【Epoch Times, April 29, 2025】As tech giant Apple expands its presence in India, the Chinese Communist Party is obstructing Apple’s efforts to shift its manufacturing equipment from China to India. Experts believe that Apple’s departure from China has a significant psychological impact on the Chinese Communist Party. Beijing is concerned about losing its “world’s factory” status and fears that other multinational companies might follow suit. However, such restrictions may inadvertently stimulate foreign enterprises to more actively expand their presence in Southeast Asia, India, and the Americas, resulting in unintended consequences.
According to reports, amidst the global tariff policies led by US President Trump and the escalating US-China trade tensions, Apple urgently needs to relocate its production lines away from China, with India being a key destination to enhance its manufacturing capacity.
Apple’s long-term goal is to move approximately half of its iPhone production capacity out of China. This year, it plans to increase iPhone assembly production in India by around 10%, primarily to cater to the needs of the US market. Currently, India assembles 30-40 million iPhones annually, accounting for 20% of the global iPhone total production.
However, Apple has encountered delays and hindrances in the process of relocating its manufacturing equipment from China to India, including obstacles and setbacks.
In addition, Taiwan’s Foxconn Group, Apple’s contract manufacturing factory in China, has also faced delays or rejections by the Chinese authorities when applying to export its manufacturing equipment from China to India.
“Apple’s expansion of its manufacturing footprint in India involves multiple strategic considerations, encompassing supply chain resilience, geopolitics, cost-effectiveness, and market potential, indicating a deep-seated strategic shift,” said Professor Sun Guoxiang from the Department of International Affairs and Business at Taiwan’s Nanhua University.
Professor Sun believes that Apple, which has long been overly reliant on China as the “world’s factory,” is now considering the de-risking of its supply chain and is pursuing a “China+1” strategy amidst the escalating US-China tech war and heightened geopolitical risks. Therefore, by establishing a “second production hub” in India, Apple aims to “diversify production bases and ensure production stability,” particularly to avoid the risk of disruption if solely dependent on China in the future.
Politically, Apple’s move to India also aims to align with the trend of “de-Chinafication” in supply chains initiated by the US government and Wall Street investors. Sun Guoxiang mentioned that this shift allows Apple to pivot towards embracing the potential of the emerging Indian market, given India’s status as the country with the world’s largest population and the second-largest smartphone market globally.
In addition to partnering with Foxconn, Apple is deepening cooperation with India’s largest conglomerate, the Tata Group. Sun Guoxiang believes that this indicates Apple’s proactive measures to counter potential Chinese restrictions and political retaliation.
“India is becoming a crucial part of Apple’s ‘post-China era,’ which will have significant implications for Taiwan’s electronic supply chain companies like Foxconn, Pegatron, and Wistron,” Sun Guoxiang stated.
In summary, Sun Guoxiang remarked, “Apple’s expansion of its manufacturing footprint in India is not merely an adjustment of factory locations but a global industry rebalancing action covering geopolitical, supply chain security, cost management, and emerging market strategies.”
Professor Ye Yaoyuan from the University of St. Thomas further stated that Apple’s strategic move to expand its presence in India is a consideration to prevent potential future disruptions between the US and China.
Although Apple’s products currently enjoy tariff exemptions amidst the US-China trade tariffs, Professor Ye believes that if the US government were to impose tariffs on Apple products manufactured in China in the future or in the event of greater disengagement between the US and China, relocating factories from China would be a reasonable strategic decision.
Furthermore, Professor Ye pointed out that labor and personnel costs in China are continuously rising, prompting Apple to shift factories to places “cheaper than China” and further reduce costs through automated factories. Therefore, he considers this move to be a correct choice both from an economic and political standpoint.
Just as Apple’s expansion into India involves multiple strategic considerations, the Chinese Communist Party’s obstruction of Apple’s relocation of manufacturing equipment also carries political and economic strategic considerations.
If major multinational corporations like Apple gradually depart from China, Sun Guoxiang believes that China’s longstanding position as the “world’s factory” will gradually erode – a scenario Beijing is eager to avoid. Therefore, the Chinese Communist Party is attempting to impede the accelerated “de-Chinafication” of global supply chains to mitigate the economic, employment, and tax impact on China. This is achieved through administrative restrictions, limiting the export of certain equipment to increase the cost and difficulty of relocation, thereby slowing down the pace of supply chain migration.
