[HN Gopher] Apple to move key iPad engineering resources to Vietnam
___________________________________________________________________
Apple to move key iPad engineering resources to Vietnam
Author : firstSpeaker
Score : 109 points
Date : 2023-12-09 14:05 UTC (8 hours ago)
(HTM) web link (asia.nikkei.com)
(TXT) w3m dump (asia.nikkei.com)
| MuffinFlavored wrote:
| Slightly related genuine question: Why do Apple/Meta/Microsoft
| pay $300k-$1m/yr for American engineers (salary + stock
| compensation) from an international perspective? Capitalism
| states (sort of) that there's competition and an inherit race to
| the bottom. Companies have a motive to spend as little and get as
| much for their buck as possible. Globally, how is paying somebody
| $300k/yr in America (expensive) the best option in terms of
| getting development done? Is the answer really "quality"? Aren't
| engineer salaries much lower in Europe? What about Asia? South
| America (Brazil)?
| yuppie_scum wrote:
| Quality just isn't there with offshoring due to the time zone
| difference and distance. Accountability isn't there. The
| development savings will be offset by onshore QA, PM, Project
| management and rework by onshore devs. Been seeing that play
| out again and again for 20 years.
|
| I have seen slightly better results with offshoring from Latin
| America - fast feedback makes a huge difference - being able to
| meet frequently and provide feedback in the same time zone
| makes a huge huge difference.
|
| I think that AI will rapidly slot into this niche of "indirect
| programming" however. As soon as token sizes allow large
| codebases to be be parsed and modified, it's all over.
| lokar wrote:
| Also, these companies tend to be lead by engineers. They
| identify with the engineers and believe that this work (and
| thus themselves) is special. Not the case with say auto
| manufacturers.
| MuffinFlavored wrote:
| Who is to say the future will "remain this way" for
| engineers? When will it become more of a commodity?
| lokar wrote:
| More and more these companies are lead by groups of
| people who have never worked as an engineer.
| flutas wrote:
| > Quality just isn't there with offshoring due to the time
| zone difference and distance. Accountability isn't there. The
| development savings will be offset by onshore QA, PM, Project
| management and rework by onshore devs. Been seeing that play
| out again and again for 20 years.
|
| Yupp, it pretty much turns a quick conversation at standup or
| a quick huddle about a change into a 16+ hour turn around
| time at minimum.
| rafaelmn wrote:
| > I think that AI will rapidly slot into this niche of
| "indirect programming" however. As soon as token sizes allow
| large codebases to be be parsed and modified, it's all over.
|
| Context size is the least of an issue - current models suck
| in capability.
|
| I've been building stuff on top of openai API for months and
| getting it to do trivial stuff with instructions reliabily is
| incredibly hard. These are things like "if a user asks a
| question about an individual but only specifies first name
| ask for last name before invoking a search function" - even
| with examples of what to do you'll get GPT 4 ignoring
| instructions and calling search with just a first name.
|
| Like I understand that the potential they are showcasing is a
| breakthrough, and people are right to be excited about that -
| but we are extrapolating way to much based on breakthrough
| improvement pace.
|
| We've seen similar claims about self driving cars being a
| year away since 2016.
|
| Unless there's some breakthrough, I don't see AI affecting
| developer demand in the next two years at least.
| stardom5761 wrote:
| Isn't the current AI level already good enough to offload a
| big chunck of the work? I feel like the technology is already
| there and it's just a matter of adoption
| cqqxo4zV46cp wrote:
| Because capitalism the theory and capitalism the reality are
| vastly, vastly different.
|
| I just thought I'd jump in before someone talks about how
| [insert Ivy League school here] is the best thing since sliced
| bread.
| gedy wrote:
| Salaries are not big of a cost compared to revenue, so the
| "savings" only are valuable to struggling companies.
| MuffinFlavored wrote:
| To me this translates to "it's worth it to pay somebody
| $300k/yr - $1m/yr because companies can earn X% ROI on their
| cost of employees" but and I just struggle to believe
| where... from what I understand, there are like people who
| assemble iPhones for very very low cost in Asia, etc.
|
| Now I'm not saying iPhone assembly and architecting cloud
| computing are the same skillset. I just find it "unlikely"
| that America really has that large of a quality gap
| internationally? I work for a company that has a remote team
| of developers in Shanghai. I don't know for sure but I'm
| going to guess they do the same work/probably better work
| than the US team for less pay.
