Speaker 1: From Bloomberg News and iHeartRadio. It's the Big Take. I'm Westkasova.
Speaker 1: Today Apple looks to expand its global reach. The story
Speaker 1: of Apple's rise to become the world's most valuable company
Speaker 1: two point four trillion dollars is also the story of
Speaker 1: its relationship with China. Apple's vast manufacturing operation there and
Speaker 1: its connections to thousands of suppliers, means it can turn
Speaker 1: out hundreds of millions of iPhones for customers around the world.
Speaker 1: But Bloomberg's chief technology correspondent Mark German reports that Apple's
Speaker 1: singular relationship with China is changing. What you saw Apple
Speaker 1: do in China over the last ten fifteen years, you're
Speaker 1: seeing that same book begin in India. I asked Mark
Speaker 1: to tell us how shifts in the global economy and
Speaker 1: rising tensions between Washington and Beijing have Apple looking to
Speaker 1: expand its operations outside China and try to replicate its
Speaker 1: success in other fast growing economies, and later in the show,
Speaker 1: senior reporter Debbie Wu in Taipei talks about why that
Speaker 1: might not be such an easy thing to do. There
Speaker 1: will be a pretty significant consequence if Apple is really
Speaker 1: looking to the couple from China entirely. That's really not
Speaker 1: going to happen. Mark. When we think about manufacturing in China,
Speaker 1: Apple is certainly one company that immediately comes to mind.
Speaker 1: This incredibly complex supply chain that they built too and
Speaker 1: from China is like nothing that's ever been done before.
Speaker 1: Can you give us a sense of how important is
Speaker 1: this supply chain to Apple's success? Apple supply chain is
Speaker 1: a monster, right, It is this sprawling operation, and the
Speaker 1: supply chain is so much more than what people think of.
Speaker 1: Right when you think of the supply chain, when you
Speaker 1: think of Apple manufacturing, you think of the idea of
Speaker 1: millions and tens of millions of iPhones, iPads other devices
Speaker 1: being popped out of a massive factory in China ship
Speaker 1: to consumers arriving on their doorsteps. But there's so much
Speaker 1: more to the supply chain. It starts actually a lot earlier.
Speaker 1: One process is actually the development of the manufacturing equipment
Speaker 1: alongside the development of the product that's created between Apple
Speaker 1: as well as its final manufacturing partner. Those partners are
Speaker 1: companies like Foxcon, Pegatron, Quanta, Gertech, and others. These are
Speaker 1: all these partner companies that Apple essentially contracts with to
Speaker 1: make the devices in Chenna. That's exactly right. Those are
Speaker 1: their contract manufacturers for a process known as FATP. That's
Speaker 1: final assembly, testing and packaging. But that's really the last
Speaker 1: part of the supply chain. There's a whole process before
Speaker 1: the products are actually manufactured. That's component sourcing. That's component production.
Speaker 1: That's mining of different materials, metals and minerals that go
Speaker 1: into the components and the products, things like tungsten and gold.
Speaker 1: That happens over a number of years before a product
Speaker 1: is manufactured. And that's something that happens globally. There's parts
Speaker 1: of the iPhone, the iPad, and the watch and the
Speaker 1: mac and Apple's other products that are sourced globally from
Speaker 1: places even like the US to Europe to Japan, and
Speaker 1: Apple pulls all those components together to do that final assembly,
Speaker 1: to do that mass manufacturing in China, and the idea
Speaker 1: of the Apple supply chain was to outsource everything, and
Speaker 1: this started over twenty years ago under Tim Cook when
Speaker 1: Steve Jobs returned to the company in the late nineteen nineties,
Speaker 1: the idea being to move away from in house Apple
Speaker 1: manufacturing and to do contract manufacturing. It lessens the costs
Speaker 1: for Apple, it lessens the risk, and you're passing over
Speaker 1: this very key part of the manufacturing process to companies
Speaker 1: that actually specialize in this type of thing. That's the
Speaker 1: Fox cons, Pegatron's quantas of the world. Right, there are
Speaker 1: specialists in this mass manufacturing. And at the time they
Speaker 1: were building this, China was the place to do it
Speaker 1: because they had the technical ability and they were able
Speaker 1: to do it much more cheaply than you could manufacture
Speaker 1: in the US. That's right. Apple started with fox Con
Speaker 1: in China in the early days of the iPod. Actually
Speaker 1: the first iPods are actually produced in Taiwan, and now
Speaker 1: you have facilities in China and elsewhere in Asia, and
Speaker 1: the idea being that these are the people who know
Speaker 1: how to do it at cost, at quality, and also
Speaker 1: in quantity. And so it was very important as Apple
Speaker 1: was driving its consumer business with the iPod, It's laptops
Speaker 1: and then eventually the iPhone and the watch and the iPad,
Speaker 1: to be able to produce in these large quantities, they
Speaker 1: needed a place to do it, and China was the
Speaker 1: place to do it while hitting all those necessary factors.