Professor Ye Yaoyuan also stated that China naturally does not want Apple to easily move its production lines, thus setting up some “policy barriers.” To some extent, the Chinese Communist Party also uses these barriers as a bargaining chip in negotiations with the US.
He mentioned, “From an economic perspective, China must find ways to prevent these companies from moving out. Politically, it hopes to use this as a bargaining chip in negotiations.”
Sun Guoxiang added that China is utilizing this as a “lever of geoeconomics to counteract the US-China tech decoupling” as it realizes it is gradually being excluded from the tech and industrial alliances led by the US and its allies. The tech decoupling between China and the US is part of the US “de-risking” policy, and therefore, Beijing has initiated non-tariff barriers and administrative restrictions to try proactively setting the terms, such as restricting exports of critical technology, materials, and equipment to countries like India to delay or disrupt the decoupling process.
Moreover, Sun Guoxiang highlighted that the US is a key influencer in the global supply chain, and if its withdrawal from China proceeds smoothly, it might trigger the follow-up actions of other international brands. Hence, Beijing is compelled to thwart Apple’s relocation to prevent a “demonstration effect” and deter other companies from following suit.
Considering India as a potential competitor to China in the regional supply chain, the Chinese Communist Party is also concerned that Apple and Foxconn’s expansion in India could assist India in rapidly rising in strategic areas like semiconductors, mobile phones, and electronics assembly, further weakening China’s manufacturing advantage. Therefore, Beijing’s obstruction of key equipment exports to India aims to stifle the momentum of India’s manufacturing sector and maintain China’s current core position in the East Asian supply chain.
Sun Guoxiang also noted that in the past, the Chinese Communist Party had emphasized that “advanced equipment should not easily flow out of the country,” including technologies deemed to have dual-use potential like machinery, automation modules, and AI sensing components. Hence, its hindrance of Apple’s relocation is also driven by intentions to uphold technology sovereignty and technological warfare.
Sun Guoxiang stated, “In essence, China’s prohibition of exporting key production equipment to India signifies a move with political warnings, economic retaliations, and strategic defense implications. This behavior underscores Beijing’s attempt to actively control the global supply chain reconfiguration, slow down the impact of the so-called ‘China+1’ or ‘de-Chinafication’ strategy on its own economy.”
Professor Ye Yaoyuan mentioned that China’s obstruction of Apple’s relocation further alerts international companies to China’s unpredictable nature, where decisions are made arbitrarily, potentially leading to unintended consequences.
Sun Guoxiang also pointed out, “Such restrictions may inadvertently stimulate foreign enterprises to more actively expand their presence in Southeast Asia, India, and the Americas, accelerating the marginalization risk of China in the global industry.”
If international corporations follow Apple in massive exodus from China, Sun Guoxiang emphasized this would first devastate China’s export-oriented economic model as foreign-funded enterprises contribute nearly one-third of China’s net export total and more than half of the manufacturing industry’s exports. Consequently, the reduced foreign exchange earnings in China would affect the stability of the Renminbi exchange rate and finance.
It is estimated that Apple alone has created over 3 million direct or indirect job opportunities in China. Sun Guoxiang believes that Apple’s relocation of production capacity will exert immense pressure on local fiscal tax revenues and employment in China and pose significant challenges to China’s “social stability.”
Professor Ye Yaoyuan also stated that as China’s unemployment rate rises and more people face joblessness, the country’s economy may experience “further internal collapse,” leading to “profound impacts.”
Sun Guoxiang further indicated that with international leaders like Apple withdrawing, China’s industrial upgrading process will encounter obstacles, causing China to fall into the risk of “being blocked and abandoned in mid-to-high-end manufacturing.” The confrontation between China and the US in tech and supply chains will become more structured, eroding China’s position in the global value chain, shaking the trust and investment confidence of international companies in the Chinese market.
In conclusion, Sun Guoxiang said, “The departure of enterprises like Apple will not only result in economic losses but also shatter the core confidence of the ‘China model,’ where China loses the support from foreign-funded manufacturing. China might enter an economic structural crisis prematurely, with rising social stability pressures and posing a significant challenge to the legitimacy of the Chinese regime.”