| vlovich123 wrote:
| They are probably closer when evaporated as a % based on
| the amount of value and profit in the supply chain that is
| being extracted. People making iPhones are working for
| companies that have their margins squeezed to razor thin
| margins so that Apple can make its 30% cut.
|
| The other thing is the amount of skill required. There are
| more people who can be hired to assemble iPhones than to
| design all the parts that go into the product.
|
| Finally, there's an arbitrage effect going on. A company
| can more easily go into a low CoL and pay the predominate
| local wage than a person from a low CoL can move to a high
| CoL and get paid a fair wage (aside from legal barriers
| there are also social ones involved with leaving your
| family)
| aprilthird2021 wrote:
| The money creates a bigger quality gap. At Meta's US
| offices, most devs are foreign origin. They moved for the
| money. So those devs wouldn't just accept paltry sums if
| Meta hired them overseas and they didn't need to come to
| the US to work. But Meta would have added friction the more
| and more of their teams are separate from product owners
| and business owners.
| gedy wrote:
| It's likely not based on logical accounting and counting
| every dollar - just like how companies blow money on fancy
| buildings or projects they know will likely be cancelled or
| never go anywhere.
| adw wrote:
| America's superpower is immigration. The core teams at the
| biggest and best players are recruited globally; the high
| end of software engineering is, economically, the NFL or
| the Premier League.
| t8sr wrote:
| There are many more feedback loops than meets the eye and not
| only corporations are rational economic actors. The in-demand
| talent tends to move to high CoL locations. Former low CoL
| locations become high CoL when successful. Especially when a
| high and low CoL location are adjacent, this tends to happen
| quickly (e.g. Germany and Switzerland, Malaysia and Singapore,
| US and Mexico.)
|
| The reverse is also true - people in high CoL locations tend to
| move out when their skillset no longer commands top
| compensation.
|
| In other words, I think the available workforce, to at least
| some degree, sorts itself into expensive and cheap locations
| based on what skills are in demand.
|
| To give a concrete hypothetical: you hire an ML research team
| in Poland. While ML is in demand, those people can easily get a
| job offer in London or Zurich and get paid 2-3 times as much.
| They don't even need a work permit, and it's a 90 minute
| flight. Why wouldn't they take it?
| berdario wrote:
| > To give a concrete hypothetical: you hire an ML research
| team in Poland. While ML is in demand, those people can
| easily get a job offer in London or Zurich and get paid 2-3
| times as much. They don't even need a work permit
|
| They actually need a work permit for London (it's not EU
| anymore).
|
| I believe that for Switzerland there might also be
| requirements for the employer to state that they couldn't
| find talent in the country, before extending an offer to
| foreign nationals (including EU: Switzerland is not EU,
| though it's part of Schengen... And thus EU citizens have
| freedom of movement)
|
| But your point stands... I think that fiefdom building, and
| needing teams close to where the execs (and/or investors)
| work and live is the other big reason why companies hire in
| high COL areas
| mahkeiro wrote:
| No there is no limitation in Switzerland for EU citizen,
| only specific domains (like waiter, hairdresser) where
| unemployment is above 5% must be first announced at local
| job agency, but you are still free to hire whoever you
| want. Btw free movements is not linked to Schengen but to
| bilateral agreements between CH and EU that entered in
| force before Schengen.
|
| https://www.eda.admin.ch/missions/mission-eu-
| brussels/en/hom...
| wallon_brux wrote:
| I get your point, but you actually need a work permit for
| both london and switzerland
| t8sr wrote:
| You're right about London, although I explored it not long
| ago, and having an EU/EFTA passport and a job in tech
| seemed to basically guarantee it.
|
| As for Switzerland, you don't need it. As the Swiss
| government itself says: "Thanks to freedom of movement,
| citizens of EU/EFTA member states can enter, live and work
| in Switzerland.".
|
| [1]: https://www.ch.ch/en/foreign-nationals-in-
| switzerland/workin...
| theGnuMe wrote:
| Well you have to live in London which may not be feasible
| regardless of the pay.
| t8sr wrote:
| Hah, indeed. Before Brexit, I used to take the Northern
| line in rush hour and it cured me of any desire to live in
| London, unless I can walk to work.
| irrational wrote:
| Time zones. The business people don't want to have meetings
| very early in the morning or very late at night. And they need
| more than one meeting a day and those meetings are taking place
| during nighttime in most of the rest of the world.
|
| The reasoning is different for Latin America - there the issue
| is more of a language barrier. While a great many people in
| Asia and Europe already know or seek to learn English, the same
| isn't as true in Latin America.
