Tim Cook stood inside Apple’s newest Shanghai store, the second-largest Apple Store in the world, and was explicit about the company’s bargain with China. “There’s no supply chain in the world that’s more critical to us than China,” he told China Daily. Apple’s relationship with Chinese suppliers, Cook said, was almost 30 years old. “We’ve been building up and investing more and more.” That was in March 2024.
Two years later, in April 2026, Apple announced that Cook will hand the CEO title to John Ternus on September 1. As executive chairman, Cook will, in Apple’s words,
“assist with certain aspects of the company, including engaging with policymakers around the world.”
Cook was right about the supply chain. Every multinational operates by some government’s permission. Apple’s problem, under Cook, is that it became entirely dependent on China’s goodwill. The Chinese Communist Party has declared technology a national project, not a market handled by private companies alone: at the 2022 Party Congress, President Xi Jinping told delegates that China must “resolutely win the battle in key core technologies.” Apple sits at the center of that battle.
The result is that Apple now operates as two different companies—one in the United States, where it speaks freely and uses every lever that democracy allows, and one in China, where it complies, stays silent, and ships what Beijing approves.
Strategy Risks, a firm that quantifies corporate exposure to China for institutional investors, ranked Apple as tied for second with Carrier Global, an air conditioner manufacturer, among 250 of America’s largest companies for China exposure, behind only Ford. The ranking was weighted across supply chain, alleged forced labor exposure, partnerships and politics, and regional risk. Cook has made this a part of his legacy.
Cook arrived at the company in March 1998 as senior vice president of worldwide operations. Apple nearly went bankrupt the year before; Steve Jobs had recently returned as interim CEO. Jobs had already tried building computers in-house at his previous company, NeXT, and watched the costs eat it up. Cook’s job was to make sure Apple did not repeat that failure.
Cook soon closed Apple’s high-cost, company-owned plants in California, Singapore, and Ireland, sold off factory inventory, and moved production of the iMac to contract assemblers in Asia who could spread their overhead across many clients, lowering costs.
Beginning in 1996, Hon Hai, the Taiwanese assembler the world would come to know as Foxconn, built a campus in Shenzhen large enough to house, feed, and employ a quarter of a million workers. After Apple shipped the iPhone 4 in 2010, a Foxconn complex in Zhengzhou—an inland provincial capital of roughly 10 million people—was scaled up over the next several years into what the industry came to call iPhone City. At peak, it produced roughly half of the world’s iPhones.
Patrick McGee’s book Apple in China shows that Apple did not merely move its supply chain to China, but effectively built China’s electronics industry. McGee argues that Apple ended up “sending thousands of engineers across the Pacific, training millions of workers, and spending hundreds of billions of dollars.” By 2005, he writes, Jobs understood that Apple could not easily unwind the system Cook had built.
Cook drove the strategy and won the internal disagreement with Jobs, who had long believed Apple should build its own products. McGee reports that Apple invested $275 billion in upgrading Chinese suppliers between 2016 and 2021.
Compare that to the U.S.’s CHIPS and Science Act, passed by Congress in 2022, which authorized $52.7 billion in spending over five years. A single American company, Apple, invested more than five times the act’s total—but in China, not the United States.
In October 2019, Cook became chairman of the advisory board of Tsinghua University’s School of Economics and Management. The board is one of the venues the Chinese state uses to stay close to foreign business, and its honorary chairs are often senior Communist Party officials. The appointment was announced as a three-year term, and Cook has continued to appear at the board’s annual meetings.
He also attends the China Development Forum, Beijing’s annual gathering with foreign CEOs. During his March 2024 trip, Cook told China Daily that he supported Xi Jinping’s economic doctrine called “new quality productive forces”—the campaign for China to lead in chips, artificial intelligence, and advanced manufacturing. Cook called it “essential” and “the future.”
Cook has said, in his own words, how he handles all this. In July 2017, Apple removed dozens of virtual private network apps from the Chinese App Store at Beijing’s request. VPNs are how Chinese citizens reach the open internet—how they get around the Great Firewall, the state system that blocks foreign news, social media, and search engines, and monitors what people say online. Apple’s compliance closed one of the largest doors to escape China’s surveillance state.
