Taipei, Friday, July 25, 2014 18:33 (GMT+8)
Commentary: Apple being dragged into US-China trade war
Heng-An Su, Taipei; Joseph Tsai, DIGITIMES [Friday 21 October 2011]

Since January 2011, three events have occurred in China which have led some upstream component suppliers to believe there is a conspiracy by the China government to try to suppress Apple's supply chain. The moves are said to be counter attacks which are part of China's trade war with the US.

In January, five non-governmental organizations (NGOs) in China published reports accusing Apple's supply chain partners in China of creating massive pollution in the country. This was followed up at the end of August, when the NGOs published a pollution map of China, mapping the upstream supply firms and linking them to claims of huge environmental pollution issues in the surrounding regions. The writers of the reports cited Apple's own 2011 supply partner responsibility report to highlight the firm control Apple maintains over its supply chain, in ordered to emphasize that Apple must take ultimate responsibility for any excess pollution caused by its upstream partners.

On October 15, China Central Television (CCTV), a government-backed media outlet, broadcast a documentary titled "Another Side of Apple" (title translated from Chinese), which citied environmental organizations linking 27 of Apple's upstream suppliers including Foxconn Electronics (Hon Hai Precision Industry), Compeq and Unimicron with environmental pollution.

After the TV program was broadcast, other media outlets in China jumped on the topic leading to widespread coverage of the issues and allegations.

It is believed the controversy following the documentary's broadcast directly triggered the third event to hit Apple's supply chain, as on October 17, just days after the original air-date, Apple's upstream chassis supplier Catcher Technology was ordered by the Suzhou local government to halt production at its facilities in the district due to complaints by local residents that the plants were releasing noxious gasses into the surrounding area. The incident has generated massive speculation across the IT market in China, with some news organizations even speculating that other upstream suppliers, including Foxconn, TPK and Wintek, may also be forced to suspend operations in other parts of China.

The incident involving Catcher (which has been dubbed "The Poison Apple") has significantly affected the stock prices of Apple's other upstream suppliers including Largan Precision, Genius Electronic Optical and TPK, to the extent that Taiwan's Minister of Economic Affairs, Shih Yen-Shiang, has needed to publicly downplay Catcher's troubles as an isolated incident.

Speculation in the industry has linked the Catcher incident with the recent trade war between the US and China, rousing suspicions that the orders to disrupt Catcher's business came from the central government and were motived out of retaliation against the US government. Taiwan's ODMs are pawns caught in the cross-fire between the two economic giants.

It is alleged that the China government has also had a hand in the disruption US-based Wal-Mart has been facing to its operations in China.