| monocasa wrote:
| Pretty much all devs in Latin America speak English. It's the
| lingua franca of software dev.
| clbrmbr wrote:
| The level of English varies, and salaries usually correlate
| with English proficiency just as well as with technical
| ability. I believe this is because devs with strong English
| can compete as remote workers on the global market, whereas
| those who are not professionally competent in English are
| relegated to work in firms that speak their language, or at
| least to have a bilingual management layer above them.
| aworks wrote:
| I regularly had 7am PST calls with Europe and Russia and 7pm
| PST calls with China and Taiwan. Calls with both at the same
| time were particularly difficult to schedule.
| irrational wrote:
| Like I said, way early and way late. 7am I am still getting
| my kids up and ready for school. 7pm we are cleaning up
| dinner and getting kids ready for bed.
| Teever wrote:
| Now do Canada.
| aprilthird2021 wrote:
| The best and brightest of Asia and Europe move to the US
| because of the salaries. Thus, the talent pool in the US
| becomes far stronger than the talent pool in other regions.
|
| But it's also true that FAANG all have global offices and teams
| fully in places with lower salaries. They are aware of the pay
| differences and take advantage of them. But they can't
| completely have all development done in a separate time zone or
| even same time zone separate region (like LATAM). That slows
| down dev cycles, invites gaps in product understanding, and
| allows you to miss out on top talent who will move to get paid
| top dollar.
| aworks wrote:
| I was a sofware director at a Fortune 500 company. I had
| engineers in Silicon Valley, Santa Cruz, Canada, the
| Netherlands, Russia, UK, Taiwan, and Wuhan (!) China. I also
| had individual engineers in Romania, Ireland, Portugal and
| Germany. Since it was already a global company, it was feasible
| to hire wherever we could find talent. Some of the Russia team
| moved to Armenia last year when the office in St. Petersburg
| was closed. We considered other countries like Vietnam since we
| had Vietnamese-American engineers but this is where we ended
| up.
|
| Cost was one of multiple variables determining which site we
| hired at. At the extremes, it was a 10x difference. The higher
| the salary, the more senior the team. The competition to hire
| and retain software engineers caused salaries to go up
| everywhere, but at a faster rate in the low-cost countries. And
| low-cost countries were our go-to source for new grads. The
| profiles of say Russia and China universities varied
| significantly e.g. experience with open source, mathematical
| rigor, English skills, credentials, initiative, teamwork, and
| relevant courses.
|
| The core product develpoment was done in the US but over time,
| other sites took on more product responsibility. In some of the
| countries, we also wanted to be closer to our customers, in
| expanding markets.
|
| It's hard to measure quality, productivity and contribution on
| an individual basis but it was reasonably correlated with
| salary. There were outliers though.
|
| So geographically-based staffing was complicated.
| orzig wrote:
| As a senior IC formerly in a similar situation, I'll affirm
| this is brilliantly written and even deeper than it looks.
|
| I'll add: Many of the Indian ICs I worked with were fine, but
| there was at least one manager who was an absolute disaster
| and the American executives had very little ability to fix
| the situation. Given that financial capital is here,
| executives will be here, and so some part of the org chart
| has to bridge across cultures, which is going to be a slight
| friction that compounds over the years of the project.
| moneywoes wrote:
| ultimately, are the days of a blue collar engineer in the
| west limited?
|
| you mentioned the new grad pipelines have already moved
|
| what advice would you give to a engineer in the west hcol,
| pivot to product?
| blagie wrote:
| Personally, I see the opposite trend: decreased differences
| in salary and cost-of-living. As developing countries
| develop, they'll look more and more like the US.
|
| Put another way: Since WWII, we've been moving from US
| engineers (used broadly) with US as the only country who
| can afford our products to global engineers with everyone
| buying products.
|
| There's no magic "US is a superpower fairy" which
| guarantees US salaries, cost-of-living, etc. will be 10x
| higher than everywhere else forever.
|
| I can't predict the future, so I don't know what that will
| do for jobs outlook, but it's not as simple as "they're
| coming for our jobs."
|
| My biggest worry is that the US is increasingly training
| incompetent engineers (again, used broadly). Much of the
| rest of the world has much better math and science in K-12.
| In winner-takes-all markets, 7-figure salaries can make
| sense sometimes to get the best over low 5-figure ones in
| the developing world, but if we're not the best....
