Jon Stewart Slams CNN’s “Bombshell” Biden Book Promo Amidst Cancer Diagnosis | Patrick McGee

Summary

The Daily Show: Ears Edition – Episode Summary

Title: Jon Stewart Slams CNN’s “Bombshell” Biden Book Promo Amidst Cancer Diagnosis | Patrick McGee
Host: Jon Stewart and Alex Thompson
Guest: Patrick McGee
Release Date: May 20, 2025

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Introduction and Setting the Stage

The episode opens with Jon Stewart welcoming listeners to "The Daily Show: Ears Edition," a collaboration between iHeartPodcasts and Paramount Podcasts. Stewart introduces the show's unique format, promising a blend of humor and incisive commentary on current events.

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CNN's Bombshell Publication on President Biden

Timestamp: [00:00 – 10:50]

The conversation quickly pivots to the controversial release of CNN journalist Alex Thompson's new book, Original Sin, which delves into President Joe Biden's physical and mental health. Stewart humorously critiques the media frenzy surrounding the book’s release, highlighting the seemingly opportunistic timing amidst Biden's recent cancer diagnosis.

Notable Quotes:

• Jon Stewart [04:39]: “Another bombshell. Former President Biden apparently forgot the name of his longtime mate Jake Sullivan and called him Steve.”
• Alex Thompson [02:20]: “Original sin. That's coming out in three weeks on May 20th.”

Stewart sarcastically mocks CNN’s promotional strategies, suggesting that the network is using Biden's health crisis to push sales for Thompson's book. He comments on the mixed messages from different media outlets, especially contrasting the somber news with aggressive book marketing tactics.

Impact of Biden's Health Announcement: The hosts discuss the implications of Biden's cancer diagnosis on the political landscape, questioning the media's handling of the news and the ethical considerations of promoting a potentially unverified narrative during a sensitive time.

Notable Quotes:

• Jon Stewart [07:19]: “It's a terrible cover up because we all knew there was no cover up.”
• Alex Thompson [09:12]: “The timing of former President Joe Biden's cancer diagnosis is certainly dramatic, coming on the eve of a blockbuster new book about his health.”

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Trump’s Reaction to Biden’s Diagnosis

Timestamp: [10:50 – 17:26]

The discussion shifts to former President Donald Trump’s reaction to Biden’s cancer diagnosis. Stewart parodies Trump’s typically minimal and formulaic responses, highlighting the president's lack of genuine empathy.

Notable Quotes:

• Jon Stewart [14:23]: “That's it. No exclamation points, no off caps, no insults, whole thing spelled correctly.”
• Jon Stewart [16:13]: “It is not important that you speak up at all. As a Democrat, as anything.”

Stewart emphasizes the superficial nature of Trump's condolence message, contrasting it with the expected heartfelt response, thereby critiquing Trump's communication style and political strategies.

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Patrick McGee on "Apple in China"

Timestamp: [22:10 – 43:35]

The episode transitions to the main segment featuring Patrick McGee, who discusses his groundbreaking new book, Apple in China: The Capture of the World's Greatest Company. McGee explores how Apple's extensive investments in China have significantly influenced the global economy and contributed to China's rise as a technological powerhouse.

Key Themes:

1. Apple’s Massive Investments:

   • McGee reveals that Apple invested $55 billion annually into China by 2015, surpassing significant government initiatives like the U.S. Chips Act.
   • Alex Thompson [25:15]: “So I'm trying to make a very serious point here and I find it very difficult to do that when you throw in a totally weird looking dude right in the middle of it.”

2. Training Chinese Competitors:

   • Apple’s investment strategy inadvertently trained Chinese competitors, enabling companies like Huawei, Oppo, Vivo, and Xiaomi to dominate the global smartphone market.
   • Alex Thompson [32:31]: “They trained their competitors to compete with them. They’re actually creating a far more competitive market than ever would have given our standard business practices.”

3. Impact on Supply Chains and Technology:

   • McGee discusses how Apple’s technology transfer has bolstered China’s capabilities not just in smartphones but also in areas like electric vehicles and military technology.
   • Alex Thompson [37:27]: “Because they don’t want to get blamed for.”

4. Political and Economic Ramifications:

   • The book delves into the geopolitical tensions arising from Apple’s role in China's technological advancement and the broader U.S.-China tech battle.
   • Alex Thompson [41:12]: “The only thing I would say is that that really happened in the 80s and 90s.”

Notable Quotes:

• Patrick McGee [24:04]: “Apple was investing by 2015, $55 billion a year into China. So this is mostly like they spend loads of money, billions of dollars on machinery that they put on Apple’s production lines.”
• Jon Stewart [32:45]: “So they now have a real problem on their hands. They have trained their competitors and made it part of their business model that their competitors get healthy and do that.”

Analysis of Apple's Strategy: McGee explains how Apple’s approach of outsourcing manufacturing while maintaining stringent control over production processes inadvertently empowered Chinese manufacturers to refine their own technologies, leading to fierce competition. This strategy, though initially beneficial for Apple’s global dominance, laid the groundwork for China's emergence as a leading tech giant.

Jon Stewart’s Commentary: Stewart provides a satirical take on Apple's corporate maneuvers, comparing them to historical events and critiquing the company's long-term strategy. He highlights the irony of Apple creating competitive pressure within an authoritarian regime, ultimately leading to a more competitive global market.

