Apple Is Being Targeted in Our Trade War With China

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So Apple’s now being targeted by China in this, want to call it an economic Cold War? We’ll call it an economic Cold War with China. Their stock price has gotten a hit this past week, down about 7%. The Chinese government is banning the iPhone and other foreign branded devices by use by workers at central government agencies.

This ban might also be extended to state-owned enterprises and other government-backed entities that could amount to a pretty big swath of people in a state economy with a population of more than 1.4 billion. According to China’s National Bureau of Statistics, about 56.3 billion urban workers were employed by state-owned units in 2021.

Those jobs commanded an average wage of about 8% above the national urban average, which is obviously a very attractive group of people that you want to sell phones to. Apple ships 230 million iPhones every single year. 56 million is a big chunk out of a pool of potential buyers. And obviously you got a bit of a maturing.

smartphone market at this point in time. We talked about Huawei. Huawei just put out a new phone that says sold out in China. It does not have 5G speeds. It’s getting close though, and they are backordered over there. Again, put the technology about 2018 compared to Apple now in 2023.

Okay, what does this mean? First and foremost, okay, this is to be expected. We’ve had a lot of conversations here. We have, you know, certain states banning TikTok. We’ve banned certain chips to go over to China. Some of these high-speed 5G chips that we don’t allow them to go over there anymore.

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And China’s been waiting and waiting and waiting. And obviously we’ve got this whole situation with Taiwan going on. But I wanna share with you, this is fascinating, okay? And again, it troubles me a great deal because there’s so many people out there that know so little about our adversaries and their history and they don’t put the time in to actually learn about them. That the…

The title of the Wall Street Journal article today is, Apple Becomes the Biggest US-China Pawn. Pawn, yet. Pawn, from the game of chess.

We play chess. It is a Western game. China doesn’t play chess. It’s completely different over there. I wanna share with you what they play. This is important into understanding who we’re dealing with. Their game there, their board game over there, their strategy game, it’s called Go. It’s called Go. Sounds simple, right?

Well, you know, this game has been around for 2500 years. 2500 years, they’re still playing it. I’m gonna read through how this game is played and how it works. You’ve got two players and the aim of this game is to surround more territory than your opponent. And again, basically what you’re looking at, you got the…

playing pieces are on a board and they’re called stones. One player uses white stones, the other uses black stones. And the players take turns placing their stones on the various different vacant points. They call it intersections on the board. Once you place a stone, okay, you can’t move a stone. Stones are only removed from the board if the stone or group of stones is surrounded.

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by opposing stones on all adjacent points in which the stone or group is captured. The game goes on until nobody wants to play anymore. Nobody wants to play anymore, nobody wants to make an additional move. When a game concludes, the winner is determined by counting each player’s surrounded territory along with captured stones and…

You know, points are added to the score with the, with the white stones as compensation for playing. Games, basically you resign, okay? When one is said and done, that’s how it happens. You understand? Okay, I’ve lost. Now, let’s also think a little bit about Sun Tzu, the art of war. We all know about that, right? Again, it’s studied today. Now, what is the ultimate aim? Ultimate aim for Sun Tzu is to not, is not fight.

Their ultimate aim, and again, this is throughout their history, and you don’t understand, again, how these people think and how they operate, they harken back to all of this stuff. Okay, this is important to them. The ultimate aim is not to fight. Okay, you want to win by not firing a shot. You use strategy in order to do this. So as we’ve been putting our stones on the board with

TikTok and other things, tariffs, whatnot. China is gonna start making their moves too. Again, still to this day, do we have issues? Yeah, I guess we do, but there’s one area in China, I mean, it’s estimated that Apple employs over a million Chinese citizens. They’ve offshored some of the things that they’re doing, but they can’t do it all at this point in time. And again, this is why

It seems to me that the best way of handling this situation is a bit of a meeting of the minds and understanding who you are doing business with and understanding that again this is a it’s the cultural differences between the West, China and the West, it’s extraordinary. And again

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I can’t even do it justice. I’d be talking about this for hours here on the podcast, which I’m not going to do. It’s fascinating. And again, I would suggest reading about it. I kind of hope that some of the people in charge in DC were actually understanding this to some degree. Again, people think, you know, again, we have this mentality as well, China wants to take over the world. No, that’s

That’s not how they operate. Historically, historically they’re operating where they want to create some sort of harmony, you know, with the surrounding area. This is what they’ve been throughout their entire history. The concept of what the, you know, the middle, you know, kingdom, which they called it was, is that, you know, this is it, this is as far as we really want to go.

and the surrounding areas can do business with this. They, we like to, they called it paying tribute, their society for a long period of time, they just are very aloof, felt that it was far superior. Their culture was far superior to the rest of the world. And again, you go through periods of time, and again, you have to study their history to some degree to say, gee whiz, why didn’t they open up to Great Britain? They just didn’t feel the need to.

again, that brought upon battles and wars, which they were unprepared for with the Brits and the Opium Wars and all these other things. Again, it gets complicated to some degree, but not so much on the other hand. It’s important to understand who your adversary is. And the way it’s played in the media, the way it’s discussed in the media, even here in this thing, China pawn, no, they don’t play chess, they play go. Watch Dog on wallstreet.com.