Who drowned the economy of CHINA? | Why are iPhones made in China?

 

Who drowned the economy of CHINA?

Covid-19 has affected the economies of the world, and China is also not untouched by the list of the economy facing losses. Covid has badly shaken China's economy. Because of this, a reduction in the target of China's economic growth rate is being seen. In the year 2022, due to the increasing cases of Corona, China's economic growth rate was reduced to only 3%.

 

Now even in the year 2023, a slight improvement in China's growth rate can be seen. China expects its economy to grow at a rate of 5% this year. National People's Congress i.e. NPC said in its annual report that this year China's GDP will grow at the rate of only 5%. Let me tell you, this is less than the earlier estimate.

 

Earlier, China's policy resource recently told the news agency Reuters that economic growth can be set to the extent of the target, but now it has been kept only nearby. In the report, Li Keqiang, the current Premier of China, said that at this time China is emphasizing economic stability. 

A target has been set to create around 12 billion urban jobs this year, higher than last year's target of at least 11 million. Let me tell you, the outbreak of Coronavirus, which started in the world's second-largest economy China, has become a cause of trouble for it only. China's GDP grew by just 3% last year. 

In the last decade, this was China's worst performance in the last four decades on the front of economic growth. The biggest reason for this is covid restriction. Due to the covid policy imposed by the government, there was a break in the economic activities of the country and its effect was seen on the economy. 

Along with this, due to the recession in the real estate sector, China's economic growth has also been affected. According to the report, China's premier has set a government budget deficit target of 3% of GDP. It was in 2008 last year. In such a situation, only a 0.2% increase is recorded in it.

 

It is believed that in this year's parliamentary session, the government may announce decisions to implement major changes as China is still facing difficulties on the economic front. The Chinese government is trying to get its economy affected by Covid back on track. 

For the year 2022, a growth rate target of about 5.5% was set, which was much less than China's GDP of 8.1% in the year 2021 and now in the year 2023, economic growth is a big business. It has to be seen that many officials who recently insisted on reforms related to Li Keqiang and economic policy are going to retire. In such a situation, how can President Xi Jinping bring the economy back on track? 

Why are iPhones made in China? 

Apple Inc. Partner Foxconn Technology Group has announced to invest about 700 million dollars i.e. about 5.7 thousand crores on a new plant in India to increase local production. Bloomberg has informed about this in one of his reports. The rising tension has led to this thing. Manufacturing of the iPhone is being shifted from China to India.

 

After geopolitical tension and corona epidemic, many American tech giants including Apple are working to expand their manufacturing facilities outside China. People associated with the case have told that Taiwan's company has planned to build a plant on a 300-acre site near the airport in Bangalore.

 

Apart from making factory parts, it will also be able to assemble Apple's handsets. Foxconn can also use this site to produce some parts for the electric vehicle business. According to the news, 100000 jobs are expected to be created due to the construction of the plant in India.

 

At present, about two lakh workers work in Zhengzhou city in China, although this number increases even more during the peak production season. This investment of Foxconn in India is its biggest investment so far. Let us tell you that Apple started manufacturing in India in 2017 with the iPhone SE. Apple's three electronics manufacturing service partners are Foxconn, Wistron, and Pegatron.

 

After iPhone SE, manufacturing of iPhone 11, 12, and 13 have also been done here. Apple's three contract manufacturers are part of the Government of India's 41000 crore Production Linked Incentive Scheme ie PLI. Only after that, there has been a boom in Apple manufacturing in India. 

The Government of India launched the PLI scheme in 2020. Do companies from countries outside the scheme get a chance to take advantage of local manufacturing and get incentives for it? However, at present, most of the assembling of iPhones is done in China only, what is the reason behind this, is the labor cost less there? 

The cost of iPhone employees is $10 per hour, according to Investopedia's report. According to Apple CEO Tim Cook, the main reason is not the low labor costs of iPhone manufacturing in China. According to Tim Cook, the skills required in tooling engineering in the iPhone are now specific skill sets not available in the USA, but available in China. 

Let me tell you that iPhone is available at the lowest cost in America. Even after manufacturing in China, the iPhone is very expensive. This is due to currency fluctuations and the value-added tax imposed in China. After America, Hong Kong and Japan are the countries where iPhone is cheaper. 

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