Notable Quotes:

• Jon Stewart [36:26]: “So now in the global smartphone world, there's iOS, there's Android and there's HarmonyOS. This is my guess. Harmony OS will become the de facto standard for all operating system phones in China.”
• Jon Stewart [38:55]: “We are now living through an announcement presidency. Because that really is what we are living through.”

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Concluding Remarks and Future Outlook

Timestamp: [43:35 – End]

As the episode nears its conclusion, Stewart and McGee reflect on the broader implications of Apple's investments in China, emphasizing the intertwining of technology, economics, and geopolitics. Stewart humorously critiques proposed American industrial policies, contrasting them with China's strategic planning and investment.

Notable Quotes:

• Jon Stewart [39:23]: “This presidency is the mission accomplished presidency. It's just a dude on a destroyer with a giant banner behind him that says mission accomplished, even though it has no basis in reality.”
• Alex Thompson [43:35]: “I'm a big fan of friend shoring rather than reshoring.”

Final Thoughts: The hosts underscore the complexities of global supply chains and the challenges facing the U.S. in competing with China’s technological advancements. They advocate for strategic partnerships with allied nations to enhance industrial capabilities, suggesting that mere reshoring initiatives are insufficient.

Notable Quotes:

• Jon Stewart [40:29]: “What is happening?”
• Alex Thompson [41:50]: “But what you're actually going to learn about is some Chinese history, the importance of the US China tech battle, and things like supply chains.”

Outro: The episode wraps up with light-hearted banter about upcoming shows and specials, maintaining the signature comedic tone of "The Daily Show." Stewart reiterates the availability of Patrick McGee’s book and encourages listeners to engage with future episodes on Comedy Central and Paramount+.

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Key Takeaways

• Media and Politics: The episode offers a critical view of how media outlets handle sensitive political topics, particularly the intersection of journalism and personal health disclosures.
• Global Economics: Patrick McGee’s insights shed light on the intricate ways multinational corporations like Apple influence and are influenced by global markets, especially in China.
• Strategic Investments: The discussion highlights the unintended consequences of corporate investments in foreign markets, emphasizing the delicate balance between growth and competition.

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This episode of "The Daily Show: Ears Edition" provides a blend of sharp political satire and in-depth analysis of global economic strategies, offering listeners both entertainment and substantial insights into current affairs.

Transcript

[Jon Stewart]

You're listening to an iHeart podcast. You're listening to Comedy Central from the most trusted journalists at Comedy Central. It's America's only source for news. This is the Daily show with your host, Jon Stewart. Welcome to the Daily show, man. My name is Jon Stewart. What a program we have designed for you tonight. A bespoke, artisanal effort that I think you are going to truly. And Patrick McGee is going to be here. He is disgu. They call him McGee heads. That's the fandom. The Patrick McGee fandom. Here to discuss his new book about how Apple's actions in China shifted the entire global economy. The book is phenomenal. For a book about Apple. It's banana. That's a little. It's a fruit pun. I don't know about you folks, but me, I'm on the pins and needles. I'm very anxious right now. I'm very nervous, very anticipatory. And it's not about whether Russia and Ukraine will be settled. It's not whether somebody can stop Netanyahu. Somebody, please. It's not whether Taylor's unfriended. Blake, I don't know.

[Alex Thompson]

No.

[Jon Stewart]

Like most people in America, I am most looking forward to reading a book. But when we're back with breaking news.

[Alex Thompson]

In our politics lead and a brand new excerpt from my upcoming book with Axios, Alex Thompson. It's called Original Sin. I'm not sure if you've heard of it. It's on Biden's decline. It's called Original Sin. I'm sure you've heard on May 20th.

[Jon Stewart]

That's Tuesday.

[Alex Thompson]

Original sin. That's coming out in three weeks on May 20th. That's just 19 days away in one week. And one day coming out in just a few days comes out Tuesday. You will not believe what we found out.

[Jon Stewart]

Don't news people have to tell you what they know when they find it out? Isn't that the difference between news and a secret? You won't believe what we found out. No. That's why I'm watching Breaking news in a week. Now, I don't know how the rest of the country is feeling about this book coming out, but I know New York is hyped. New York City, baby. The city. The city that never stops reading. That's our motto. Our motto is. I'm kidding, of course. That is footage from the reopening of the Frick Museum, by the way. It is New York. So you know the real name of the museum is the collection. You just put it up there like hey, the frigging collection. What are we doing here? So what is this bombshell book about?

[Alex Thompson]

A new book is outlining new claims about former President Biden's physical and mental health. The book, Original Sin, claims Biden's health had become so severe that there were internal discussions about putting the president in a wheelchair. He allegedly was napping during debate preparations.

[Jon Stewart]

Another bombshell. Former President Biden apparently forgot the name of his longtime mate Jake Sullivan and called him Steve. My God, to be fair, when you forget a white guy's name. To be fair, and I say this with respect to the bombshell, Steve is not a bad guess. I think even Jake Sullivan at some point was like, is my name Steve? Because when I look in the mirror, I could be Steve or Scott, maybe a Craig. The point is, the American news media were hungry for more. A new Biden bombshell dropping bombshell allegations. A steady drip of new revelations. Damning claims, damaging new details.

