The sour apple(2)

China's dilemma 

Besides being its second largest market, China has also become Apple's biggest and the most important manufacturing base, but Chinese companies have little say in the Apple supply chain and their profit margin is less than 2 percent.

As Apple products are warmly embraced around the world, the Apple industry has blossomed in Shenzhen, Guangdong Province. At present, a complete industrial chain for Apple products has taken shape in the world's most vibrant manufacturing hub.

Manufacturers providing Apple-related products amount to more than 1,500 in Shenzhen, with annual turnover exceeding 100 billion yuan ($15.87 billion).

Although they have been working their heads off for Apple, suppliers have not gained matching return from it.

Apple's profit margin has now surpassed 30 percent, while the Taiwan-listed Hon Hai Precision Ind. Co. Ltd., Apple Inc's biggest manufacturing partner, has seen its profit margin drop to 2 percent from 5.9 percent in 2006. The margin dipped faster after Apple launched its all-time bestseller iPad and iPhone.

Meanwhile, Chinese workers at Apple's suppliers are overworked to meet Apple's requirements. "We are under heavy pressure and enormous workload, as the customer tolerates no mistakes. The leader of the assembly line often scolds us girls to tears," complained Xiao Wei, who started working for Hon Hai's Shenzhen-based Foxconn in September 2010.

Many of her co-workers still remember an incident in 2009 when 25-year-old Sun Danyong committed suicide after brutal interrogation when a N90 version of the iPhone went missing. The next year, another 10 Foxconn workers killed themselves due to various mental issues and heavy work pressure.

But when asked why she did not quit, she said she could not earn more working somewhere other than Foxconn, and most of the other jobs have no vacations. "Here in Foxconn, we can take one day off each week, plus annual leave and paid vacation."

Thanks to Apple, tens of thousands of jobs were created in China. Many fresh college graduates and migrant workers are able to peek into the production process of the state-of-the-art electronic devices.

Foxconn has more than 1 million employees on the Chinese mainland. More than 200,000 workers, which is equivalent to the population of a medium-sized city in the United States, stuff the 2.3-square-km-large Shenzhen Longhuayuan Industrial Park.