| t8sr wrote:
| The US is a huge market with rules and culture completely
| different from the rest of the world. If you're building a
| product for the US market, you just can't beat a local
| team, who understand the customs, regulations and don't
| need user journeys explained to them in too much detail.
|
| Are we always going to need millions of javascript
| developers? Possibly not, productivity gains might outpace
| demand. But people can retrain on things that are in high
| demand.
| maxwell wrote:
| Because they earn enough per head to hire on-site in expensive
| locations. "Remote" seems to usually just mean not doing that,
| i.e. avoiding the costs of North American metro areas,
| seemingly usually out of financial necessity.
| foolfoolz wrote:
| there's not enough good engineers to sustain a business the
| size of apple in any one geo location. this will change in the
| next 25 years
| pdpi wrote:
| There's competition for high-end engineers everywhere, and you
| can't really afford to lock yourself out of the markets where
| those engineers congregate.
| jandrewrogers wrote:
| An important element of this is that there is strong and self-
| reinforcing geographical clustering effects around high-value
| skills. Engineers do not generically make $300k-$1M, it is
| engineers with specific domain expertise. I've had teams all
| over the world, the market is more efficient than I think some
| people expect. Focusing on wage arbitrage ignores that
| companies are optimizing for ROI, not cost per se.
|
| I think it is also important to recognize that the engineers
| top American tech companies hire are often not American, they
| just happen to be _in_ America. It is a geographical bias, not
| an American-as-nationality bias.
|
| Engineers with unusually high skill in any particular area are
| geographically diffuse. You can't hire a "team" in some distant
| inexpensive country, there might only be one or two such
| engineers in the entire country and they are difficult to find.
| The moment a company invests in creating a concentration of
| domain skill where none really exists, that clustering of
| expertise has a natural gravity not only for engineers with
| those skills _but for other companies that want to hire those
| skills_. Why search for a particular engineering expertise in
| Bolivia when you _know_ there are a hundred top engineers in
| some specific city? Even if the wages are higher, the risk is
| lower, hiring velocity higher, and the engineers more
| experienced, which has a large real ROI on its own. So people
| with those skills gravitate toward that concentration because
| that is where the money and jobs are. Wash, rinse, repeat.
|
| There are many large cities in the world with a reputation for
| having a proper tech presence, albeit on a lower tier, where it
| is nearly impossible to hire certain expertise and experience
| even for Silicon Valley money.
|
| You see the effects of this throughout tech, and not just
| software, where specific skill sets are oddly concentrated in
| one or two regions, including ones that are not particularly
| known for being tech or where the company that originally
| created the concentration became irrelevant decades ago. This
| expertise flywheel is how new globally leading tech hubs are
| created in practice e.g. Taiwan for silicon fabrication or
| Seattle for cloud.
|
| This is the tech hub bootstrapping problem. You have to heavily
| invest in a valuable technical domain that is currently being
| ignored by existing tech hubs. Taking advantage of these
| opportunities requires vision and an appetite for risk, since
| it is a contrarian position almost by definition. I think this
| explains much in the European context, where you have large
| concentrations of excellent engineers but minimal investment in
| genuinely bold visions.
| t8sr wrote:
| Well put. It's a shame that the domain a lot of European
| countries decided to bootstrap tech hubs around was crypto
| and not AI.
| poisonborz wrote:
| The same reason why middle and upper management is not
| outsourced. Communication and effective control over continents
| is hard. Core engineer salary costs are a drop in the bucket
| for global companies.
|
| And anything that is not core product, they do outsource.
| FredPret wrote:
| Some companies do love the race to the bottom, but these don't
| last long.
|
| Others seek instead to make remarkable things, and for these it
| makes sense to throw money at the best talent. What does it
| matter if an engineer costs 1m/yr if they make something worth
| 100m - 1000m? In fact, it's a bargain.
|
| This phenomenon doesn't exclusively exist in America, but the
| environment there is more conducive to entrepreneurs swinging
| for the fences than most other countries. They've also been
| playing at a high level for much longer than most, so investors
| there have lots of wealth to fund startups.
|
| So that's where you find the big salaries as well.
| badpun wrote:
| The engineering is their core competency and the source of
| competetive advantage. Given that it currently works well, and
| those companies are massively profitable - they see little
| point in doing risky cost-cutting.
| opportune wrote:
| This might be a controversial opinion here and I don't mean to
| offend anybody, but the distribution of engineers'
| effectiveness is not the same around the globe.