[Alex Thompson]

Oh, my goodness, they're dripping with details. A massive tsunami. The drip drip on Joe Biden's decline.

[Jon Stewart]

My God. Fox News built an entire Biden sucks border wall to hold back the raging drips of details in bombshells. Nothing could slow down this coming feeding news frenzy about Biden's cognitive health other than maybe a report on his actual physical health, which was not good. But now we got ourselves a little problem. You've prepared an entire smorgasbord. Smorgasbord. Charcuterie board. You know what I'm talking about. Meat and cheese. You know what I'm talking about. Entire smorgasbord based on what you thought would be a relatively uncomplicated story about mental decline. News has the countdown clock. They got the book graphics. They got the CNN Happy Meal tie in toys. But now doing the story seems almost disrespectful. Can CNN thread the needle? How do you pivot from excitedly promoting your anchor's book to somberly and respectfully promoting your anchor's book?

[Alex Thompson]

Biden's health was very much in the news even before the cancer diagnosis was announced on Sunday. That's because of a new book by CNN's Jake Tapper. This was already going to be a tough week, and this makes it much harder. And that is a reference to the fact that our colleague Jake Tapper and Alex Thompson have a book that's set to publish on Tuesday.

[Jon Stewart]

This very tough news, this very challenging news. And at the same time, the backdrop.

[Alex Thompson]

Of our colleague Jake Tapper's book with.

[Jon Stewart]

Alex Thompson coming out this week. It's so hard. It's such a difficult time. So unfathomable in terms of the pain this family must be feeling. And yet if you act now and you use the code backslash, tap that book, you will. Obviously, this 20% off offer is not available for some reason in Tennessee. But the point is, forgetting about the fact how weird it is that the news is selling you a book about news they should have told you was news a year ago for free. It's just fun. It's just fun to watch them not only continue to push the book in light of this difficult news, but to actually frame this difficult news as perhaps even more of a reason to buy this book.

[Alex Thompson]

The timing of former President Joe Biden's cancer diagnosis is certainly dramatic, coming on the eve of a blockbuster new book about his health and his time in the White House.

[Jon Stewart]

Go on. I'm sure some observers will say that.

[Alex Thompson]

The reporting in the book is even more important now.

[Jon Stewart]

Yeah, nobody's saying that. No, observers will say it's more important now. Some observers might think, do these CNN people work on commission? Like, why are they hawking this thing? So is this a Girl Scout cookie situation? Whoever sells the most tapper books gets a Schwinn now. Well, that is not necessarily the model they will get. I don't want to disincentivize people from working hard. Obviously, I don't go through all the graphics. Before the show. While CNN had to shift from somber and caring to always be closing, Fox and the rest of the right wing media had a very different problem. How to shift from let's go, Brandon to get well, Brandon. And then as quickly as possible back to let's go, Brandon. Watch them work their magic and see how much weight the word but carries. It's a terrible thing for him and his family. So I hope he beats it.

[Alex Thompson]

But look.

[Jon Stewart]

I hope he beats it, but not too fast. You want to enjoy this. But what? But look, I don't believe that they just found out Friday because they're not credible on anything they've done. So true. Yeah, I'll bet. I'll bet he didn't find out Friday. I'll bet he found out like Wednesday. And then they were all like, oh, my God, this is terrible. Should we tell this guy? And then they're like, oh, I don't know, why don't we tell the family first? And then they're like, yeah, but this guy really wants to know. I gotta tell you, I think this all really highlights an opening in the greeting card market. We don't have enough cards that swing wildly from sympathy to accusation. Praying you get well soon, but there are some holes in your timeline. They're all, I don't know, Friday, Wednesday. Anyone else want to do this but.

[Alex Thompson]

Pivot the tush push, obviously hope for a speedy recovery? I will say it does raise serious questions.

[Jon Stewart]

You hate to see something like this happen, but it just raised all these questions.

[Alex Thompson]

We're all, of course, praying for President Biden's full recovery, but the reality is, you know, I hope he gets over this.

[Jon Stewart]

But number one, very sorry for his diagnosis and wish him the best. Number two, I am trying to make a very serious point here and I find it very difficult to do that when you throw in a totally weird looking dude right in the middle of it. That is not fair. That is not fair to do. I don't know if that was like a green screen thing, but whatever's happening here, I imagine if I had a nodule on my prostate, this is what it might look like, I believe, just a little bit. Why would you get the worst possible haircut for your head shave? Why would you do that? My head is long and thin. Amplify that. Looks like if a kosher hot dog asked for a Hitler youth haircut. I mean, respectfully, yes, right wing media deftly pivoted from concern to accusation, but perhaps the most shocking response of all was from the commander in chief himself, President Trump.

[Alex Thompson]

Posted. Melania and I are saddened to hear.

[Jon Stewart]

About Joe Biden's recent medical diagnosis.

[Alex Thompson]

We extend our warmest and best wishes to Jill and the family and we wish Joe a fast and successful recovery.

