong Kong protests, a move criticized by both Democrats and Republicans, and cited by Senator Mark Warner.

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What’s Next? The John Ternus Era

• Leadership Transition and Open Questions

  • John Ternus named new CEO, but Tim Cook will remain executive chairman, primarily to interface with global regulators and governments. [12:09]
  • Uncertainties remain over whether Ternus, described as “likable” and “competent,” will have real autonomy, especially on China strategy.

• Apple’s Next Strategic Moves

  • Two big challenges identified:
    1. Catching up—or not falling further behind—in AI.
    2. Diversifying or replicating supply chain operations outside China, a massive long-term project.

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AI as a Competitive Threat

• Is OpenAI Apple’s Biggest Challenge?

  • “No… If Apple falls behind in AI, it's still the case that people are paying Apple a 15 to 30 percent subscription fee every time they use the iPhone to subscribe to Claude or ChatGPT or any number of the others.”
    — Patrick McGee [13:20]
  • Apple’s position as hardware gatekeeper may allow it to benefit regardless of AI software leadership, unless AI is as transformative as the web or PC era.

• Siri’s Lost Opportunity

  • Apple’s head start squandered: “The only time anyone uses Siri now is by accident.”

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Resilience and Reinvestment: The Dream Scenario

• Hoped-For Strategic Shift
  • McGee fantasizes about Apple diverting a fraction of its over-$100B annual buyback program to build up resilient, diversified supply chains—possibly in India or Mexico.
  • “If Apple were to take a quarter of that—even better, half of that—to have a fund that builds resiliency into their supply chain, that would be my dream press release.” [14:46]

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Notable Quotes & Memorable Moments

• “Apple… made the rookie and amateur mistake of putting all its eggs in one basket, just as that basket became a surveillance state.”
  — Patrick McGee on his book [15:39]

• “There’s a bipartisan view within Congress that Apple has basically been asked to jump by the Communist Party. And Apple has said, how high?”
  — Patrick McGee [10:49]

• “The fact that they haven't spent and are not spending tens or hundreds of billions of dollars on data centers is looking pretty smart right now, as the market gets pretty worried about how much spending is going on at basically every other company.”
  — Patrick McGee [13:20]

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Important Segment Timestamps

• 03:26 – Tim Cook’s legacy and Apple’s transformation
• 04:29 – China’s manufacturing status before Apple
• 05:55 – How Apple training seeded competing Chinese brands
• 07:02 – Evolution of risk for Apple in China
• 08:57 – Xi Jinping’s grievances and Apple’s response
• 10:49 – Apple’s silence on China’s politics/human rights; U.S. bipartisanship on the issue
• 12:09 – John Ternus as incoming CEO & Apple’s strategic crossroads
• 13:20 – AI as opportunity and threat for Apple
• 14:46 – McGee’s “dream” for Apple’s supply chain future
• 15:39 – Description of McGee’s book, "Apple in China"

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Conclusion

This episode shines a light on Apple’s outsized, often overlooked influence on China’s emergence as a tech giant, and questions the long-term consequences of its dependence on a now adversarial partner. It also provides a forward look at how Apple may seek to adapt in a changing global landscape—with both risks and opportunities lying ahead.

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For more, read Patrick McGee’s "Apple in China: The Capture of the World’s Greatest Company."

Transcript

[Patrick McGee]

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[Georgia Howe]

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[Narrator/Announcer]

As President Trump prepares to meet with Xi Jinping this week, technology and trade will be top of mind. American tech giant Apple supercharged the Chinese tech sector over the past two decades, but with a new CEO taking over, it's unclear if the dynamic will continue.

[Georgia Howe]

In this episode, we speak with journalist Patrick McGee of the Free Press, who has spent years digging into the complicated relationship between Apple and China and its effect on the world. I'm Georgia Howe with Daily Wire Executive editor John Bickley and this is a weekend episode of Morning Wire.

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[Georgia Howe]

Joining us now is Patrick Magee, columnist at the Free Press and author of Apple in China. Patrick, thanks for coming on.

[Patrick McGee]

My pleasure.

