Apple and China

Presidingoveraunipolarworldinhis second term, President Bill Clinton announced anew policy oftradeand commerce. Brushing aside Ross Perot’s caution, heembarkedonamassivescale transfer of capitaland manufacturing to China andinaugurated NAFTA toinclude Mexico. The philosophical foundation of suchamovewas provided by theoreticians like Francis Fukuyamawhowere optimistic that anewworldorderwouldemerge, transcending theideological conflicts that dominated fromthelate19thcenturytothe late20thcentury

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Deng Xiaoping’s “Opening Up” reforms in 1978 enabled China to develop export-oriented manufacturing hubs, establish Special Economic Zones (SEZs) in coastal areas for foreign investment, capitalize on its abundant low-cost labour, and strategically build world class infrastructure. Deng was convinced of the need to abandon the equalitarian impulse of socialism and embrace fresh experimentation to usher in prosperity.

The effect was immediate. Foreign investment poured. Huge manpower within China migrated from rural to urban areas allowing for smooth transfer of workers to fill up its factories, made possible by its unprecedented attempt to simultaneously realise agricultural and industrial revolutions. It was partially modelled after Hong Kong where such an experiment was tremendously successful as it combined three factors, low wages but efficient management, infrastructure and acceptance of the market which were denied by socialism.