[Jon Stewart]

That's it. No exclamation points, no off caps, no insults, whole thing spelled correctly. It's really got all the telltale signs of a post definitely written by Donald Trump. I look at this post, I swear to God. I wonder when they saw this post. Truth Social sent him a security alert. They just sent him a quick message. We noticed some suspicious humanity on your account. If this was in fact you, President Trump, please reply. Nancy Pelosi's husband is gay. But the fact that Trump responded to Biden's diagnosis with the most pro forma, bare minimum chatgpt statement was so astonishing, even the corrupt lamestream media gave Trump his props. This is a very traditional comment in this moment from President Trump to former President Biden.

[Alex Thompson]

I mean, it's a very human, very traditional response from President Trump. I was very, very pleased to see President Trump putting forward such a kind statement. I will note as an ardent Democrat, it's really important that I speak up.

[Jon Stewart]

And thank President Trump for his gracious statement. Couple of things. It is not important that you speak up at all. As a Democrat, as anything. It is not important. What we did was not noteworthy. Has any president, has any person ever had a lower bar to clear than. I have to salute the president. I have to salute the president. I certainly disagree with him on many things. But I have to applaud that after hearing this devastating news about Joe Biden that Donald did not take cancer's side. Yeah, I'm swinging tonight. So important as we as Americans and by the way, Trump maintained that level of gravitas for almost an entire day.

[Alex Thompson]

Do you want to respond to President.

[Jon Stewart]

Biden being diagnosed with cancer? I'm surprised that it wasn't, you know, the public wasn't notified a long time ago because to get to stage nine, that's a long time. To be fair, I do think if Biden was at stage nine, we should have found out about that. I don't even know that. And he's the one that's fine, right? There's no book coming out on him. He's fine. He's ah, that'll be the next stage nine cancer. Is that, that's the kind that grows up like an ivy into a building. Not playing. But you know what? Maybe it is another cover up. I don't know if they came out and said, yeah, Biden knew about it five years ago. I wouldn't be shocked if they came out and said Biden found out on Friday. I wouldn't be shocked. And I understand the excitement over an insidious Democratic cover up about Joe Biden's mental decline. The thing is though, it was a terrible cover up because we all knew, all of us knew there was no cover up. Poll after pollution poll showed vast majorities of the public thought Biden was too old and too out of it to run again. Dean Phillips mounted an entire primary campaign because of it. I really don't know if that's Dean Phillips. Is that Dean Phillips? My point is this. There is a very real person in this shop, probably named Dean Phillips or Steve and he might be in the shot, but he, along with most of the public knew that it was a bad idea for Biden to run. We knew it. And that's what's so hilarious about politicians. The COVID up doesn't work when everyone knows you're lying and everyone knows you're lying. The tell is when you're so over the top about what you don't want to Tell the truth about Joe Biden.

[Alex Thompson]

Is incredibly competent and he's incredibly effective.

[Jon Stewart]

This is a man who is sharp, who is on top of his game. He has more energy than I do. He works us all under the table. I can't even keep up with him. Three hours on photo lines, on three events a day, then giving speeches. Are you kidding? I mean, come on, that's insane. Three hours on photo lines, three events a day, that's nine hours of photo lines and then giving speeches and then at night fighting crime. I have said too much. Come on, they gotta steroid test these dudes. Look, they used to say it's not the crime, it's the COVID up. But it's starting to feel like politics is all cover up, crime or not. In an attempt to hold on to power, political actors do anything they can to project a reality distortion field when all known evidence is to the obvious contrary. And the media tasked with covering them has somehow ended up inside the bubble. So for those of you watching at home who might like to know what the reality of what they're hiding about our current president would be, look not to the Democrats, look not to the media, look to the President's political allies because their hyperbole is the indictment.

[Alex Thompson]

Trump is one of the most transparent.

[Jon Stewart]

Presidents of all time. The bravest, toughest man in the world.

[Alex Thompson]

Enormous compassion.

[Jon Stewart]

He's only been bound to we the people.

[Alex Thompson]

It's frankly ridiculous that anyone in this room would even suggest that President Trump is doing anything for his own benefit. Nobody believes that Donald Trump can be bought. One of the most moral leaders we've had.

[Jon Stewart]

His pure honesty, the most ethical American. I know. Tapper's 2031 book, it's gonna be lit when we come back. Patrick McGee will join us. Don't go. Welcome to the Daily Show. How you doing there, kids? My guest tonight is an award winning journalist whose groundbreaking new book is called Apple in the Capture of the World's Greatest Company. Please welcome to the program. Patrick McGee. Come on. Thank you for joining us. The book is called Apple in China. The Capture of the World, World's Greatest Company. I've got to tell you something. You know, I'm not much of a reader. I was going to wait for the movie to come out, but honestly, like, this is jaw dropping. Yeah, this book is jaw dropping and so well researched. It's not a polemic, it's not hyperbole. It's the story of how China, how China basically was built as a country by Apple. Is that.

[Alex Thompson]

Yeah, like I say that sometimes and it sounds totally unhinged, and I get that.

[Jon Stewart]

Yes.

[Alex Thompson]

And yet, like, what happened is, like, I came across internal documents after speaking with 200 people, and I figured out that Apple was investing by 2015, $55 billion a year into China. So this is mostly like they spend loads of money, billions of dollars on machinery that they put on Apple's. Sorry. On production lines that are sort of orchestrated by Apple but not owned by them.