[Georgia Howe]

Now Apple recently announced that Tim Cook is going to be stepping down as CEO. We have John Ternus who's going to be filling in in that role. You wrote the other day that Tim Cook was great for Apple, but he wasn't necessarily great for America. What made you define his legacy in those terms?

[Patrick McGee]

I think his legacy is undefined, to be clear. So if you use the metrics that Wall street uses, then clearly this guy's a rock star. He added three and a half trillion dollars to Apple's value since he became CEO. I mean, that's a remarkable achievement. And even if people say, oh, he wasn't much of a product innovator or whatever, I mean, you know, filling the shoes of the greatest product visionary of the last century is no small feat and he deserves all sorts of credit. But the decisions that he made from senior operations person from 1998 onwards before he even becomes CEO is, is just a massive trade off in which Apple didn go to China because there was tech competence offered to Apple. Apple really went there to build the tech competence. And I argue in my book that Apple is the biggest supporter of made in China 2025, inadvertently, to be clear. But that's the program that Xi Jinping developed more than 10 years ago for China to become self sufficient in a range of electronics and other categories to basically sever its dependence on the West.

[Georgia Howe]

So what was the state of China's tech industry before Apple went in?

[Patrick McGee]

I mean, when you and I were kids, made in China was synonymous with poorly made, right? It was A place where, like Mattel went to build toys. It was not really the place of high end electronics. Certainly Apple wasn't early in terms of outsourcing, even within the computer industry, but the computers that were made there from Dell and HP and Compaq, you know, these were things that really didn't have any design aesthetic to them. They were really easy to assemble. Apple really introduced a design aesthetic that redefined how plastic injection molding or metal stamping or all kinds of tooling could actually be implemented at enormous scale. The impact of that is that Apple sent over thousands upon thousands of engineers to train up hundreds of factories across China to get up to Apple levels of competence. And then as the ipod, particularly the Mini and the Nano, and then followed by the iPhone, really exploded in global popularity, they trained those factories to scale up in terms of Apple levels of quantity as well. Barry Naughton, China expert, has said that the most important thing to Xi Jinping is the high end electronics industry. And there's been no bigger supporter, no bigger player, no bigger company sort of pursuing that achievement and forcing a whole host of suppliers to get up to those levels of quality than Apple, the world's most iconic company.

[Georgia Howe]

Now has China used those trained up employees that Apple paid for and then moved them into other high tech domains? Or is Apple still the biggest game in town?

[Patrick McGee]

There's as much as Apple wanted to have this sort of like asset light manufacturing model inherently, if you're training up these teams to work on the iPhone, they look for something to do to keep their capacity running when they're not working on the Apple iPhone. Right. And so the result of that is that the same factories that Apple trained up sort of turned around and then supported Xiaomi, Oppo, Vivo and Huawei. And those companies collectively have about 60% of the global market share for the smartphone, which is the world's most iconic product for the 21st century. And then of course, they also took those skill sets and they developed other things. So, you know, what's an electric vehicle? It's a smartphone on wheels. What's a drone? It's a smartphone with propellers. Basically, if you could master the sort of like glass, ceramics, the camera, the battery, all the things that go into a smartphone, you're being equipped with skill sets that are necessary for like any number of other industries that basically define our era.

[Georgia Howe]

Now, when Apple went into China, it made great business sense for them at that time. But did it at some point become risky? Has Apple ever actually experienced risk from being so much in China, or is it more just Americans that are experiencing a secondary risk.

[Patrick McGee]

