Pelosi Visit Pushes Apple to Focus on Labels
After the tension producing visit to Taiwan by House Speaker Nancy Pelosi, Apple (AAPL) has cautioned its suppliers in Taiwan who are shipping components or product to China to make sure the labeling complies with what are long-standing Chinese policy that requires said items to be sourced labeled as “Chinese Taipei” or Taiwan, China”, a tacit reference to the Chinese government’s belief that Taiwan is part of China, succinctly summarized in a document circulated by the Chinese Embassy in the US entitled, “Taiwan – an Inalienable Part of China”, which details a short history of the 1912 Chinese revolution and the Chinese civil war in the 1940’s, but is very specific in stating that “The lingering civil war which was imposed on the Chinese people in late 1940s and more importantly the intervention by foreign forces against the reunification of China led to a temporary state of separation between the two sides of the Taiwan Straits after the People's Republic of China was founded. But the status of Taiwan as part of China's territory has never changed, nor has the Government of the People's Republic China ever given up its jurisdiction over Taiwan.”
The document goes further in that when diplomatic relations were established between the Chinese government and the US in 1949 said agreement included “The United States of America recognizes the Government of the People’s Republic of China as the sole legal government of China. Within this context, the people of the United States will maintain cultural, commercial, and other unofficial relations with the people of Taiwan. The government of the United States acknowledges the Chinese position that there is but one China and Taiwan is part of China.” However the document goes further stating that the Chinese government does not object to the US maintaining non-governmental economic and cultural relations with Taiwan, but “What we do oppose is US conducting official exchanges with the Taiwan authorities”, drawing a rather vague line between official and non-official meetings with the Taiwan government.
With all of that said, Apple is not taking a chance that its Taiwan supply chain inadvertently angers Chinese Import/Export authorities by using labeling that implies that Taiwan is not part of China, such as “Made in Taiwan” rather than “Taiwan, China” or even “Chinese Taipei”, as the Pelosi visit has raised tensions between the US and China relative to Taiwan. In light of the upcoming release of the iPhone 14 line, it would seem Apple does not want to find that components and materials are being more carefully examined, slowing shipments, or even held for official review and has asked its suppliers in Taiwan to make sure the labeling complies with Chinese rules. While assembler Pegatron (4938.TT) states that all operations in China are running normally, there have been rumors that some components from Taiwan had been held by authorities for more detailed inspection.
The document goes further in that when diplomatic relations were established between the Chinese government and the US in 1949 said agreement included “The United States of America recognizes the Government of the People’s Republic of China as the sole legal government of China. Within this context, the people of the United States will maintain cultural, commercial, and other unofficial relations with the people of Taiwan. The government of the United States acknowledges the Chinese position that there is but one China and Taiwan is part of China.” However the document goes further stating that the Chinese government does not object to the US maintaining non-governmental economic and cultural relations with Taiwan, but “What we do oppose is US conducting official exchanges with the Taiwan authorities”, drawing a rather vague line between official and non-official meetings with the Taiwan government.
With all of that said, Apple is not taking a chance that its Taiwan supply chain inadvertently angers Chinese Import/Export authorities by using labeling that implies that Taiwan is not part of China, such as “Made in Taiwan” rather than “Taiwan, China” or even “Chinese Taipei”, as the Pelosi visit has raised tensions between the US and China relative to Taiwan. In light of the upcoming release of the iPhone 14 line, it would seem Apple does not want to find that components and materials are being more carefully examined, slowing shipments, or even held for official review and has asked its suppliers in Taiwan to make sure the labeling complies with Chinese rules. While assembler Pegatron (4938.TT) states that all operations in China are running normally, there have been rumors that some components from Taiwan had been held by authorities for more detailed inspection.
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