[Jon Stewart]

So they're. They're. They're building the machinery.

[Alex Thompson]

Yeah.

[Jon Stewart]

But they're outsourcing that. They're hiring companies to build this.

[Alex Thompson]

Like, they, like, outsourcing is the word. And yet there's something. So they own the means of production with it. They own. So I compare it to, like, the way Uber is the largest taxi provider in the world without owning any cars. It's the same thing for manufacturing. So none of the factories are owned by Apple, and yet they have, like, maniacal control over the machinery within those factories.

[Jon Stewart]

Right.

[Alex Thompson]

And so they're. And then they're doing, like, I quote someone saying, we treat the workers like our arms and legs. Like, you do this and you do that. And the number of people they've trained like that is 28 million. So larger than the labor force of California since 2008. And the number of billions of dollars they spend on machinery is, you know, $14 billion, I think, is the peak year. So some of that's public and other of this material.

[Jon Stewart]

So these documents, the numbers seem fantastic, of course.

[Alex Thompson]

And yet. Well, they do and they don't. Right. So. So 55 billion is a year. 55 billion is per year. That's the investment. A lot of that is training costs for the employees in China. And the number of employees, like, per Tim Cook's public estimate. Right. Is 3 million people are assembling iPhones and other Mac products in China.

[Jon Stewart]

But these aren't just low level, like.

[Alex Thompson]

Oh, it's a million people doing lots of unskilled jobs. The ones that Howard Lutnick wants to bring back to America. Yes. And lots of PhDs at Foxconn.

[Jon Stewart]

Right.

[Alex Thompson]

Sophisticated.

[Jon Stewart]

Right.

[Alex Thompson]

But my point is, like, lots of times people think there's great vocational training in China. The vocational school in China is Apple.

[Jon Stewart]

They've trained all these workers.

[Alex Thompson]

Yes. They've done a huge job. So let me just put the 55 billion in context. I could not find any corporate equivalent for how much someone is investing in another country. So I had to go to government efforts. So you look at something like the Chips act. Right. Biden's Flagship plan. Let's bring chip fabrication back to America. That's 53 billion over four years. Right. Another way of saying that Apple is investing quadruple what the Commerce Secretary called a once in a generation investment in America. So that's nuts. And then you go back to, then you go back to the Marshall Plan and you're thinking, okay, so maybe it's like half of the Marshall Plan, something like that. Like, that's going to be crazy. People are going to relate to that. So I take the Marshall plan spending from 1948 to 1952, right. This is sort of like America saving Europe after the World War II, and you convert it to $2015, and it's half the annual spending of what Apple's investing in China.

[Jon Stewart]

And this is $130 billion in 16 countries.

[Alex Thompson]

16 countries versus one versus one country. Yeah. And it's not one. Right. It's like the modern equivalent of the Soviet Union, like it's our biggest adversary. And so, you know, I sort of end the book not to sort of like, get so ahead of myself here.

[Jon Stewart]

No spoilers.

[Alex Thompson]

Yeah, yeah, yeah.

[Jon Stewart]

Oh, my God. Does Apple die?

[Alex Thompson]

Well, paperback version.

[Jon Stewart]

I don't want to tell people.

[Alex Thompson]

So I say that as China, you know, as their GDP eventually overtakes America, and especially because they're doing so good in the advanced electronics sector, more people are going to ask, how did they do it? Like, how did they go from such poverty 50 years ago into the world's greatest maker of like, military weaponry and advanced electronics? And a big portion of the disquieting answer is year in, year out, Apple taught them.

[Jon Stewart]

They do this, by the way. This is China. This is not to single out. This was a decision that, that Apple made. Not with this intention.

[Alex Thompson]

No, not at all.

[Jon Stewart]

It was, you know, it began, I guess. Well, it began with shareholder capitalism, I guess in the 80s.

[Alex Thompson]

Yeah, yeah.

[Jon Stewart]

I mean, not to.

[Alex Thompson]

That's very much in the book. Yeah, absolutely right.

[Jon Stewart]

I mean, it's that ethos of you do what's best for the shareholders. So you're, it's, you're searching out the cheapest labor, the lowest product. But it really, it seemed like, like Xi Jinping in. Was it 2013 is what made this so fraught? Would that be correct to say?

[Alex Thompson]

Well, yes, because I would say so. My thesis is really that they sleepwalked into this crisis. I mean, I cannot blame Apple for moving into China in the early 2000s. For starters. The American consensus with that was that we're going to inculcate the Join the wto.

[Jon Stewart]

They came in.

[Alex Thompson]

I mean, there was broad political support to do that. The problem was when Xi Jinping really turns China in an authoritarian and belligerent direction.

[Jon Stewart]

Right.

[Alex Thompson]

It's not like Apple was on the sidelines, not noticing they were attacked within 36 hours of Xi ascending to the president.

[Jon Stewart]

Tell them about Consumer Day.

[Alex Thompson]

Consumer Day is something that happens March 15th every year in China, and basically it goes back to 1991. There's someone in the audience, like, I know Consumer Day. Yeah, I have read this.

[Jon Stewart]

Beware the eyes of Consumer Day.

[Alex Thompson]

Okay? So companies are called out for, like, not living up to the socialist ethos, okay? And it's increasingly western companies in the. In the mid 2000s, and McDonald's is 2012, and the book opens with 2013. Apple is attacked on Consumer Day, and it's for warranty differences. Of all things, it turns out to.