So I really hold no blame whatsoever for anyone at Apple who moved to China. I think back then, it wasn't just bipartisan. Arguably, it was the entire American worldview that we sort of had figured out where, like, human society was going. You know, think of Francis Fukuyama. Charles Krauthammer would have made this argument as well that a sort of small l liberal capitalism was the way that all. All societies were going to go. And for a certain period, if American companies were investing in other countries, you were basically accelerating their pathway to get there. So what really changed is that in the late 90s and early 2000s, people forget, but Apple was almost bankrupt in 96, 97, and again after the dot com crisis in 2000, they really moved to outsourcing and offshoring because of financial desperation. What really changes is in late 2012, early 2013, when Xi Jinping comes in. And this is a period in which Apple experiences its political awakening. It has cracked the Chinese market both as a retail giant and as an operator. And yet it knows surprisingly little in 2013 about Chinese politics, about Chinese culture. Once Xi Jinping comes in, and this is the prologue to my book, Apple is basically attacked on the second day of his presidency. And it's this moment where Apple begins to worry that his products might be blacklisted in the country, which was no sort of idle threat. Facebook and Google were both already blacklisted. And so Apple basically begins to court local politicians, federal politicians, to basically get people off of their backs. And the result of that was that in May 2016, Tim Cook and a trio of top executives at Apple go to Jangnhai, which you could consider the equivalent of the White House, and they basically make this enormous pledge to spend and invest $275 billion into Chinese factories over the following five years. So Apple's influence on China is just absolutely enormous and I think pretty unheralded.

[Georgia Howe]

So just for clarity, what did Xi Jinping have against Apple? Because it would seem like this is a boon for China. They're bringing in all this money. A lot of their citizens are being trained up. Why did Xi Jinping see them as such a threat?

[Patrick McGee]

Because Apple is such a secretive company that not even Beijing understood what Apple's impact in the country was. So, for instance, Foxconn, which is the Taiwanese assembler of most Apple products, it was actually a larger company, both in terms of profit margins and absolute profits in dollars in the first four years of their partnership in early 21st century. Then the ipod Nano takes off, and Apple margins within a decade go from about 1% to 26%, and Foxconn margins go from double digits to about 3%. Right. So one company's margins go up by 25 times. The others fall by two thirds. So if you are Xi Jinping's lawyer, you're thinking, well, this is a company that's just absolutely taking advantage of us and exploiting us at every turn. And so this accusation essentially puts Apple on the back foot. And they're the ones who then come up with the idea of let's do our own supply chain study to analyze what our impacting the country is. And then they're able to basically turn the tables on the argument and say, look, you have no idea how much we're impacting the country. We're sending America's top engineers. We're basically having them sleep on the factory floor. And the result is that the entire smartphone competence that that Apple has embedded basically is giving rise to China's own global leading companies. So the impact Apple's had has been enormous. Nobody knew about it. And it was Apple's job to basically market their own impact on the. On the country to Xi Jinping and his system, the top echelon of Chinese leaders.

[Georgia Howe]

Now, Apple has been notoriously outspoken about some domestic political issues, but they haven't really spoken much about China. And I think China is actually something that a lot of Americans on both side of the aisle are concerned about. So how can we interpret Apple's silence on that issue?

[Patrick McGee]

Let's just go right to the top. Tim Cook has said silence is the ultimate consent. Find me an issue in China where he's been vocal. I don't know of any, you know, someone like Jimmy Lai, an outspoken advocate of democracy in Hong Kong, was sentenced to 20 years. Apple had nothing to say. Steve Jobs is actually Jimmy Lai's hero. I mean, Jimmy Lai is a guy who has companies called Apple Daily. He has another media organization called Next. I mean, these are named after Steve Jobs organizations. You know, I used to live in Hong Kong, and in 2019, Hong Kong had these protests. You could say for democracy. You could just say for a sort of one country, two systems approach, where Hong Kong wanted to retain some of its autonomy. And the way that Hong Kong protesters were communicating was using Airdrop, the sort of encrypted service on the iPhone. Well, Beijing basically asked Apple to get rid of Airdrop, and Apple complied. I mean, this was compared. I think it was Mark Warner, Democratic Senator, who said Apple is doing the bidding of the Chinese Communist Party. You know, there's a bipartisan view within Congress that Apple has basically been asked to jump by the Communist Party. And Apple has said, how high?

[Georgia Howe]

Right now, with John Ternus stepping in as CEO, do you anticipate any major changes to the company's direction? Do we know anything about him in particular or how this change could affect Apple's position towards China?