On Apple’s earnings call that August, Cook defended the decision: “We would obviously rather not remove the apps, but like we do in other countries, we follow the law wherever we do business.”
Four months later, Cook went further. In December 2017 he traveled to China to keynote the World Internet Conference, the Chinese government’s annual showcase for its model of a censored, state-controlled internet. Speaking afterward at the Fortune Global Forum in Guangzhou, Cook defended the appearance: “From my American mindset, I believe strongly in freedoms. They are at the core of what being an American is, and I have no confusion on that. But I also know that every country in the world decides their laws and regulations.”
This is a false equivalence. China is an authoritarian one-party state. The Chinese Communist Party is not elected and is not accountable to its citizens. American laws are written by an elected Congress, debated in courts, and challenged by a free press. Chinese laws are issued by a party that does not allow any of that. To treat the two as equals—as Cook does—is to treat compliance with Beijing’s censorship and surveillance demands as morally identical to complying with the U.S. tax code.
In a 2018 keynote in Brussels, Cook told an audience of privacy regulators, “we at Apple believe that privacy is a fundamental human right”—more than a year after Apple removed dozens of VPN apps from the Chinese App Store, the tools Chinese citizens used to escape state surveillance. For Cook, privacy is a fundamental human right in Brussels. In Beijing, he treats it as a regulatory matter.
The same pattern holds for forced labor. In July 2020, Cook told Congress: “Forced labor is abhorrent. We would not tolerate it at Apple.” Four months later, the Washington Post reported that Apple was paying the lobbying firm Fierce Government Relations $90,000 to lobby on multiple bills, and that congressional staffers said the company was working against provisions of the Uyghur Forced Labor Prevention Act, the bill aimed at blocking American companies from importing goods made with forced labor from Xinjiang.
I have reported from Xinjiang, and I have written a book about the monstrosity the Chinese state has built across that region—one of the most technologically sophisticated police states in history, complete with concentration camps and an AI surveillance system called “Sky Net.” The Chinese state also runs coercive labor-transfer programs that move Uyghur workers from Xinjiang into factories across the country. Investigations by The Information, the Tech Transparency Project, and the Washington Post have linked Apple suppliers to those programs. Apple denied the findings.
Since then, Cook’s posture has held, and yet Apple has not been rewarded. Apple’s iPhone sales in mainland China fell 24% in the first six weeks of 2024, according to Counterpoint data reported by Reuters. And Apple’s China revenue declined through much of 2024 and 2025.
But falling sales do not give Apple an exit. JP Morgan estimates that roughly 95% of Apple products are still assembled in mainland China and Taiwan; nearly half of Apple’s top 200 suppliers have facilities there. Even if Apple loses Chinese consumers it still needs Chinese factories.
The leverage Cook handed Beijing shows up most clearly in AI development, where Apple is being shut out of the Chinese market in plain view. Apple Intelligence runs on American iPhones. It does not run on iPhones in mainland China. Chinese rules require generative-AI services offered to the public to obtain regulatory approval. In February 2025, The Information reported that Apple and Alibaba had submitted co-developed AI features for approval by China’s Cyberspace Administration. The approval has yet to come.
Under China’s regulatory regime, AI systems are tested against roughly 2,000 sensitive questions touching Tiananmen Square, Taiwan, Xinjiang, and challenges to Communist Party authority. The Apple Intelligence that Chinese citizens will eventually use is the version that, to no surprise, refuses to discuss the same points that Cook himself has refused to discuss.
One could argue this is good for the United States—that being shut out of China’s AI market will force Apple to consolidate at home. It would be, if that were Apple’s choice. But it is not. Apple is not retreating from the Chinese AI market. It is partnering with Alibaba to build a censored version of Apple Intelligence that Chinese regulators will probably accept.
This is the quagmire that new CEO John Ternus inherits, and it cannot easily be undone. An iPhone has hundreds of components, and the suppliers, engineers, and trained workers who make and assemble them are concentrated in China. India and Vietnam, which handle final assembly, cannot replicate that ecosystem at the precision the iPhone requires.
The most valuable American consumer-technology company now operates, in the strategic technology of this decade, under the permission of an adversarial police state. The supply chain Cook built was once seen as Apple’s greatest achievement. Now it has become its chain.