[Jon Stewart]

Be not actually true. Right.

[Alex Thompson]

Well, it's. Okay, so how much time do we have? It's the most fascinating part of the.

[Jon Stewart]

Digital has no other program. Literally, there's no other program. It's just us chickens.

[Alex Thompson]

I'm gonna give you the 32nd version, but this is four chapters in the book, okay? Demand for iPhone in China after 2010 is wild. Okay? There are four stores for 1.4 billion people. Okay? So one store per 350 million people. And the iPhone becomes the most conspicuous, like, status symbol imaginable on the country. In the country. And so what happens is these gangsters, called yellow cows, notice this imbalance, and they begin paying migrants by the bus load to come over to the store and snake around the store, 6,7000 people at times, to buy as many iPhones as possible. And then they go to a city like Chongqing, population 32 million. Number of Apple stores, zero. And they find ways, legal and illegal, to sell iPhones at more money. They're making more money than Apple per iPhone. So it's absolutely wild. What happens is Apple eventually catches onto this a little bit because they're doing nefarious things. They're buying phones in the US they're using fake ID. They're buying phones for less than $100 so that they can make even more fat margins on them and stuff. And so they begin actually burning out the CPU of the phone, deliberately breaking it in the process, but rendering it. You can't. You can no longer see where it's come from, right? So they're masking the retail origin. Okay? So what happens is Apple catches wind of this, and they begin refurbishing These deliberately broken units rather than replacing them.

[Jon Stewart]

Right.

[Alex Thompson]

By refurbishing it, they're doing something that they're not doing in other countries. Right.

[Jon Stewart]

So they're actually take that as an insult to China.

[Alex Thompson]

Yeah, exactly. So without probably knowing the full story, cctv, the just like the state sponsored CNN of China attacks Apple for treating the Chinese in a way that's inferior to the rest of the world. Okay, that was 12 years ago, reported by every media outlet. And like they never figured out what the story was with the yellow cows and how it came to be. Oh, so that's why it's so significant. That's why it's the prologue.

[Jon Stewart]

And so at that moment shares of Apple then start to go down. It becomes less popular in China. Yes, it's so I don't, I honestly.

[Alex Thompson]

Don'T remember if shares really fall down. To be honest, the media's like eyeballs were not on China at all during the this time. I meant in China, but sales in China.

[Jon Stewart]

Sales in China.

[Alex Thompson]

Yeah, they first, they sort of freeze and then they actually sink.

[Jon Stewart]

That's right, yeah. So Apple's response to that is what?

[Alex Thompson]

Placate local officials, hire a team of people that call themselves the Gang of eight. These are the first senior people living in China title.

[Jon Stewart]

Yeah.

[Alex Thompson]

And yeah, so these are sort of eyes and ears of Cupertino living in China. First time they've had senior people there and they basically strategize like what's our message to Beijing? Like why are we in the country and how do we demonstrate to them we're not this exploitative power? Look at how much we're doing for you. They're the ones who come up with we're investing like a nation building effort in China. Like get off our back. You have no idea how much we're helping you.

[Jon Stewart]

Right.

[Alex Thompson]

And the fruit really is in the pudding. Fruit and pudding. Whatever. Proof is in the pudding. Proof is in the pudding. The top smartphone makers in the world these days are all, are all Chinese. Right. So Oppo, Vivo, Huawei, Chowmate, they have 55% global market share. And my sort of comment on this is like, like we think iPhone killed Nokia. IPhone never had more than 20% global market share. They're not big enough to have killed Nokia. Who killed Nokia? The Chinese competition. Why did the competition, Chinese competition do so well? Because Apple trained all their suppliers so.

[Jon Stewart]

They trained their competitors to build a product that would be commensurate with their product but would be a Chinese owned company. And those companies start to gain. Apple start to Gain market share on Apple.

[Alex Thompson]

Yes. So the early years of making the iPhone, Apple was really proprietary about all its processes. It would not want those suppliers to, like, market their opportunities, their technical capabilities to everybody else. But what happens is when they, like, obviate the need for a new design by Jony. I've taking a corner and like, getting rid of aluminum or something, and that's.

[Jon Stewart]

The whole deal for Apple. Beautiful. The shit's beautiful.

[Alex Thompson]

Yeah. But if you sort of remove some. Some aspect of the phone and you no longer need that supplier and they're so dependent on you, well, what happens? They go bankrupt. So instead, Apple begins to say, that's a problem for us. So we deliberately say to our suppliers, however fast you're growing with us with Apple, grow that fast with somebody else. Because otherwise you're going to be too dependent.

[Jon Stewart]

Because they don't want to get blamed for.

[Alex Thompson]

Exactly. But if I'm building a component for an iPhone, what is the skill set I have and what can I do with it? Of course I'm going to supply Huawei and Oppo and Vivo. That's the only logical thing to do.

[Jon Stewart]

So they now have a real problem on their hands. They have trained their competitors and made it part of their business model that their competitors get healthy and do that. And they're about to face a real struggle. And someone saves them. Who is it that saves them? Patrick. Who? Patrick, I read your book.

[Alex Thompson]

So my thesis is who?

