China iss not going to put up with Apple profits leaving the country!
Let's face up to the reality. It was OK to have plants to build Apple stuff in China, after all they made some money. But to sell Apple products with typical large profit margins represents a large flow of cash out of the country. Then you add in China Mobile and the government has not been pleased how Apple wants any deal to include large flow of money to Apple. It ain't going to happen folks. Remember China is a comminist government.
This campaign will be all about money. Essentially Apple can sell its products in China, but a lot more of the profits must stay there. This is not good at all for AAPL shareholders.
China has currency outflow control. In general, a foreign company can only take out any cash not in RMB plus a small amount in RMB every year. Any amount exceeds the limit must get special approval from the government. When a foreign owned business is closing down, it can only take out the same amount as it originally invested in. So unless Apple is going to the black market or backdoor channel to smugger cash out of China, its profits must stay in China. That is one of the reasons it is making its products in China so it can use the profits to pay for the manufacturing.
So once there were significant sales the profits would be more than all the costs of assembly, then what would Apple do ? More importantly how could this help shareholders? Book profits which can never be used for dividends or buyback ?
Apple can give China a big GFY when they exit the country for manufacturing. 1M jobs lost, no more technology to steal and many more companies will follow suit. China is biting the hand that feeds it. A Foxconn worker kills himself because of layoffs. How about 1M layoffs?
That might be a good point except for 2 points:
1, Apple cannot switch assembly out of China without huge cost increases on each product. And the interruption to supplies would be devastating.
2. If Apple pulled out of China manufacturing, all of the competitors would now have a further advantage because they could get even lower assembly prices from the Chinese companies that would be desperate to replace the lost business.