China has found itself on the back foot amid the US-China trade war but in this mighty tirade, the US brands are giving China a bargaining chip. While some Chinese firms have taken a hit due to the tirade with Washington, the US brands are enjoying a remarkable success in China. At the helm of these US brands is Apple which has hit a record high in terms of the value of its shares.
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Apple has enjoyed a market capitalisation of almost $1 trillion as reported by Global Times. It was only recently that California based Apple reported its profits for the third quarter that ended on June 30. Apple in this quarter has witnessed a hike in sales of 19 per cent for China. The sales in the third quarter stood at $9.6 billion after a 19% increase with respect to the previous quarter. As of now, China is the most imperative overseas market for Apple but nationalist sentiments might change the mood in the Chinese market seeing Trump’s protectionism.
If Chinese people resort to targeting Apple out of anger for the protectionism shown by the US, Apple would become vulnerable. China is both a production and processing base for Apple which is a great example of global manufacturing. But if the trade war comes down heavily on China then Apple too would be on the receiving end of some heavyweight suffering. Apple needs to share the dividends of its development with the Chinese people to immune itself amid the trade tirade between Washington and Beijing.
According to a certain set of statistics, the processors for Apple in China only get 1.8% of the profits made by a device. The larger chunk of profits made by Apple comes from its business in China. The company must share more profits with the local Chinese people to continue its enormous success in China. China surely will not ever think about kicking Apple out among other US brands but Apple must immune its growth in China.