Cook Built Apple in China, But Beijing Owns the Keys – Image for illustrative purposes only (Image credits: Unsplash)
Apple’s announcement in April 2026 marked the end of an era. Tim Cook, who steered the company from near-collapse to a $4 trillion giant, prepared to hand the reins to hardware engineering chief John Ternus on September 1. Yet Ternus inherits more than a thriving business; he steps into a reality where China’s manufacturing prowess underpins Apple’s success, but Beijing’s authority dictates the terms.[1][2]
Cook’s Transformation of Apple’s Operations
Tim Cook joined Apple in 1998 as the company teetered on bankruptcy. He swiftly restructured its supply chain, shuttering factories in California, Singapore, and Ireland. Instead, he turned to contract manufacturers in Asia, forging a pivotal partnership with Foxconn founder Terry Gou around 2000.[3]
Foxconn’s Shenzhen campus, designed to house and employ 250,000 workers, became a cornerstone. By 2010, after the iPhone 4 launch, the Zhengzhou facility – known as iPhone City – ramped up to produce nearly half the world’s iPhones. Cook dispatched thousands of engineers to train local workers, embedding Apple’s precision standards into China’s industrial fabric.[1]
Billions Poured into China’s Ecosystem
Apple’s commitments deepened over time. Between 2016 and 2021, the company invested $275 billion to upgrade Chinese suppliers – more than five times the $52.7 billion allocated by the U.S. CHIPS and Science Act.[1] Nearly 95% of Apple’s products now assemble in mainland China and Taiwan, with half of its top 200 suppliers maintaining facilities there.[1]
This strategy fueled explosive growth. China revenue reached $64 billion in fiscal 2025, accounting for about 19% of total sales and rivaling entire industries like Boeing’s global business.[2] Cook frequently visited, meeting officials and praising the ecosystem. In March 2024, he declared to China Daily that no supply chain worldwide proved more critical, a relationship nurtured over nearly three decades.[1]
Yet these investments created an intricate web. JP Morgan analysis highlights Apple’s high exposure, ranking it second among major U.S. firms for China risks, factoring in supply chains, labor issues, and politics.[1] Diversification efforts to India and Vietnam gained traction amid COVID disruptions and U.S. tariffs, but full replication remains elusive.
Navigating Beijing’s Regulatory Demands
Apple’s China operations demand compliance with Communist Party directives. In 2017, the company removed dozens of VPN apps from its App Store at Beijing’s behest, limiting access beyond the Great Firewall. Cook defended the move on an earnings call, stating Apple followed local laws everywhere it operated.[1]
Similar patterns emerged with AI. Apple Intelligence features for China undergo rigorous approval, tested against 2,000 sensitive prompts on topics like Tiananmen Square, Taiwan, Xinjiang, and Party authority. Partnerships with Alibaba and others seek censored versions compliant with Cyberspace Administration rules.[1] Reports also surfaced of lobbying against U.S. Uyghur Forced Labor Prevention Act provisions in 2020.
- VPN app removals in 2017 restricted internet freedom tools.
- AI censorship blocks discussions of historical events and politics.
- Supply chain scrutiny ties to potential coercive labor programs.
- Regulatory approvals dictate product features and market access.
These concessions secured operations but drew criticism. Cook contrasted U.S. privacy stances with China realities, noting in 2017 that countries set their own rules.[1]
Ternus’s Inheritance: Opportunities and Perils
John Ternus assumes leadership amid a China rebound. iPhone 17 sales propelled Greater China revenue to $25 billion in the latest quarter, up sharply from prior lows, securing a 19% smartphone market share.[2] Features like “Hermès Orange” resonated with status-conscious buyers, while memory shortages favored Apple’s buying power over rivals Huawei and Xiaomi.
Still, vulnerabilities persist. Sales plunged 24% early in 2024 amid competition and state bans on Apple devices in government use. Beijing views technology as a national priority under Xi Jinping, who vowed in 2022 to dominate core technologies.[1] U.S. pressures, including tariffs and diversification mandates, complicate matters. Analysts like IDC’s Nabila Popal emphasize supply chain execution as Ternus’s early test, balancing “China-plus-one” without backlash.[2]
Cook transitions to executive chairman, focusing on policymaker ties, leaving Ternus to manage factories employing millions indirectly and an ecosystem Apple helped forge but cannot swiftly abandon.
Stakeholders Weigh the Path Forward
Investors celebrate Cook’s returns, with market value swelling $682 million daily on average.[4] Chinese workers and suppliers benefited from training 28 million since 2008 and billions in upgrades. U.S. policymakers eye risks, from Taiwan tensions to technological rivalry.
For Ternus, the equation demands nuance. Foldable iPhones loom, challenging Huawei’s lead, while AI delays hinder gains against local innovators like Xiaomi’s EVs. Apple operates dual realities: vocal in the West, compliant in China. Whether this model endures or evolves will define the next chapter.[2]