|
| Thought exercise: what kind of profile would you expect of
| someone going into software engineering in a country where the
| good jobs pay 5x median wage (and ~25x global median wage) vs a
| country where the good jobs pay 2x median wage (and ~6x global
| median)?
|
| Thought exercise: what kind of skills and experience would you
| expect of a 90%ile senior engineer in a country that gets
| lowest-bidder outsourced contract development work, vs a
| country that is directly employing engineers in "cutting-edge"
| development?
| ngcc_hk wrote:
| I wonder given Vietnam is also a communist country why there. How
| about Thailand or India ...
| zarzavat wrote:
| Many of the countries in the region are communist. What sets
| China apart is that it is a world power competing with the US.
| Nothing to do with communism.
| petesergeant wrote:
| None of the other communist countries in the region are
| anything like Vietnam, and the idea of moving high-tech
| manufacturing to Laos, Cambodia, or North Korea is ludicrous.
| Ridj48dhsnsh wrote:
| Have you ever visited Vietnam? The people I've met there are
| highly motivated to build successful businesses, even more so
| than in many western countries.
| vidarh wrote:
| Because whatever you want to label Vietnam, in terms of
| business what matters is that it's fairly deregulated and open
| for international companies, and has been for decades, offers
| significant tax breaks for hitech manufacturing, and has a
| cheap workforce and an established supply chain. India or
| Thailand might well also be competitive, but it's not a given
| they're any more attractive.
|
| If you mean to suggest there'd be the same risks as China,
| consider that Vietnam has consistently kept a certain distance
| to China, and have shared concerns with the US over Chinese
| expansionism. They're not particularly ideologically close, and
| politically there are few potential situations where
| deteriorating relationships between the US and China will
| negatively affect US-Vietnam relations, and some where it might
| improve them (e.g. if the issues in the South China sea
| escalates).
| latchkey wrote:
| The government is communist, but the people are not.
|
| If you've ever spent any time in Vietnam, you'd understand
| that.
| resolutebat wrote:
| TBH even the government is Communist in name only. Vietnam is
| furiously entrepreneurial and the government mostly gets out
| of the way, unless it feels threatened and then it comes down
| like a ton of bricks.
| latchkey wrote:
| https://www.politico.com/story/2017/02/clinton-ends-
| vietnam-...
| wtmt wrote:
| The news reports here in India say that there's a lot of red
| tape and delays in India. Ease of doing business is lower
| compared to Vietnam. The policies are protectionist and
| restrictive. The labor laws are, to some extent, protective of
| employees. This is something Apple has been reported as not
| being happy about (but things are changing).
|
| Apple already has a growing iPhone assembly base in India,
| which is set to go to 25% of its total iPhone production within
| a few years. While Apple is still looking for low cost
| production, I'm sure it doesn't want a repeat of China by
| concentrating a lot on one or two countries. I think the
| current moves are a temporary aberration, since concentrating
| iPhones in India, iPads and Macs in Vietnam and so on doesn't
| diversify the risk as much as ensuring that every product is
| assembled in more than one country. I'm sure Tim Cook is
| spending a lot of time working on such measures to de-risk
| manufacturing and maintaining the company's profit margins.
|
| All the countries that support low cost assembly and
| manufacturing in Asia have different kinds of problems as far
| as governments, policies and stability are concerned. Apple or
| any other company has to figure out the right mix and plans.
| vkdelta wrote:
| This looks more of manufacturing resources to work with Vietnam
| based contract manufacturers.
|
| It is not moving US based core engg (software, cpu design, etc)
| to Vietnam.
| jfghi wrote:
| Yet
| theGnuMe wrote:
| don't worry software and cpu design will be AI driven.
| Muromec wrote:
| Everybody knows that by 2000 we will finally reach
| Communism end game and nobody will have to work that much.
|
| Or at least that's what my grandpa believed.
| FirmwareBurner wrote:
| _> It is not moving US based core engg_
|
| Manufacturing is also becoming a core engg. Just ask the
| semiconductor industry. That was also offshored to Asia from
| the west by the metric boatload because it was not considered
| high value and prestigious enough, and now we depend on Asia
| for the most high value cutting edge chips which power our ...
| everything, as the western companies have fallen behind and are
| left with the manufacturing of low value chips. How ironic.
|
| Reminds me of that scene form 'Back to the future' where 1955
| Doc finds a faulty chip in the DeLorean's time travel circuit
| and says _" No wonder it failed, it says Made in Japan"_, then
| Marty explains to him that in 1985 all the best stuff is made
| in Japan. That scene aged like wine.
