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Patrick McGee: The Dark History of How China Captured Apple | Vanity Fair

Thought Leader: Patrick McGee
May 13, 2025
Source: Vanity Fair

In his new book, Apple in China, Patrick McGee examines how Tim Cook unwittingly led Apple right into the heart of Trump’s trade war.

In May 2016, Tim Cook and two other top Apple officials arrived at the headquarters of the Chinese Communist Party in central Beijing to strike an agreement with the Chinese government. At the time, Donald Trump was still running for president, campaigning on an anti-China platform and a promise to get Apple “to build their damn computers and things in this country!”

But Cook was in Beijing that day to do the opposite: to impress upon President Xi Jinping’s government that Apple was so committed to China that it planned to spend $275 billion in the country over the next five years. “I call it a Marshall Plan for China, because I could not find any corporate spending coming close to what Apple was spending,” said Financial Times journalist Patrick McGee, who writes about this and other moments illustrating Apple’s role in enabling China’s rise in his new book Apple in China: The Capture of the World’s Greatest Company.

The $275 billion figure (which was previously reported by The Information) came from internal documents McGee obtained as part of his reporting. To put that staggering sum in context, McGee said, the Marshall Plan—the United States’ post–World War II investment in Europe, which is considered to be among the greatest nation-building exercises of all time and which reestablished the global order for decades to come—was about half that, adjusted for inflation.

Through interviews with more than 200 sources, more than 90% of whom worked for the tech giant at some point, the book traces the history of the company to flip the usual narrative about Apple and China on its head. By expending such exorbitant resources in China and training so many Chinese workers with its novel, hands-on approach to micromanaging foreign factories, Apple facilitated “an epic transfer of knowledge” to China, McGee told Vanity Fair. He forcefully argues that Apple may be the single biggest supporter of President Xi’s “Made in China 2025” plan to break away from the West and become a global technological superpower. “That’s an outlandish claim,” McGee acknowledged in our interview, “but I think I provide enough ammunition to support it.”

In a statement to Vanity Fair, Apple said that the book is “untrue” and “full of inaccuracies,” and that Apple didn’t fact-check the book. Apple declined to comment to Vanity Fair on specific claims raised in our interview with McGee.

The book tells the story of how Apple engineers cycled into and out of China, working hand-in-hand with suppliers to imagine new ways to manufacture whatever Apple’s acclaimed former chief design officer, Jony Ive, could dream up. McGee’s reporting shows how Apple’s false starts in manufacturing its products in other places—from the Czech Republic to California—led it to China. And he argues that Apple’s utter reliance on China made it vulnerable to President Xi’s threats, at times making the company’s leaders turn a blind eye to the country’s authoritarian tendencies.

McGee depicts Cook as a leader who unwittingly led Apple right to the center of a geopolitical quagmire by conceding to the Chinese government, right at the very moment he should have been executing a backup plan. “Tim Cook is, financially, probably the most successful CEO of the last 20 years,” McGee said. “I think the more you know about how he got so financially successful for Apple, the more you begin to question the whole paradigm that Apple operates in.”

As Trump’s trade war with China continues to simmer, Apple once again finds itself smack in the center of two feuding global superpowers, including one that, according to McGee at least, it played a heavy hand in creating.

Vanity Fair: Why did you decide to root this history of Apple in its ties to China?

In the summer of 2022, I had the reporter’s problem that I had become really bullish on Apple. That’s not a great place to be, because it makes it look like you drank the Kool-Aid of the company you’re covering. But I just started thinking, ‘Wow, Apple’s really got it made.’ There was just this steady accretion of the iPhone ecosystem.

After I wrote an article or two about that, I had to flip the question on its head and be like: What could stop this from happening? That’s when I began interviewing people who used to go to China, on behalf of Apple, and began to very quickly realize that’s clearly the company’s Achilles’ heel—way more so than antitrust. Antitrust takes years of court battles, and maybe some App Store revenue is going to be wiped away. But if something happens in China, they don’t have products.

I also discovered a position in Apple called “manufacturing design engineer.” These are the people who, beginning the late ’90s, before China even entered the picture, began going to Asia—mostly Korea, mostly Taiwan in these years—and co-invented processes to actually build at scale whatever Apple product Johnny Ive has come up with.

This is crucial: Apple doesn’t just hope that suppliers come up with better, lighter, stronger components and then incorporate them into the next iPhone. It is intimately working in hundreds of factories across China, making those innovations happen, and that’s how the iPhone stays ahead of everybody else. Unwittingly, the consequence of that is this epic transfer of knowledge, and that’s the story I wanted to tell.

