Apple capital repatriation raises concerns in China, experts say

Updated 2018-01-19 09:21:03

Apple Inc's move to bring hundreds of billions of dollars in overseas cash back to the U.S. has raised concerns in China whether the U.S. technology giant will also reshore some of its technology and factories, which would hit the growth of Chinese regions where many companies make iPhones, experts said.

On Thursday, Apple announced a new set of investments to build on its commitment to support the U.S. economy and its workforce, read a statement posted on Apple's website.

Apple expects to make more than billion in capital expenditures in the U.S. over the next five years and create more than 20,000 new jobs through hiring at existing campuses and opening a new one.

"We are focusing our investments in areas where we can have a direct impact on job creation and job preparedness," CEO Tim Cook was quoted as saying in the statement.

If Apple simply intends to bring funds held overseas back to the U.S., it is not that a big deal because such a move will not have much impact on the advance of the company's current global business, Liu Dingding, an independent technology analyst, told the Global Times on Thursday.

"But the capital repatriation might signal whether Apple will take more opportunities, technology and factories back to the U.S., which would hit the economic growth of some provinces including Central China's Henan and North China's Shanxi," Liu said.

Apple's major manufacturing partner Foxconn Technology Group entered Henan Province in 2010, and Foxconn contributed about 70 percent to Henan's trade in 2016, according to media reports.

"If Apple reshores plants, Foxconn would be hit hard," he noted.

Apple's move is in line with U.S. President Donald Trump's determination to bring manufacturing back to the country, and U.S. recent tax cuts are also an encouragement for Apple to do so, Wang Danqing, a partner at the Beijing-based consulting firm ACME, told the Global Times on Thursday.

Wang noted that Apple has been involved in some tax disputes in various global markets and bringing money back to the U.S. would be conducive to protecting Apple's capital.

The European Commission ruled in August 2016 that Apple would have to reimburse Ireland a record 13 billion euros ( billion) to make up for what it considered to be unpaid taxes over a number of years, the Guardian reported in December 2017.

On Thursday, Apple opened an official account on one of China's most popular social media apps, WeChat, in an apparent bid to woo more Chinese consumers.

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