In Apple in China, Patrick McGee, a veteran Financial Times journalist, provides a sobering and meticulous account of how Apple’s pursuit of scale and profit helped fuel the meteoric rise of China’s techno-industrial power. Ultimately, Apple outsourced not just production, but national leverage.

McGee compares Apple’s total investment in China—through capital, supplier development, logistics, and ecosystem support—to over twice the inflation-adjusted cost of the Marshall Plan that helped rebuild Western Europe after World War II. According to internal documents, Apple was investing up to $55 billion annually in China by 2015. In 2016, Apple CEO Tim Cook pledged $275 billion over five years—more than all American and Canadian investment into Mexico from NAFTA between 1993 and 2020. By comparison, the United States’ supposedly “generational” federal investment in the semiconductor industry—the CHIPS and Science Act—will cost taxpayers $52 billion over four years.

But, while the Marshall Plan rebuilt democratic allies, Apple’s version helped turbocharge an authoritarian competitor. Apple helped build railways, power infrastructure, specialized tooling, and entire cities around assembly lines. All of this enabled a level and precision in Chinese manufacturing that no other Western firm could match. As McGee states: “What Apple was doing was akin to making 10 million Ferraris a year.” Apple’s plan was not simply about cheap labor, but China’s unmatched capacity to coordinate state-backed infrastructure, training, logistics, and scale.

Apple implemented a form of contract manufacturing that McGee dubs the “Apple squeeze.” Apple products demanded novel components, cutting-edge techniques, rapid scale, and stringent quality control. To achieve this, Apple embedded designers and engineers into its manufacturers, training and co-inventing with them. Apple “squeezed” suppliers for low-margin high-volume output. In turn, suppliers gained valuable know-how that it could use to win contracts from other clients. Taiwan features prominently in McGee’s tale. Foxconn, a Taiwanese firm led by Terry Gou, was the key intermediary that allowed Apple to scale in China. Gou emerged as a figure who combined industrial savvy with a disregard for the risks of building China up.

As Apple continued to expand, China—with a large labor force and government desperate for foreign investment—became an obvious destination. Apple’s move toward China was not some part of a grand strategy, but rather the result of Apple being “lured into the country” with “one opportunity after another.” Inevitably, China’s labor force became the envy of the world.

McGee describes how, with no other countries developing similar skills, Apple became overly dependent on China and facilitated the country’s move toward self-sufficiency. He points to the grim reality that for now China’s manufacturing dominance is irreplaceable. China’s competitive position isn’t just about cost—it’s about massive government support, scale, and talent. Apple trained hundreds of thousands of Chinese engineers in advanced precision tooling, quality control, and process integration. Now, the same industrial systems that Apple helped establish, are being used to displace worldwide production across other industries—led by firms like Huawei, Xiaomi, and BYD, often staffed by former Apple-trained engineers.

As Xi Jinping consolidated power, Chinese tech policy became “in China, for China,” turning Apple into a target. Beijing made clear the leverage it held over the company by enforcing previously unenforced rules, enacting spurious roadblocks, and threatening antitrust investigations to get Apple to comply with its dictates. Beijing also manufactured public sentiment against Apple through targeted attacks in influential CCP mouthpieces such as Global Times and Consumer Day, and government reports that ranked the tech giant last in “corporate social responsibility,” meaning its support of CCP policies.

Although Apple realized it was facilitating technology transfer at an “extraordinary scale,” the company concluded that the transfer itself was not its main problem. Rather, the real problem was that Apple was not advertising its investments to Beijing. Apple, as a sign of its capitulation to China, played ball with the regime. It removed the New York Times app, WhatsApp, AirDrop, and VPNs from the Chinese app store; made large, public investments in Chinese companies and data centers; and increasingly aligned with Beijing’s “Made in China 2025” initiative meant to make China an industrial powerhouse. In return, Apple avoided crackdowns and lockdowns. The company thrived through Beijing’s crackdown on domestic tech companies and independent media, and zero-COVID measures that disrupted global supply chains—because of Apple’s successful lobbying efforts to prove its value to the country.

Despite geopolitical friction and growing calls for “decoupling,” Apple remains deeply entangled with China. Over 90 percent of its products are still made there, and efforts to diversify—like expanding into India or Vietnam—are marginal in impact. Apple is not alone: The entire Western consumer electronics sector is caught in the same trap.

Attempts to move production to friendly shores, such as India, have largely failed. The reasons are structural: India lacks the logistics, skilled industrial workforce, and integrated supplier base that make Chinese manufacturing cheaper and fundamentally better. Indian attempts to replicate Foxconn-style mega-campuses have faced persistent obstacles: land acquisition delays, inconsistent state support, and insufficient mid-skill technical training.

One of McGee’s unstated themes is the absence of a coherent U.S. strategy in the face of a fierce techno-industrial competitor. Where China fused state support with market signals, the United States offloaded responsibility to private corporations. The result: a two-decade head start for Beijing in techno-industrial competition.

McGee’s findings echo the warnings of Rob Atkinson, president of the Information Technology and Innovation Foundation, and others who argue that the United States is losing the techno-industrial war. As McGee demonstrates, U.S. policy over the past two decades has incentivized leading American companies to outsource ever greater value-added production and entire supply chains to China. The U.S. industrial and innovation system optimizes for great inventive disruptions, high profits, and short-term shareholder value. China instead emphasizes comprehensive national power—manufacturing and industrial might that also leads to innovation of a different kind.

Apple’s model is the embodiment of mistaken U.S. doctrine: a hyper-efficient company that, in seeking global margin optimization, hollowed out its own country’s capabilities while transferring core competencies to a strategic competitor.

American economic dependency has become a strategic liability. Without new policies for techno-industrial competition, America risks dependencies on China for production in critical sectors. U.S. policymakers face a complicated and unprecedented challenge: How will the United States maintain its enviable free-market system, the best wealth creator on the planet, while facing down a state-capitalist behemoth?

Apple in China is essential reading to understand how America’s most iconic company helped transform a strategic competitor into a technological peer. But it’s more than a company history—it’s a case study in how corporate strategy, national policy failure, and geopolitical myopia combined to reshape global power. Clear-eyed, deeply reported, and politically urgent, Apple in China should be read as a call to action: for a new era of techno-industrial strategy that doesn’t outsource power in pursuit of profit.

Apple in China: The Capture of the World’s Greatest Company
by Patrick McGee
Scribner, 448 pp., $32

Dan Blumenthal is a senior fellow at the American Enterprise Institute. Ian Jones is a research assistant at the American Enterprise Institute.

The post How Apple Turned China Into a Tech Behemoth appeared first on .