Speaker 1: And of course they want to enjoy their large margins,
Speaker 1: which on some products can top fifty percent and China
Speaker 1: was the way to help make that happen. More recently,
Speaker 1: you write though, that some cracks started to show up
Speaker 1: in this system. First when President Trump was in office
Speaker 1: and trade and political tensions between the US and China
Speaker 1: got worse, and then Trump was taking aim at Apple
Speaker 1: because they were making products in China instead of the US.
Speaker 1: And then a couple of years later when the pandemic
Speaker 1: hit and China's COVID zero policies froze up manufacturing. Can
Speaker 1: you describe how both of those things affected Apple's business. Yeah,
Speaker 1: the Apple supply chain was really unbreakable. For the first
Speaker 1: twenty years, things really, you know, went full steam without
Speaker 1: a hitch. They were successfully able to launch several generations
Speaker 1: of the iPod, the Mac, the iPhone, the Apple Watch.
Speaker 1: Everything was really great until around twenty eighteen, twenty nineteen,
Speaker 1: when Trump was in office in the US and his
Speaker 1: whole anti China push and the tariffs, that really started
Speaker 1: to show the cracks in the armor of the Apple
Speaker 1: supply chain. And it was twofold. On one hand, the
Speaker 1: worry from Apple and investors and consumers in China that
Speaker 1: the tariffs that Trump was attempting to put on Apple devices,
Speaker 1: including the iPhone, the Mac and the Apple Watch. These
Speaker 1: tariffs could be several percentage points consumers. Apple shareholders were
Speaker 1: worried that this would raise the costs of Apple products
Speaker 1: and of course hurt demand. That was one part of it,
Speaker 1: but it was twofold. The other part of it was
Speaker 1: in the middle of all the issues, the economy in
Speaker 1: China took a little bit of a hit because of
Speaker 1: these concerns. That really happened at the end of twenty
Speaker 1: eighteen early twenty nineteen. And what that did is that
Speaker 1: really hurt sales in China, hurt the Chinese economy, which
Speaker 1: in turn hurt that final supply chain. And so the
Speaker 1: combination of the economic issues in China with the tariff
Speaker 1: issues between the US and China really brought the Apple
Speaker 1: supply chain in terms of mass manufacturing, right to the
Speaker 1: forefront and brought it into question. But you know, as
Speaker 1: twenty nineteen went around, it continued, things really calmed down
Speaker 1: and normalized. Apple started to get lots of breaks with
Speaker 1: the Trump administration on tariffs. Apple basically created a dog
Speaker 1: and pony show in Texas where it manufactured the parts
Speaker 1: of the MacPro that's their highest end desktop computer. Right.
Speaker 1: They built those parts in China and then did final
Speaker 1: assembly in packaging in test of that very low quantity
Speaker 1: machine at a plant by a company called Flex in Texas.
Speaker 1: Tim Cook came there, Trump came there, Ivanka Trump. They
Speaker 1: held a whole press conference. Trump was very happy it
Speaker 1: had no issue because of that, showing that made in
Speaker 1: America manufacturing promise to give Apple breaks on those tariffs.
Speaker 1: So things were fine over the course of twenty nineteen
Speaker 1: because of the diplomacy between Apple CEO Tim Cook and
Speaker 1: President Trump at the time. Then end of twenty nineteen hit,
Speaker 1: early twenty twenty hit, and we all know what happened there,
Speaker 1: the COVID pandemic that led to major shutdowns and delays
Speaker 1: and Apple supply chain in China, and really the COVID issues,
Speaker 1: the COVID zero policy in China really came to ahead
Speaker 1: with Apple at the end of twenty twenty two with
Speaker 1: the launch of the iPhone fourteen Pro, and that was
Speaker 1: supposed to be Apple's big splashy kind of reinvented iPhone exactly.
