The New York Times has published an in-depth article entitled ‘How China Built iPhone City With Billions in Perks for Apple’s Partners’, revealing a treasure chest of public benefits for the world’s biggest iPhone factory in Zhengzhou, China. In a city of six million inhabitants in an impoverished region of China, the local government has contributed $1.5 billion to Foxconn, Apple’s supplier of iPhones. The money is used, in part, to improve local infrastructure, reduce Foxconn's export costs, and build housing for the factory’s 350,000-strong workforce (five times the number of people employed directly by Apple in the United States).
In order to reap the economic benefits of hosting multinational companies such as Foxconn, the Zhengzhou authorities have offered the company a broad portfolio of benefits. These include a $600 million contribution towards the construction of Foxconn’s manufacturing complex, 5% discounts on energy costs, and a relaxation of corporate tax rates.
However, the revelations come at a time of uncertainty over the future of globalization. With the rise of economic nationalism in both China and the United States, emboldened by President Trump’s denouncement of Apple’s global business model, the willingness for countries to use public money to court private companies may soon disappear.
News via: The New York Times.