|
| It's all fun and games until you have another global supply
| chain disruption because some component you thought is
| irelevant but you now find out is only made in one country that
| now decides not to play ball or is vulnerable to an aggressor
| or a natural calamity, and you can't fix it because there's no
| equivalent manufacturing capacity or even know-how left in the
| west anymore, as it was all offshored 20+ years ago so everyone
| who knew that field well, is now retired or doing some other
| job. But hey, at least some execs got some fat bonuses and
| career changing promotions out of it.
| mschuster91 wrote:
| > Just ask the semiconductor industry. That was also
| offshored to Asia from the west by the metric boatload
| because it was not considered high value and prestigious
| enough
|
| It was and still is also _incredibly_ dirty. Silicon Valley
| is among the top Superfund site collections for that reason -
| tons of semiconductor companies were _very_ lax regarding
| pollution, and while the EPA cracked down on that pretty hard
| in the US, most Asian countries don 't give a shit about the
| environment as long as the short-term profits are high
| enough.
| FirmwareBurner wrote:
| _> It was and still is also incredibly dirty._
|
| Humanity's entire industrialization process to date has
| been incredibly dirty and damaging to this planet. It would
| be silly to think it has all slowed down. It just moved
| from your back yard.
| orhmeh09 wrote:
| Despite all EPA efforts, the semiconductor industry in the
| US still imposes itself on the environment in nasty ways.
|
| https://www.austinmonitor.com/stories/2022/02/environmental
| -...
|
| > Samsung's semiconductor facility spilled a large amount
| of acidic wastewater into its stormwater pond and into a
| tributary of Harris Branch Creek in Northeast Austin,
| killing virtually all aquatic life within the 1.5-mile
| stretch. As much as 763,000 gallons of the acidic waste was
| discharged into the waterways for a period of up to 106
| days.
| Sakos wrote:
| I don't understand why the only instance monitoring this
| stuff "regularly" is Samsung itself.
| sneak wrote:
| Right now, everyone at Apple and everyone in the USG knows that
| an all out trade war (or, heaven forbid, war war) between the US
| and China means that the head and body of the sometimes-largest
| US company get severed.
|
| It behooves Apple and everyone on Team USA to do everything
| possible to make Apple be able to survive a corporate beheading
| ifwhen they become unable to manufacture in China.
|
| They've started moving AirPods (India and Vietnam), some iPhones
| (India), and now iPads (Vietnam). Apple's scale is immense, and a
| full replacement strategy is maybe the largest project they have
| ever undertaken, and certainly the largest that doesn't get
| announced as some cool new product.
| Morte42 wrote:
| I doubt it has much to do with any impending war, after all
| Apple is moving to Vietnam with the assistance of a Chinese
| company that has been established in Vietnam for decades.
|
| China's relations with Vietnam go back millennia, they even
| provided Vietnam with weapons and training during the their
| wars against France and the US. If anything China is trying to
| establish itself in Vietnam before anybody else can.
|
| Vietnam, Bangladesh, Mexico and Brazil are all increasingly
| entwined with China when it comes to offshoring cheaper and
| simpler manufacturing. Expect the above nations to rapidly
| replace Made in China for many goods like batteries, toys,
| clothing and much more.
|
| In 2018 China's trade balance accounted for 0.66% of their GDP.
| In 2019 it was 0.93%. In 2022 it leapt to 3.21%. In the next
| couple of years it will likely return to around 2% meaning that
| the domestic Chinese economy is responsible for adding around
| 98% of the value to China's GDP every year, the sum of all of
| China's international trade balance adds 2%. Being the Worlds
| factory really isn't all its made out to be, China needs to
| reform itself to make profitable goods not cheap ones if it
| wants its international trade to be as lucrative as the rest of
| its economy. They had a plan for 2025 but covid happened so its
| hard to see how much they were able to offshore, I believe
| clothing manufacturing has been reduced dramatically in China
| and they are making fewer batteries but otherwise they are
| probably still in the cheap industry rut.
| theGnuMe wrote:
| It could be cost, China might be more expensive than Vietnam. I
| would think cost may play a role.
| treprinum wrote:
| Chinese workers are now more expensive than Eastern European
| ones, Indian swengs are more expensive than Eastern European
| devs as well.
| hughw wrote:
| "Country risk" is a term used in the oil industry. Is it common
| elsewhere?