Speaker 1: The iPhone fourteen Pro was supposed to be this major
Speaker 1: launch for Apple. You've had it improved displays, you had
Speaker 1: the dynamic Island. You had this forty eight megapixel camera
Speaker 1: on the back, you had new space black and deep
Speaker 1: purple colors. This was a really hot phone with a
Speaker 1: ton of demand, but unfortunately for Apple, they could not
Speaker 1: fulfill that demand because new COVID waves hit China right
Speaker 1: at the height of the production and launch of the
Speaker 1: iPhone fourteen Pro, and Apple's operations team had made the unfortunate,
Speaker 1: I guess in hindsight, decision to do mass manufacturing of
Speaker 1: the iPhone fourteen Pro at a single place in China,
Speaker 1: at fox Con one set of facilities. Those facilities went
Speaker 1: down for about a month because of the COVID zero policies,
Speaker 1: which seriously delayed iPhone fourteen production, hurt Apple sales for
Speaker 1: the holiday quarter, hurt their growth for the key Q
Speaker 1: one holiday quarter, and that all comes down to the
Speaker 1: decision to source at one plant in China. So everything
Speaker 1: was good for the first twenty years, right, but the
Speaker 1: first three to five years have been pretty rough for
Speaker 1: the Apple supply chain. Did it make Apple executives start
Speaker 1: to rethink their dependency on manufacturing so many of its products,
Speaker 1: especially the flagship iPhone in China alone. I believe the
Speaker 1: rethink of where Apple should conduct mass manufacturing. It didn't
Speaker 1: start with these COVID zero policies. This actually predated COVID.
Speaker 1: I think this is something that they had considered probably
Speaker 1: since the beginning of the supply chain, right or a
Speaker 1: little after the beginning, at least for a decade, but
Speaker 1: something that really came to the forefront at the time
Speaker 1: of the Trump tariffs. That's when they became really to
Speaker 1: understand that they may need to diversify a bit more.
Speaker 1: But obviously these COVID zero policies you brought that even
Speaker 1: closer to the forefront. And what did that look like
Speaker 1: inside Apple, after all of these years of building the
Speaker 1: supply chain almost entirely lay around China, to begin to think,
Speaker 1: how do we move this beast as you describe it elsewhere? Right, Certainly,
Speaker 1: I believe the company thinks that it's supply chain is
Speaker 1: resilient and very strong. The supply chain is a strong beast.
Speaker 1: Despite everything that happened, the iPhone twelve at the height
Speaker 1: of COVID was only delayed a few months. The MacBook
Speaker 1: Air last year was only delayed about a month and
Speaker 1: a half. The iPhone fourteen pro situation that supply situation
Speaker 1: was resolved in a matter of weeks. So it has
Speaker 1: been resilient, as Tim Cook likes to say. And it
Speaker 1: doesn't appear that we're going to have more COVID zero
Speaker 1: issues in China from here. It doesn't appear we're going
Speaker 1: to have more terriff related issues anytime soon. But this
Speaker 1: pattern certainly is a bit concerning, and it's unclear what
Speaker 1: can happen. Anything can happen at this point between the
Speaker 1: US and China from a diplomacy standpoint, from a COVID standpoint.
Speaker 1: Right now, things are calm, but who knows what could
Speaker 1: happen in a day from now, a year now, or
Speaker 1: a decade from now. More with Mark German after the
Speaker 1: break Mark. Apple depends on China not just as a
Speaker 1: manufacturing base, but also to access their enormous consumer market
Speaker 1: for their products. If Apple were to significantly move its
Speaker 1: production away from China, would that hurt its ability to
Speaker 1: reach Chinese consumers? Absolutely? If Apple did a wholesale move
Speaker 1: out of China, it's very possible that they would be
Speaker 1: harmed tremendously. They bring in seventy five billion a year
Speaker 1: plus at this point, nearly twenty five percent of their
Speaker 1: annual revenue from China, and part of that ability to
Speaker 1: sell to China uniquely as a US corporation is what
Speaker 1: it injects into the economy with a million plus people
Speaker 1: in the supply chain working on Apple products, with its
Speaker 1: offices and employees in China, so it really is a
Speaker 1: partnership between Apple and China. And if Apple moves out,
Speaker 1: China may not hold up its end of the deal.