[Jon Stewart]

Somebody declared something about Huawei that puts Apple back on.

[Alex Thompson]

Somebody declared something about Huawei.

[Jon Stewart]

The Trump administration said that Huawei was a security thing.

[Alex Thompson]

Oh, yes, okay, right. So in 2000, don't you read the.

[Jon Stewart]

Books I give you to?

[Alex Thompson]

So in 2019, Huawei, China's national champion, outsells the iPhone globally. Apple is panicking about this. And I've got all these internal emails that have never been reported on where, I mean, Tim Cook and others basically understand for weeks ahead of an earnings call, Right. That Huawei is the reason why their phone isn't selling well. And they deliberately obfuscate this from.

[Jon Stewart]

That's one of my favorite parts of the book.

[Alex Thompson]

I mean, the chapter is called Five Alarm Fire, because a VP at Apple, that's what he describes the situation like, how do we get sales to be better? And Tim Cook tells deputies, quote, this is a disaster. We need all hands on deck now. And then when he speaks to investors a week or two later, all is fine. Internally, China sales forecast is actually shrinking. It's not growing slowly, it's shrinking. And they don't Tell investors any of this. So that's some. That's a crazy thing. Now Trump comes into office basically saying he's going to get his users, his consumers as citizens. What am I trying to say? His fans. His fans to boycott Apple.

[Jon Stewart]

Yes.

[Alex Thompson]

He's really harsh on Apple.

[Jon Stewart]

That's right.

[Alex Thompson]

Wants everything to be built in America.

[Jon Stewart]

That's right. Wants them to come back. He's laying the wood on instead.

[Alex Thompson]

He totally saves them.

[Jon Stewart]

Yes.

[Alex Thompson]

Because when Huawei is at its peak, he goes after Huawei, deprives them of using Google, which of course makes Android.

[Jon Stewart]

Declares them a security threat.

[Alex Thompson]

Declares them a security threat and deprives them of using, you know, wonky things like Qualcomm 5G chips.

[Jon Stewart]

Chips.

[Alex Thompson]

Huawei's business nearly collapses. They lose $30 billion of revenue in a year and their market share really tanks. They have to like hive off assets and stuff. Great for a while. I mean the only company that really benefits from that is Apple. So their market share in China like doubles from 9% to 17%. So they do really well. But now in Trump 2.0, Huawei's had all this time to really work hard and so they're now, they're sort of back with a vengeance. So now in the global smartphone world, there's iOS, there's Android and there's HarmonyOS. This is my guess. Harmony OS will become the de facto standard for all operating system phones in China.

[Jon Stewart]

Wow, that's a guess, right?

[Alex Thompson]

I think an educated one. And then the question is, do they then market that overseas and you sort of have like a Chinese firewall iPhone becoming, you know what I find so interesting about.

[Jon Stewart]

So we think about step out now in a macro view, we think about these companies as kind of monoliths, as monopolies and all this sort of thing. And the American viewpoint is always trust busting. We got to go in and break up these companies. This is a somewhat of a monopolistic operation and. But they are going to break themselves up by training competitors to compete with them. They're actually creating a far more competitive market than ever would have given our standard business practices. So the irony is they create a more competitive market in an authoritarian state.

[Alex Thompson]

Yes. It's so much worse than that.

[Jon Stewart]

Come on, come on. Okay, so talk to me. So much worse than that. Really? Okay.

[Alex Thompson]

The reason it's worse than that.

[Jon Stewart]

Yes.

[Alex Thompson]

Because they're not just creating phones. What else can you do if you've got like world leading electronic skills? First of all, what's an evidence it's a smartphone on Wheels. So the reason why EVs in China are so damn good is that Apple taught all their suppliers and the suppliers of phones like Huawei and Xiaomi.

[Jon Stewart]

Tesla did the same with their factory.

[Alex Thompson]

And I have a fascinating section on Tesla, who specifically hires Apple people in China to run the same playbook.

[Jon Stewart]

Like so. Okay, yeah.

[Alex Thompson]

And sorry, the reason why I said it was worse. I haven't got to that point.

[Jon Stewart]

Oh God.

[Alex Thompson]

All right, what else can you build? Drones, military weaponry. Right. So you're sort of facilitating the potential annexation of Taiwan by giving out these skill sets for the last quarter century.

[Jon Stewart]

You know, you could have said that in the book. I didn't see that. It's, it's, it's, it's fascinating. But here's the other part that I think is that's when you realize this whole idea of reshoring and industrialization that the idea that tariffs this weirdly simplistic, you know, cudgel that we're going to do there is so woefully short as far as this. This is the result of years of intense state run industrial planning that was intentional, it was purposeful. It is, I mean, it's literally called Project 2025 in China. It's China's Project 2025.

[Alex Thompson]

Yeah.

[Jon Stewart]

So when you think now and Apple says, oh, we're gonna spend 500 billion back in the United States, where and how.

[Alex Thompson]

So I'm so glad you mentioned this. It's such ludicrous nonsense. Okay. It has to be the press release that says that we're going to spend $500 billion in us literally says, and we'll create 20,000 jobs. Like how bad would a government program be if it spent $500 billion and all it got was 20,000 jobs? Right? Right. So the money that makes no sense.