The book starts with this anecdote about Consumer Day in 2013, when Chinese state television criticized Apple for supposedly treating Chinese consumers poorly. Why did you feel like that was the right place to begin?

That was Apple’s political awakening. Xi Jinping had basically been in office as president for 36 hours when state-sponsored media attacked Apple. There was a “there’s a new sheriff in town” moment immediately, and Apple realizes, over the course of three weeks, before Tim Cook issues an apology in Mandarin on Apple’s China website: Oh shit, we don’t understand this country. We’re doing phenomenally well using China as a production base, and we’re doing phenomenally well selling iPhones to the Chinese. But we don’t have the cultural acumen to even understand what we’re being threatened with or what we’re being accused of. They had nobody senior living in the country.

So they come up with a strategy to have eight people—the Gang of Eight—live in China, basically overseeing anything you can think of. But really, their role is to be the eyes and ears of Cupertino in China. Their immediate task is: What is our story to the Chinese government?

You write about the sheer size of the investment that Apple ultimately made in China—$55 billion every year for five years, adding up to $275 billion. You compare that to what Congress allocated in the CHIPS and Science Act: $52 billion. That’s $3 billion shy of what Apple was spending every year in China.

Isn’t that crazy?

It’s nuts.

That’s from an internal document. And that $55 billion is not counting the components. I’m not adding up the costs of aluminum and chips. This is exclusively the cost that stays in China. It’s basically the employee training costs, the wages of those employees, construction of Apple stores, and the billions upon billions of dollars of machinery that Apple puts on suppliers’ production lines. It tags them as being for Apple use only. They’re not supposed to be used for other devices, but “supposed to” is the keyword there.

You describe Apple as “sleepwalking” into this situation. Did they really not see what they were setting themselves up for?

I know this verbatim because it’s my favorite quote in the book. Somebody over coffee said, “Are you sure you’re not overthinking your thesis? You keep talking about geopolitics, but I was there in the 2000s when we were setting up production in China, and I can tell you, we weren’t thinking about geopolitics at all.” That section ends, “Precisely.”

The other thing is just that Washington was encouraging trade and even the manufacturing of stuff in China. The American worldview was that we’re going to inculcate liberal values in the world’s biggest country, and we’re going to do for them what we did for Taiwan, and it’s going to be the next big democracy.

I hold no blame for anyone choosing to manufacture in China in 2000. It’s a defendable action. I think where they erred is by doubling down after Xi Jinping made it clear that he wasn’t happy with Apple. At that point, they could have spent more money building resilience in their supply chain.

You write about Tim Cook and the way he managed Trump 1.0, allowing Trump to take a victory lap for things like a plant manufacturing Apple Pros in Texas that had been operational for years. How do you see that playbook continuing, escalating, or changing now in Trump 2.0?

We’re so early into the term that I don’t know. The first round of Liberation Day tariffs would have really short-circuited Apple’s attempts to move some stuff from China to places like Vietnam and India, because they were going to be hit with tariffs as well. That was going to put the company in a massive bind. Of course, Trump blinked multiple times. I think more likely it’s because the White House just was given a crash course on how unlikely it is that the iPhone is ever going to be built in America, let alone that it’s going to happen in a matter of two or three months, or even two or three years.

You had Apple literally lose $760 billion in a matter of days. Every American who invests in index funds has Apple as their biggest holding. You didn’t need Tim Cook. You just needed that magnitude of a fall for Trump to totally reverse course.

But what’s going to come up next? It’s tough to say. If the book makes a convincing case that Apple is the biggest supporter of “Made in China 2025,” maybe the next meeting with Tim Cook’s going to go a little differently than the last one.

After Liberation Day, Trump did exempt tariffs on smartphones and computers from China, which Cook got a lot of credit for. But reading the book, it feels like giving Apple an exemption is just about the last thing you’d do if you wanted to weaken China.

Absolutely. It’s exposed how strategically naked Liberation Day was. Now we have tariffs on Chinese-made kitchenware, toys, action figures, bedding, things we don’t really need factories in Ohio to be engaged in. It’s probably great if consumers can just get that stuff on the cheap.

You describe Apple as “sleepwalking” into this situation. Did they really not see what they were setting themselves up for?