| selectodude wrote:
| I imagine with the interesting geopolitical situation we all
| find ourselves in, if it wasn't before it sure as shit will be
| now.
| oblio wrote:
| I imagine it's common for all strategic resources.
| RCitronsBroker wrote:
| i feel like this is largely motivated by growing qualms over
| being highly dependent on China. They are not alone by far, but
| Apple truly is an extraordinary case of being enitrely at the
| mercy of china playing their role. COVID was the event that
| lowered the tide enough to, painfully so, expose whos swimming
| naked. Now, add growing concerns over IP protection plus
| political volatility, and you have a situation that makes
| shareholders and executives queasy when rethinking their current
| position. China also isnt as cheap as it used to be, has economic
| troubles and faces an impending population collapse. Thats one
| hell of an uncertain future, soon-to-be superpowers dont tend to
| suddenly stop providing key metrics regarding their population
| and economy. Lets see how they handle their own personal 2008,
| Evergrande aint lookin too good either.
| yieldcrv wrote:
| Vietnam is a single party state capitalist system nominally
| called the Communist Party that teaches the same Marxist
| ideology as China.
|
| Vietnam's head of state and head of party can serve just as
| many terms as Xi Jinping has so far.
|
| Vietnam's system as all the same trappings as China's when it
| comes to political dissent or anything that can "undermine the
| territorial sovereignty and unity", an idea that can be used to
| control all facets of life. There are major human rights
| violations and concerns occurring there as well.
|
| The general lack of trepidation about Vietnam, from the West,
| is solely due to Vietnam's irrelevancy, and Vietnam playing
| their own irrelevancy as friendliness for their own protection,
| it makes sense and they have no reason to do otherwise.
|
| My only point here is that the primary issues we have with
| _China_ is not their system, just their market power.
| FirmwareBurner wrote:
| Your last two paragraphs are bang on the money.
|
| Manufacturing is moving to Vietnam because it is politically,
| economically and militarily weak enough that it can easily be
| bullied into compliance/submission by the US in case it ever
| decides to go rogue and threaten US investments, or have the
| audacity to spin it's own domestic champions to compete with
| US players.
|
| China was also like that 30 years ago but has now become
| strong and influential enough that it can not longer be
| bullied into just being the submissive sweatshop of the world
| it once was.
|
| I recommend you watch the video that aged like fine wine:
| 'Meet King Joe - 1949 - Cold War Era American Propaganda
| Cartoon': https://www.youtube.com/watch?v=j-6YQQ779YM
| Muromec wrote:
| Why bully foreign governments you can buy?
| FirmwareBurner wrote:
| In case buying doesn't work. Then you wakeup with a coup
| in your back yard.
| astrange wrote:
| Kissinger's dead. You don't have to sit around patting
| yourself on the back about him anymore.
|
| You can tell none of this is going to happen because of
| the zero times it's happened.
| biztos wrote:
| If by "market power" you mean a desire to invade Taiwan,
| debt-trap diplomacy, the open pursuit of totalitarian norms
| replacing Western ones globally, and territorial
| acquisitiveness in opposition to international law (just to
| name a few things) then yeah, sure, that's what it is.
|
| But even then, if you want a partner who is close to China
| but not beholden to China, and for historical reasons will
| probably never be, then Vietnam is a great choice.
|
| Is there any evidence that Vietnam would be as belligerent as
| China, were it only a little richer?
| modernpink wrote:
| China is the greatest civilisational threat to the West we
| have seen since Persia or the Umayyad Caliphate. The fact
| that the West has allowed letting China grow as much as it
| has done will be seen as one of the most fatal mistakes in
| grand strategy in history. That strategy had a purpose for
| defeating the Soviet Union, but after it had collapsed
| China had served its purpose for us and should have been
| isolated by the international community again.
| modernpink wrote:
| Exactly, the West can bring to bear its might on Vietnam if
| they step out of line, especially since they themselves are
| not much fans of the Chinese and will be more than happy to
| work with the West.
|
| For Western consumers and companies we have learnt the lesson
| that if we want to keep the flow of cheap products, we need
| to diversify the pool of labour we draw upon and to keep them
| dependent instead of building them up to be competitors in
| the supply of products as well as competitors as consumers of
| those products.
|
| The crucial moment in the China strategy was in 2008 when we
| should have started on/friend shoring rather than leaving it
| until now. Instead with the West facing economic calamity at
| the time, we wanted the economically easy solution of letting
| China continue its integration into the global supply chain.