Speaker 1: Apple's largest competitor in China is Huawei. Why has Huawei
Speaker 1: not been able to establish a bigger foothold and even
Speaker 1: overtake Apple inside China itself? The consumers in China are
Speaker 1: addicted to Apple products, the iPhone, the Apple Watch, the iPad,
Speaker 1: even the Mac now extraordinarily hot sellers in China. You know,
Speaker 1: the iPhone started off just in the US, then it
Speaker 1: expanded to Europe, it expanded to Australia, but China came
Speaker 1: a little bit later. The really key thing for Apple
Speaker 1: in terms of the revenue you see today was twofold
Speaker 1: and these were both Tim Cook initiatives. Tim Cook struck
Speaker 1: a deal in the early twenty tens with a carrier
Speaker 1: called China Mobile that gave Apple access to about a
Speaker 1: billion new consumers because that at the time the largest
Speaker 1: carrier in China. Still to this day and most people
Speaker 1: don't know this, the vast majority of iPhones are not
Speaker 1: bought through Apple, either Apple Online, Apple over the phone,
Speaker 1: or Apple retail. They're actually bought through the carrier stores
Speaker 1: and the carrier websites, so that relationship incredibly important, not
Speaker 1: only in China but globally. And then in twenty fourteen,
Speaker 1: that was the real big one. That was the iPhone six.
Speaker 1: If you remember, the iPhone screen size really didn't change
Speaker 1: much between the first several generations, the original to the
Speaker 1: iPhone five S. With the iPhone five they moved from
Speaker 1: that original three and a half inch screen to a
Speaker 1: four inch screen, which is very small compared to what
Speaker 1: we have today. But the iPhone six Apple really up
Speaker 1: the ante. They came out with two new models. The
Speaker 1: base iPhone six, they moved from a four inch phone
Speaker 1: to a four point seven inch phone, which was quite
Speaker 1: a leap. But on top of that, they released the
Speaker 1: iPhone six Plus that was with a five point five
Speaker 1: inch screen. People in China wanted the biggest they can get,
Speaker 1: the Android phones the China made phones at the time.
Speaker 1: Those had giant screens. People in China really wanted to
Speaker 1: use one device, right. They don't want to carry a smartphone,
Speaker 1: a tablet, in a computer. They wanted one device that
Speaker 1: could do it all. And to do it all, you
Speaker 1: need the biggest screen you can get. So the iPhone
Speaker 1: six plus extraordinarily hot seller in China. So the bigger
Speaker 1: and bigger they've gone on the screen sizes, the better
Speaker 1: and better they've done, not only in China but elsewhere.
Speaker 1: So they've really been doing things to reach the Chinese market.
Speaker 1: They've also done new software features, things that the people
Speaker 1: in China are wanting to install on their phones. But
Speaker 1: there's also some things that Apple has done that have
Speaker 1: really been done to appease China, things that are not
Speaker 1: necessarily so pleasant in order to keep this relationship flowing.
Speaker 1: I'll give you an example. Some of the iTunes features,
Speaker 1: the Apple Books features, some of the app Store features
Speaker 1: those are not available in China. Other features have been
Speaker 1: implemented at the behest of the Chinese government. Last year,
Speaker 1: Apple changed its air drop feature to help the Chinese
Speaker 1: government avoid people spreading protest information against the Chinese government.
Speaker 1: Using this air drop feature, which allows you to send
Speaker 1: files at short distance between devices. Apple eventually said that
Speaker 1: feature was a global feature, and they made it global,
Speaker 1: but it's no secret that they released it in China first,
Speaker 1: and it was designed for China before they expanded it.
Speaker 1: So now we're seeing India rise as a consumer market.
Speaker 1: India's population now rivals or in some measures, actually exceeds
Speaker 1: Chinese population. Now, is there a chance that Apple starts
Speaker 1: doing what you're describing they're doing now in China in India,
Speaker 1: trying to attract that enormous consumer base by moving production
Speaker 1: there to create the same kind of symbiotic relationship between
Speaker 1: its products and the government what you saw Apple do
Speaker 1: in China over the last ten fifteen years. You're seeing
Speaker 1: that same playbook begin in India, and with a population
Speaker 1: of well over a billion at this point and a
Speaker 1: growing economy there, you're seeing Apple do this all over
Speaker 1: again in India. And you saw what that did for
Speaker 1: Apple's revenue growth when they made these moves in China.
Speaker 1: Their hope is it's going to happen all over again
Speaker 1: in India, so they're focusing tremendously there. They're building up
Speaker 1: production facilities for the iPhone and other products there. They've
Speaker 1: done small scale manufacturing of the iPhone there, but it's
Speaker 1: getting hotter and hotter. They're starting to produce their highest
Speaker 1: end iPhones earlier in India. They're going to produce more
Speaker 1: iPhones in India over time. They're working on a few
Speaker 1: new retail stores. They're planning to open their first one
Speaker 1: in the end of twenty twenty three, with more to follow.