I know this verbatim because it’s my favorite quote in the book. Somebody over coffee said, “Are you sure you’re not overthinking your thesis? You keep talking about geopolitics, but I was there in the 2000s when we were setting up production in China, and I can tell you, we weren’t thinking about geopolitics at all.” That section ends, “Precisely.”

The other thing is just that Washington was encouraging trade and even the manufacturing of stuff in China. The American worldview was that we’re going to inculcate liberal values in the world’s biggest country, and we’re going to do for them what we did for Taiwan, and it’s going to be the next big democracy.

I hold no blame for anyone choosing to manufacture in China in 2000. It’s a defendable action. I think where they erred is by doubling down after Xi Jinping made it clear that he wasn’t happy with Apple. At that point, they could have spent more money building resilience in their supply chain.

You write about Tim Cook and the way he managed Trump 1.0, allowing Trump to take a victory lap for things like a plant manufacturing Apple Pros in Texas that had been operational for years. How do you see that playbook continuing, escalating, or changing now in Trump 2.0?

We’re so early into the term that I don’t know. The first round of Liberation Day tariffs would have really short-circuited Apple’s attempts to move some stuff from China to places like Vietnam and India, because they were going to be hit with tariffs as well. That was going to put the company in a massive bind. Of course, Trump blinked multiple times. I think more likely it’s because the White House just was given a crash course on how unlikely it is that the iPhone is ever going to be built in America, let alone that it’s going to happen in a matter of two or three months, or even two or three years.

You had Apple literally lose $760 billion in a matter of days. Every American who invests in index funds has Apple as their biggest holding. You didn’t need Tim Cook. You just needed that magnitude of a fall for Trump to totally reverse course.

But what’s going to come up next? It’s tough to say. If the book makes a convincing case that Apple is the biggest supporter of “Made in China 2025,” maybe the next meeting with Tim Cook’s going to go a little differently than the last one.

After Liberation Day, Trump did exempt tariffs on smartphones and computers from China, which Cook got a lot of credit for. But reading the book, it feels like giving Apple an exemption is just about the last thing you’d do if you wanted to weaken China.

Absolutely. It’s exposed how strategically naked Liberation Day was. Now we have tariffs on Chinese-made kitchenware, toys, action figures, bedding, things we don’t really need factories in Ohio to be engaged in. It’s probably great if consumers can just get that stuff on the cheap.

But we don’t have tariffs on the places where, strategically, you would want there to be more of an American presence. The more that we’re proficient at building electronics, the better our drones are going to be, the better our military weaponry is going to be. Having no tariffs on all of that and letting China continue to excel there, with Apple engineers continuing to help them day-in day-out for the next four years, that’s a ludicrous position to be in. [Editor’s note: As of Monday, the U.S. and China have agreed to a 90-day rollback of certain tariffs.]

You tweeted that your reporting led to discoveries that had your “jaw on the floor.” What’s one of them?

My favorite part of the book is about the “yellow cows,” [a slang term to describe organized scalpers] that effectively built a gig economy and distributed iPhones at marked-up prices around the country. The yellow cows found ways to make more money per iPhone than Apple. They were buying them using fake IDs in America on 24-month contracts. They would pay the first month and not ever care to pay the following 23 months. They’re getting iPhones at less than $100, and they were going to cities like Chongqing—population: 32 million, number of Apple stores at a time: zero—and selling them for up to $1,000.

In 2010, the Pudong Apple store ran out of inventory. There’s a sit-in at the store, and the scalpers who have been hired to buy the iPhones won’t leave. They’re more scared of these gangsters that have plucked them from their village and know where they live. If they don’t come back with two iPhones and put them in the suitcase that goes off to some other city, there’s going to be hell to pay.

This dramatic incident unfolds. Police show up. The mayor shows up. They can’t get anyone to leave. After 11 p.m., there’s still 1,500 people who won’t leave the store, and 100 black-clad martial arts experts show up, no weapons, and they’re there to take care of business and instill fear. When a young migrant woman takes out her camera to take a picture, this guy grabs her by the scalp, takes her behind the Genius Bar, and beats her so bloody that they have to order new granite from Italy because the blood can’t be washed out.

A source of mine calls this a “mini-Tiananmen” that still gives him nightmares 14 years later.

Patrick McGee offers sharp insights into the cutting edge of technology and business, drawing on his experience as a Financial Times journalist covering Silicon Valley and the global tech economy. His speaking engagements are managed exclusively by WWSG. To host him for as your event speaker, contact us!

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