Apple announced on Tuesday that China is their fastest growing market, with 2011 sales comprising 12% of their global sales, skyrocketing from only 2% in 2009. It was a good save for the company, whose earnings fell short of Wall Street’s expectations.
And while Apple CEO Tim Cook may be content to file the billions of yuan away in Apple’s coffers, the underbelly of Apple’s expansion is far from spotless. Apple’s rise to prominence in China reads less like a success story in brand-making and more like a tragedy that shows how Apple’s arrival in China both fueled and fed off of the country's unhealthy consumerism.
The consumer market was not the first thing Apple reached for in the East — outsourcing production came first. One of Apple’s biggest production factories, owned by the world’s largest contracted production firm Foxconn, is hiding away in Southern China. The factory has frequently been criticized for its draconian and inhumane practices, including subjecting workers to up to 98 hours of overtime in a month.
The fruits of such strictness came to public attention in 2009, when a 25-year-old employee committed suicide after being accused of stealing an iPhone 4 prototype. Although Apple has since made efforts to cut ties with companies that have abusive labor practices, the company hardily seems like the standard bearer in humane labor policy: according to internal investigations, Apple set the maximum amount of work hours per employee at 60 hours a week, (well above even China’s legal — albeit much ignored — 49-hour limit) and has yet to cut ties with factories found employing children as young as 15 years old.
Meanwhile, the environmental ramifications caused by Apple in China have attracted the attention of the Chinese press. Although domestically, state newspapers’ investigative powers are rather limited, they have accused Apple of working with factories that emit toxic gases and heavy metal sludge.
But even such investigative reports, foreign or domestic, do not sway Apple’s success. How does Apple get away with all of this? Simply by feeding off of the rabidly consumerist urges of the unsympathetic Chinese middle class.
The idea of an unsympathetic middle class may seem slightly foreign in comparison to the middle class that emerged in the 1800s to form the bedrock of reform movements in the United States. However, the difference here is that Middle America emerged much more gradually than China’s middle class and already were a degree removed from the poverty that their parents endured when they became leaders in the reform movement.
China’s current middle class is comprised of a group of highly motivated individuals who lived in working class conditions during their childhood, seeing hardship first-hand, while finding the way and luck to claw their way up to the top and are now desperately clinging on to their apartment buildings and plotting their next real estate investment. These new middle class people carry some very working class views about both labor intensity and safety needs, which is why it is difficult to strike a chord with middle class Chinese Apple buyer. In fact, some consider themselves “a better paid working class.” Many of middle class Chinese, despite their status, are still unsympathetic to workers’ plights because they remember their parents and themselves enduring similar jobs, or they do not see reform as a path to stability and happiness. For many Chinese, money really can buy happiness, and Apple’s premium pricing is only helping to further the divide between classes.
Apple also suffers from all the negatives of producing rabidly sought-after products: bootlegging. Over the past couple of months, a few “Apple Stoers” [sic] were opened in Kunming, China. This is obviously not a phenomenon isolated to Apple — Chinese consumer culture today dictates that customers are bombarded with these kinds of faux shops. Although the Kunming shops have since been closed, their success is a telling about how desperately high demand for the Apple brand name is. For middle class Chinese, the money they pay is not necessarily for quality control as it is for the right to bear the emblem of a company.
Of course, Apple is hardly the first (and will not be the last) to take advantage of middle class China. Their case is only a convenient case study part of a larger phenomenon of brand-name craze that has been sweeping the eastern giant. It is unfortunately a phenomenon that can only be mended over time, as the second generation of the Chinese middle class grows up with a degree of separation from the working class mindset instead of embroiled in it. Even then, with such an authoritarian government ruling the nation, it is difficult to say whether the middle class in China will ever feel the amount of political or reform influence that the middle class in other nations have felt.