Speaker 1: I would say probably they're going to open at least
Speaker 1: two more over the next year or two. Over the
Speaker 1: next decade, you might see fifteen twenty stores or more.
Speaker 1: They've recently created their own sales region internally just for India.
Speaker 1: India used to be grouped with other emerging markets in
Speaker 1: terms of its organizational structure at Apple grouped with Africa,
Speaker 1: grouped with Eastern Europe, grouped at the Mediterranean, grouped at
Speaker 1: the Middle East. Those have broken off into their own
Speaker 1: region as one group, and now India is a stand
Speaker 1: alone region. Reporting to Mike Fenger, who under CEO Tim
Speaker 1: Cook is Apple's head of sales, India is clearly prominent
Speaker 1: and clearly Apple's imminent future, both on a sales standpoint
Speaker 1: and on a product manufacturing standpoint. So we've seen coverage
Speaker 1: lately about how Apple maybe leaving China for India or
Speaker 1: other countries. But it seems like what you're describing is
Speaker 1: that they're not going to leave China. They're simply going
Speaker 1: to grow even bigger to include India without having to
Speaker 1: significantly scale back in China. Is that right? I don't
Speaker 1: believe that Apple has any imminent plans to significantly scale
Speaker 1: back in China. Maybe they scale back twenty percent, twenty
Speaker 1: five percent, maybe even fifty percent, and they build up
Speaker 1: more infrastructure in India, But I believe the idea is
Speaker 1: to build in redundancy and expansion rather than make a
Speaker 1: wholesale removal of its operations from China. There is too
Speaker 1: much at risk for Apple to do something like that.
Speaker 1: When you look ahead, what do you see for Apple's manufacturing.
Speaker 1: Do you start to see it manufacturing in many, many
Speaker 1: more countries or how do they manage the supply chain
Speaker 1: when it becomes even more complicated across nations and regions.
Speaker 1: So right now, most every Apple product you buy, it's
Speaker 1: going to say made in China, whether that's in the
Speaker 1: software settings or on the back of the phone, or
Speaker 1: the top or bottom of the phone, it's going to
Speaker 1: be made in China. But I think in five ten
Speaker 1: years from now, it'll be a crapshoot. Maybe someone's phone
Speaker 1: says made in China. Maybe someone says made in India.
Speaker 1: Maybe one in Vietnam, one in Thailand, one in Malaysia.
Speaker 1: Maybe someone's max has made in Ireland or made in Texas.
Speaker 1: The final assembly is going to be much broader, with
Speaker 1: more redundancy, but still the majority of the products made
Speaker 1: in China, particularly the iPhone. I believe Mark German, thanks
Speaker 1: for coming on the show. Thanks so much. When we
Speaker 1: come back, a closer look at Apple's expansion into India.
Speaker 1: As Mark German told us, Apple is looking to further
Speaker 1: expand its massive manufacturing empire, but that might not be
Speaker 1: so easy to do. A Bloomberg Intelligence analysis concludes it
Speaker 1: would take eight years to move just ten percent of
Speaker 1: Apple's production out of China. I asked my colleague Debbie
Speaker 1: Wu in Taipei, she covers tech and supply chains, why
Speaker 1: it would take so long for Apple to begin to
Speaker 1: deco full a bit from China. I'm not sure whether
Speaker 1: Apple is planning to the couple from China per site,
Speaker 1: because China after or remans a major market for Apple.
Speaker 1: And also Apple is still making most of its S
Speaker 1: gadgets inside China, so there will be a pretty significant consequence.
Speaker 1: If Apple is really looking to the couple from China entirely,
Speaker 1: that's really not going to happen, at least not overnight.
Speaker 1: I always like to remind people that Fox Come first
Speaker 1: went into China in nineteen eighty eight, so let's some
Speaker 1: more than thirty years ago. In Central China employees about
Speaker 1: two hundred thousand people, even not India low season. Think
Speaker 1: about which other country cannot provide Apple and Fox Cong
Speaker 1: such a sheer amount of workers during a peak season.
Speaker 1: I don't think you can name a lot of countries.
