In the virtual deadlock that diplomats have reached from both sides of the so-called ‘currency wars’ between China and the West, the wildcard play in this game of hold ‘em remains the very same exports that the West fervently consumes. China’s stance on the Renminbi allows exports to continue unfettered, fueling China’s market, which, at this point, still fairly resembles a one-way street instead of the revolving door they label as paramount to their agenda of domestic affairs. China has committed itself to bolstering domestic consumption.
Keeping in mind this milieu of growing pains in the Chinese market, what can be made of the curious magic act going on with Apple’s iPhone?
I’m not making a sly remark about how infatuated buyers respond to the aesthetics or performance of the sleek, trendy gadget; instead, I’m referring to the disappearing-then-promptly-reappearing iPhone trick.
A product made in China commands as much as $1000 on the black market.
American costumers lining up outside Apple stores are willing to slap down $400-600 for an iPhone (depending on whether or not they sign up for AT&T’s service contract or pay a premium to opt out). Some of the flagship stores in New York and other cities have begun turning away certain customers.
The action taken by some Apple retailers can be seen as discriminatory or vigilant, depending on your own point of view. Perhaps you think that Apple already makes enough money by peddling an image to consumers, most of whom remain blindly loyal to their Apple gadgets despite questionable ethics and glaring design flaws (think there are any lefties regretting that iPhone4 purchase?). Still, some of you may marvel at the craftiness and ingenuity of these shoppers that legally purchase the coveted mobile phone/handheld computer/mp3 player/gaming platform, only to turn around and hawk it; after the quick one-eighty, these pricey mobile phones are up for grabs after hitting the streets of Shanghai or Shenzhen. In China, where the phone is originally assembled, Apple products allow flashy spenders to instantly upgrade their status. Go figure.
I probably don’t need to underline the irony of having a Chinese-made gadget sell for double overseas and then return to China just to fetch quadruple price. It’s almost as if the added distance and transit make it more valuable.
What else happens behind the wings? China’s trade policy (with help from the navy) cock-blocks other nations trying to get their high-tech fix.
China is playing hardball with rare earth exports—crucial minerals needed for the production of high-tech devices and the development of the clean energies industry. Staying true to recent form, China is tightening the leash on Western countries looking to stock up on that sweet, sweet stuff. Not surprisingly, they’ve effectively forced Japan to go cold turkey since a dust-up between an errant Chinese fishing trawler and the Japanese navy; and again, predictably, the brief hiatus of the Chinese fishing boat captain (at the insistence of his Japanese hosts) ended with a less-than-amorous breakup last month. Whether or not China is making Japan pay for their perceived power play to yet another precious patch of earth (in this case an underwater natural gas field), one thing is clear: China holds all the trump cards when it comes to the tech manufacturing game. America has already sounded off about China’s unfair advantage when it comes to manufacturing clean energy technologies; now to exacerbate things further, we can’t even score the goods we need to kick the habit of guzzling fossil fuel. We’re as hapless as recovering junk addicts getting turned away from the methadone clinic.
Rory Keane is an American-born teacher and writer who has logged nearly two years in China, and is working on another year-long stint in the Middle Kingdom. He writes about travel, sociopolitical issues, health, entertainment, and culture, among other topics.