| astrange wrote:
| This is a typical case where cynical answers are wrong. The
| good thing about Chinese manufacturing isn't that it's
| cheap - it hasn't been cheap for a while now. It's that
| they're really good at it.
|
| Nothing's as expensive as a product that doesn't work.
| resolutebat wrote:
| > _Vietnam 's head of state and head of party can serve just
| as many terms as Xi Jinping has so far._
|
| They can, but to date, they don't: the Politburo holds the
| power and the head of state rotates regularly. Aside from Ho
| Chi Minh (who's long dead), there is no cult of personality
| in Vietnam, you won't find a single poster of the current
| leader anywhere.
|
| That said, China also tried very hard to prevent another Mao
| by building in all sorts of safeguards, only for Xi to come
| along and stomp all over them.
| biztos wrote:
| Given Apple's profit margin I doubt the costs per se are much
| of a factor. But I think there have been two administrations in
| a row that probably (hopefully?) reached out to "Tim Apple" and
| suggested he imagine a future in which stuff doesn't come from
| China.
|
| And if you're looking for industrious, ambitious people who
| will definitely not be in China's pocket, Vietnam is a great
| place to look.
| berserk1010 wrote:
| There are also a few recent developments that should frighten
| any foreign companies that are still operating in China
|
| - China's government's unprecedented and nationally coordinated
| audit on Foxconn's taxes and real estates in China. You could
| say that it is politically motivated, given the ceo of Foxconn
| was at one point running for president in Taiwan. However, he
| has since stepped out of the race, yet the audit is still
| ongoing. No doubt this has scared many Taiwanese firms to
| quickly move out of China, since this is just part of recent
| trend to try to squeeze money out of any capitalists (foreign
| or homegrown) since China is very very broke. (no, their now
| dwindling $800B dollar reserves is smaller than the dollar debt
| they owe abroad)
|
| - a ton of recent arrest and prevention of foreign executives
| from leaving China. For example Japanese
| https://www.reuters.com/world/asia-pacific/how-an-executives...
| and American https://www.nytimes.com/2023/03/24/business/china-
| business-c.... This has prompted many companies to pull their
| employees out of China. Recently Moody downgraded China's
| rating, and Moody issued warnings to its employees in China
| https://www.businessinsider.com/moodys-staff-in-china-wfh-du...
|
| - Russia's recent nationalization of foreign company assets.
| Being that China is allied with Russia in war against Europe
| and US, supplying Russia, and has the same dictatorship
| quality, it is very likely China will walk down the same path
| of nationalizing Apple's assets
| gscott wrote:
| I wonder what Tim Cook was thinking when the CCP sent in their
| "disinfection" crews and threw all of Foxconns employees
| personal items out.
|
| There are a lot of straws breaking the camels back but Tim Cook
| juiced profits centralizing in China but eventually, and it did
| take a while, having all of Apples fruit in one basket became
| untenable.
| Erratic6576 wrote:
| It's still cheaper than hiring American workers
| userbinator wrote:
| Ironically, many sites for the repair of phones, laptops, and
| other consumer electronics --- including Apple products --- are
| hosted in Vietnam.
| andrewstuart wrote:
| Companies all over the world have discovered that the cheap labor
| authoritarian nation where they did they manufacturing turned out
| in the end to be a real political problem and business risk, so
| they're moving their operations to countries that don't have such
| risks.
| gonzaloalvarez wrote:
| that don't have such risks... yet
| andrewstuart wrote:
| What are you suggesting?
| KRAKRISMOTT wrote:
| > _Companies all over the world have discovered that the cheap
| labor authoritarian nation where they did they manufacturing
| turned out in the end to be a real political problem and
| business risk, so they 're moving their operations to countries
| that don't have such risks._
|
| So they moved from one cheap labor authoritarian nation to the
| other cheap labor authoritarian nation next door.
| drdaeman wrote:
| > so they're moving their operations to countries that don't
| have such risks
|
| Did you mean: different cheap labor authoritarian nation?
| Manuel_D wrote:
| It's not the authoritarianism that's the issue with China. It's
| the geopolitical rivalry with the US and Taiwan.
| andrewstuart wrote:
| >> geopolitical rivalry with the US and Taiwan.
|
| The other geopolitical rivalries play a role too, including
| with Japan, Australia, the Philippines, Malaysia, Vietnam,
| South Korea, Philippines, Brunei, India,
| thorncorona wrote:
| Such as: Vietnam. A communist country.
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