Recent years there’s a book published in China < An In-depth Overview of Apple’s Product Chain >
The author is "21st Century Economic Report" senior reporter, mainly engaged in IT industry reports, he spent a year to study the Apple industry chain in Japan, South Korea, Taiwan, Shenzhen, Hong Kong, Shanghai, Suzhou, Chongqing, Changsha and visited the local factories, interviewed a large number of Apple suppliers, distributors. The book is the most authentic Apple industry chain survey report so far.
An iphone which is designed in the United States, later on the core MCU and touch screen made in South Korea. The Taiwanese manufacturers supply additional parts, and finally assembled by Foxconn before the finished product shipped by AIR to the United States. As soon as the iphones are put on sales in the Apple Chain Stores, they are bought by the Chinese scalpers. Then the iphones smuggled back to China for sales. Shenzhen Mobile phone workshop recycled the second-hand iphones but in the end the destiny of a small iphone would be disassembled as an electronic waste.
It happens that there is a similar case where stands the review of this article. Another book written by a Chinese economist Zhangfan < Industrial Drift > which is recommended as a book of the geographical transfer of the world manufacturing industry and central market. What are the historical development stages of manufacturing? How the world manufacturing industry and central market transfer happened? Why China is today’s biggest manufacturing industry base in the world? Please follow us here to find out the clues.
The First Large Manufacturing Transfer
It was on the early 20th century, from England to the United States. The American assembly line and standardized production procedures were invented and developed at a very high speed in that period. Contribution of company Ford couldn’t be left as unrecognized.
The Second Major Manufacturing Transfer
The 1950s, from the United States to Japan. Japan was the world's top ten industrial powerhouse before World War II, and many of Japan's industrial facilities were destroyed in the Second World War. After the U.S. occupation of Japan, based on the revival of Japan's industrialization, the United States decided to transform Japan as a Western factory in Asia. In the process, Japan gradually got rid of the cheap and low-quality product image, while in the industrial design, manufacturing methodology and quality management areas emerged a lot of advanced ideas that has been a far-reaching impact to the current Chinese manufacturing growth.
With a highly efficient and comprehensive national industrial collaboration system, 1968 Japan became the second highest GDP in the world. They cooperated in the way which is more or less closed system by using the company's internal division. The Japanese did trading by the strictly unified control of trading firms. It was a certain period of time very difficult for the Japanese collaboration system to be intersection with the system of western entities.
The Third Major Manufacturing Transfer
The 1960s, from Japan to Four Asia Tigers (Korea, Taiwan, Hong Kong and Singapore), in other words called NIE, Newly Industrial Economics.
"Asian Tigers" means that from the 1960s onwards, Asia's Hong Kong, Taiwan, Singapore and South Korea carried out export-oriented strategy, focused on the development of labor-intensive processing industry, in a short period of time to achieve economic take-off, a leap into the rich region of Asia developed. The Asian Tigers, known in English also as the "Asia’s Four Little Dragons".
We start with elaboration of Korea. Under the leadership of the president Park Chung Hee, South Korea has developed its industries in the country, with Japan's support, from light industries such as textiles and footwear to steel, shipbuilding and other heavy industries, which have become the most developed industries in the world. Compare the mode of business organization, Korea and Japan are very similar, many companies control the sales and purchase activities through trading firms.
Taiwan has vigorously developed its industries with the support of the U.S. economy. In the middle of the 70s, Taiwan undertook a large number of labor-intensive industries from the United States and Japan, and gradually became a giant of the electronic industry generation.
Before 1950, Hong Kong was only a harbour for entrepot trade and the manufacturing sector accounted for only 5% of local GDP. With the outbreak of the Korean War, Britain followed the United States cut off the economic exchanges between Hong Kong and the mainland, Hong Kong turned to the development of manufacturing industry, first of all the textile industry. Led by the textile industry, plastics, watches, bulbs and other manufacturing industries have also been rapid development, by 1970, Hong Kong's manufacturing sector accounted for 30%. When mainland China market reopened, these industries was advanced into China to start up factories.
In the 1960's, Singapore, under the impetus of Lee Kuan Yew, adopted a series of industrial laws to set up Jurong Industrial Park, attracting investment, and taking the lead in developing textiles, toys and other industries. In the 70's Singapore focused on the development of capital and technology-intensive industries, and later on attracted a group of computer accessories manufacturing and petrochemical processing multinational companies settled in Singapore successfully through tax concessions policies. In the 90's, Singapore became an important production base for integrated circuits, chips and disks, as well as the world's third largest refining center. Singapore's development model has undoubtedly become a model of mainland China, and an excellent example is Singapore Industry Park in Suzhou, Jiangsu China.
The Fourth Major Manufacturing Transfer
The 1990s, From Asia Tigers to mainland China.
China's industrialization process is quite different. The general export-oriented economy of the country is the first development of textile and other light industry, and then develop heavy industry.
In the 60’s, China gave priority to heavy industry, followed by light industry. Taiwan-funded enterprises entered the mainland in the early 1980, Fujian and Guangdong coastal areas become Taiwan's traditional industry distribution centers. As for the data we have collected so far, since the 90's, Taiwan has firstly started to enter the inland areas such as Jiangsu province.
Hong Kong's capital started in mainland China was from the beginning of the 1980s. The PRD (Pearl River Delta major refers to Guangdong, Shenzhen area) is the preferred place for Hong Kong investors to transfer labour-intensive manufacturing. At the beginning is mainly toys, clothing, plastics and hardware, such as low-end manufacturing, and then gradually transferred to electrical and electronic parts and so on. As of 2003, 95% of apparel and leather manufacturing, 90% of plastic manufacturing, 85% of electronic manufacturing and 90% of watch and toy manufacturing have moved out of Hong Kong.The capital of Europe and the United States, in the data we’ve found, for some unexplained reasons, probably started to enter China from 1995 onwards. Some relatively high-end manufacturing industry has also begun to enter China.
The generation after 60s, 70s were having their career usually in state-owned enterprises. At that time Hongkong and Taiwan capital companies were considered as foreign-funded enterprises. People at that times thought it was risky in some way to work in a Hongkong or Taiwan company without the protection of a state-owned system. But where there is a risk there is a chance. One group of people has the opportunity to contact the forefront of production and management concepts. They began to open their eyes to see the world. Their career is also accompanied by China's economic development and running all the way to be big winners in the trend of life.
Just now, with ups and downs along the road of China's economy development, many people will face the bottleneck of career growth. The future of the Chinese manufacturing will be closely related to those who read this article. Actually we all have to ride the tide of the times and seek new changes. What the future will be, not yet known. However, we always believe that the cyclic nature of history and economic activity.
Knowing the past so the future can be better seen.