To prevent its suppliers from going bankrupt if contracts were cut, Apple mandated that no supplier could be more than 50% dependent on its business. This forced highly-trained manufacturers to find other customers, directly enabling the rise of sophisticated Chinese smartphone brands like Huawei and Xiaomi.

China offers a hyper-concentrated manufacturing ecosystem where suppliers are neighbors, supported by world-class infrastructure. This dramatically speeds up prototyping and production, turning complex international logistics into a simple "walk down the street."

Apple's deep reliance on China is not just about cost but a 25-year investment in a manufacturing ecosystem that can produce complex products at immense scale and quality. Replicating this unique combination in India or elsewhere is considered fanciful.

While China bans many US tech giants, it welcomed Tesla. A compelling theory suggests this was a strategic move to observe and learn Tesla's methods for mass-producing EVs at scale, thereby accelerating the development of domestic champions like BYD, mirroring its past strategy with Apple's iPhone.

Apple wasn't a visionary in offshoring; it was a laggard. Its move to China was driven by the inability to manufacture the radically different iMac, a product designed to save the company. This desperation forced it to abandon its long-held control over manufacturing and partner with Asian suppliers.

While headlines focus on advanced chips, China’s real leverage comes from its strategic control over less glamorous but essential upstream inputs like rare earths and magnets. It has even banned the export of magnet-making technology, creating critical, hard-to-solve bottlenecks for Western manufacturing.

The common practice of offshoring manufacturing, exemplified by Apple, creates a critical flaw by severing the feedback loop between designers and producers. This leads to suboptimal product design and simultaneously transfers advanced manufacturing skills and capabilities to other nations, like China.

China is explicitly subsidizing domestic semiconductor firms through its National Integrated Circuit Industry Investment Fund. This state-backed capital is the key driver behind its policy to achieve technological independence and replace foreign companies like NVIDIA.

Terry Guo of Foxconn pursued a partnership with a struggling Apple, recognizing that learning from Apple's demanding standards was more valuable than short-term profits. He understood Apple's uniqueness better than Apple did, betting that mastering their complexity would make Foxconn capable of serving any client.