[Jon Stewart]

Right. If it were.

[Alex Thompson]

If it were true, then you would have factories springing up in every state you could think of with jobs for engineers here, there and everywhere. This is only my educated guess, but I can't think of how the math adds up anywhere else. They are counting in the $500 billion share buybacks and dividends because Apple spends more than $100 billion a year on share buybacks. 70% of their investors are in America. Ipso facto, that's kind of an investment in America. Right. So that's the only way that because.

[Jon Stewart]

We are now living through an announcement presidency. Because that really is what we are living through. This presidency is the mission accomplished presidency. It's just a dude on a destroyer with a giant banner behind him that says mission accomplished, even though it has no basis in reality. And that's how we get things done. And so this idea of like $15 trillion in investment coming back to America, you're like, where? How? But what's so despicable about the entire thing is we could have done all this here. All of it.

[Alex Thompson]

We could have. No, I'd actually disagree. We were so close to being best friends.

[Jon Stewart]

What is happening?

[Alex Thompson]

So China has things we'll never compete with, like density of population.

[Jon Stewart]

Yes.

[Alex Thompson]

And the way that the rural population sort of is actually not allowed to raise their children in places like Shenzhen. So they have to be floating around.

[Jon Stewart]

We can do that here.

[Alex Thompson]

So, like, I'm a big fan of friend shoring rather than reshoring.

[Jon Stewart]

Right.

[Alex Thompson]

We should be doing what we did in China, but with allied nations like India, like Mexico, but it's probably not going to happen in Pittsburgh.

[Jon Stewart]

But we have to also build up, though, those ancillary businesses. By allowing this, we really did hollow ourselves out.

[Alex Thompson]

Oh, absolutely.

[Jon Stewart]

I'm convinced.

[Alex Thompson]

The only thing I would say is that that really happened in the 80s and 90s.

[Jon Stewart]

Yes.

[Alex Thompson]

And Apple was the last holdout that did not do that.

[Jon Stewart]

This is meant, by the way, to be so hypercritical of Apple. This is the example, but this is merely one of myriad examples of how our industrial policy got the way it got so completely.

[Alex Thompson]

I sort of refer to the book sometimes as a Trojan horse, where what I'm trying to sell you on is the sex appeal of the world's greatest company. But what you're actually going to learn about is some Chinese history, the importance of the US China tech battle, and things like supply chains. But if I said, john, can you have me on the show? I've got a great book about supply chains, you'd be like, no, thanks.

[Jon Stewart]

Yeah, I'm sorry, you were saying something about something, but I don't remember what that was. The book is phenomenal.

[Alex Thompson]

Thank you.

[Jon Stewart]

Truly, like, jaw dropping and, like, generally true. Thank you so much for being here.

[Alex Thompson]

Thank you.

[Jon Stewart]

Apple in China, available now. Patrick McGee. No, but before we go, we're check in with your host for the rest of the week, Ronny Chang. Ronny, what's happening, my man?

[Alex Thompson]

Hey.

[Jon Stewart]

Thanks, John.

[Alex Thompson]

I'm hosting a Daily show this week.

[Jon Stewart]

And I have no idea what the hell Jordan Klepper is doing here.

[Alex Thompson]

Well, I. I don't want to interrupt your week, but my new special is airing tonight right after the Daily Show.

[Jon Stewart]

Oh, the new special.

[Alex Thompson]

Oh, let me guess.

[Jon Stewart]

It's called something like maga.

[Alex Thompson]

The Next Generation.

[Jon Stewart]

Yeah, that's exactly what it's called. Oh. Oh, yeah.

[Alex Thompson]

Oh, yeah.

[Jon Stewart]

And I bet you're talking to, like, young Trump voters about the future of America or whatever. Again, dead.

[Alex Thompson]

Nailed it.

[Jon Stewart]

That's spot on.

[Alex Thompson]

That's what it is.

[Jon Stewart]

Yeah. Yeah. And I bet it ends on Comedy Central and then it streams on Paramount and then it, like, goes up on YouTube at midnight. Yeah, all of that.

[Alex Thompson]

All of that is true.

[Jon Stewart]

Yes.

[Alex Thompson]

But why are you using that voice?

[Jon Stewart]

Because I love and respect your work. I just use sarcasm to shield my real emotions. Duh.

[Alex Thompson]

You know, actually, you know, some of us were gonna go out and watch it together. You're welcome to come. Oh, sounds like a nightmare.

[Jon Stewart]

Thank you so much for your friendship.

[Alex Thompson]

I'll see you there. Yeah.

[Jon Stewart]

That was really beautiful, guys. That's really nice. Bronnie Chang and Jordan. Clap, everybody. Right there on screen. Check out Jordan. Special airing tonight. Here it is. Your moment is ever. Let's show. This is the first time that we've been here, so this is so cool. Let's go, Nick. Six and five. Let's go. My son's first experience with the New York Knicks. This is the greatest day of my life. Oh, Nick. Explore more shows from the Daily show podcast universe by searching the Daily Show. Wherever you get your podcasts, watch the Daily show weeknights at 1110 Central on Comedy Central and stream full episodes anytime on Paramount plus.

[Alex Thompson]

Paramount podcasts.

[Jon Stewart]

You're listening to an iHeart podcast.