Speaker 1: India has become a natural choice for Apple to a
Speaker 1: versify some of its production too. Apple certainly seems to
Speaker 1: think so, Debbie. Earlier this month, you reported that Foxcan,
Speaker 1: one of Apple's manufacturing partners, plans to invest about seven
Speaker 1: hundred million dollars on a new plant in India. Can
Speaker 1: India move quickly enough to ramp up high quality production
Speaker 1: that Apple requires. This is not just like depending on
Speaker 1: india stub population. We are talking about a comprehensive ecosystem
Speaker 1: as well, So it's not just like Okay, foxcon has
Speaker 1: moved to India and then India will be able to
Speaker 1: ramp up iPhone production. It does need a entire ecosystem,
Speaker 1: So in China's case, it's not just foxcun but it's
Speaker 1: a comprehensive ecosystem made up of hundreds and thousands of
Speaker 1: component suppliers. So because they are all inside the Chinese border,
Speaker 1: these component suppliers have the adequate infrastructure including a highways,
Speaker 1: and then logistics including trucks, and then the meticulous logistics
Speaker 1: plannings to help them get their components to a like
Speaker 1: need to BA. This is all very important for Apple
Speaker 1: because Apple has to execute a very very brutal cycle
Speaker 1: or for launching a new generations of iPhone on a
Speaker 1: early basis. They simply cannot afford to miss cycle. Three
Speaker 1: of Apple's major iPhones suppliers are now in India rounding
Speaker 1: assembly operations, but most of the component suppliers still haven't
Speaker 1: quite set up manufacturing operations in India, so that will
Speaker 1: lead to a more kindly and more costly operations for
Speaker 1: Apple in the country. If India wants to become a
Speaker 1: proper ecosystem in itself, then it will have to first
Speaker 1: lure more Apple components suppliers to a country to be
Speaker 1: able to build up a proper infrastructure within the country
Speaker 1: to help the ecosystem to be able to run and
Speaker 1: coordinate with each other smoothly like they do in China.
Speaker 1: Is some of this about just capturing India's growing consumer market,
Speaker 1: which is now rivaling China's, That's for sure, because China's
Speaker 1: economic growth has been slowing down, and then the target
Speaker 1: of five percent of growth seems to be only fairly
Speaker 1: satisfactory for a lot of investors and economists. So naturally
Speaker 1: it's not just Apple, but Apple and also a lot
Speaker 1: of companies in the West and also in Asia. We'll
Speaker 1: be looking at, you know, what's the next growth market
Speaker 1: for us, and then where can we try to capture
Speaker 1: the most profits and growth next? And India, with its
Speaker 1: economy yet to really take off and with the population
Speaker 1: still have a quite a long way to go in
Speaker 1: terms of spending power. I think the majority of our
Speaker 1: complaints is looking at this as a great opportunity to
Speaker 1: go into the market. Because the Moldies government is currently
Speaker 1: offering various incentives for manufacturers to make gadgets and chips
Speaker 1: in his country. So I think mold is also fully
Speaker 1: aware that this is a great opportunity to attract these
Speaker 1: foreign investments at the time that the US and China
Speaker 1: are continuing to see a very strength relationship. When you
Speaker 1: look ahead, I don't know, a decade from now, do
Speaker 1: you think a lot of Apple's manufacturing will be outside
Speaker 1: of China in places like India and Vietnam. It really
Speaker 1: depends a lot on what's going to happen in the
Speaker 1: US China relationship, basically the ties between the two largest
Speaker 1: economies in the world. So I think a lot of
Speaker 1: complaints are feeling. If the somehow the strength relationship gets improved,
Speaker 1: and maybe it's back to era of engagement, then I
Speaker 1: think a lot of complaints still probably would prefer to
Speaker 1: move for production back to China, because that way it's centralized,
Speaker 1: it's more centralized, it's more efficient, and then the costs
Speaker 1: are lower, and then that means that you can offer
Speaker 1: a better price for your consumers as well. So in
Speaker 1: a way, if you continue to think about costs and
Speaker 1: profits and what Wall Street investors would prefer, let's actually
Speaker 1: what the most company would still like to say. But
Speaker 1: if this tension between Washington and Beijing persists or even escalates,
Speaker 1: I think it would drive more complaints to rethink their
Speaker 1: manufacturing astrology, and then whether it is necessary to move
Speaker 1: more production outside of China to mitigate geopolitical risks. Thanks
Speaker 1: for speaking with me today, Thank you for having me,
Speaker 1: Thanks for listening to us here at The Big Take.
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Speaker 1: Garcia is our engineer. Our original music was composed by
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Speaker 1: Big Take.