[Patrick McGee]

So my biggest question for John Ternus, who by all accounts is a likable guy, you know, competent guy, collegial guy, is whether he's genuinely the CEO, so he comes in in September. But Tim Cook, of course, is not retiring. Tim Cook is becoming executive chairman. And Apple's been explicit that the main thing that they want to keep Tim Cook around for is dealing with Washington, Brussels and Beijing. But that's the biggest open question I have about what's going to happen. My best guess, and it is only an educated guess, is that Apple knows that there are two major things it needs to do over the next 10 to 20 years. One is that they are very behind in AI and they need a better strategy. If something's going to take 5, 10, 15, 20 years, you don't necessarily want someone who's 65 leading the charge. You want someone who's 50 and can see it through for the long haul. And the other thing is that if they really are going to undo or at least replicate, let's say they're trying to, operations in another country, that also is a 10, 15, 20 year effort. And why would you have the architect of the China strategy in the hot seat making those decisions? It makes more sense for John Ternus to do it.

[Georgia Howe]

Now. You mentioned AI. Former Apple CEO John Scully says OpenAI could be Apple's biggest competitive threat. Is that your opinion as well?

[Patrick McGee]

No. I mean, look, you know, if Apple falls behind in AI, it's still the case that people are paying Apple a 15 to 30% subscription fee every time they use the iPhone to subscribe to Claude or ChatGPT or any number of the others. What's unclear is whether Apple is behind Apple. Being behind actually is going to be a boon to then. So, for instance, it's obviously clear that they blew a lead with Siri. I mean, Siri came out, I want to say, in 2011, and the only time anyone uses Siri now is by accident. The fact that they haven't spent and spent and are not spending tens or hundreds of billions of dollars on data centers is looking pretty smart right now as the market gets pretty worried about how much spending is going on at basically every other company. So if they can just be the hardware vehicle for other AI systems to operate on, then they're going to be looking pretty for quite some time. The risk, of course, is that AI really is the biggest thing since the web. If not bigger than the web, bigger than the personal computer. And if that's the case, then it's sort of a disaster that such a creative, forceful and $4 trillion company is basically just relying on others to do the innovation while they focus on hardware. So honestly, that's a tough decision. I'm sort of skeptical of anyone who has a strong opinion one way or the other. I think it's a big unknown.

[Georgia Howe]

So now, as John Ternus is stepping in as CEO, what are you going to be watching for first? Kind of help us read the tea leaves.

[Patrick McGee]

I can give you my, like, unhinged, you know, fanciful. Yeah, yeah, we want that fanciful wish, which is like, Apple spends more than $100 billion a year on share buybacks and dividends. The buybacks alone are more than 100 billion. That's such a hard number to comprehend. I have to give you an analogy. If you take all share buybacks at Wall Street's top seven banks, it's a little bit less than what Apple spends. Apple is enormous and it's hard to get one's mind around it. I think if Apple were to take a quarter of that and even better half of that to have a fund that builds resiliency into their supply chain, that would be my dream press release. That's. I would absolutely love to see that Apple is making major investments to some extent in America. But realistically, iPhones aren't going to be made in Pittsburgh. It's going to be in Karnataka, it's going to be in Tamil Nadu. Maybe it's going to be in Mexico. That's. That's what I would love to see.

[Georgia Howe]

All right, well, last question. Tell us about your book.

[Patrick McGee]

So Apple in China, the capture of the world's greatest company is like a 400 page narrative that really spells out how the world's greatest company built the world's most sophisticated supply chain, but in the process made the rookie and amateur mistake of putting all its eggs in one basket, just as that basket became a surveillance state. That sounds deep and heavy. And yet I have to say, it's a really fun book. It's like this rah, rah, go Apple narrative in the early chapters because, you know, they're experimenting in Mexico and in Taiwan, in Wales, in the Czech Republic trying to build their computers. And they slowly get lured over to China where things just get better and better and better.

[Georgia Howe]

All right. Well, Patrick, thank you so much for coming on.

[Patrick McGee]

Thanks, Georgia.

[Narrator/Announcer]

That was journalist and author Patrick McGee. And this has been a weekend edition of MORNING Wire.

[Patrick McGee]

Foreign.

[Narrator/Announcer]

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