Apple isn't leaving China. Its footprint is getting harder to see.

Mint

11 hours ago

Apple's plans to make iPhones in India, components in Vietnam, and build new hubs across Southeast Asia reflect a meaningful effort to diversify away from China. But they tell only part of the story.
In March, Apple CEO Tim Cook announced a new $99 million clean energy fund during a visit to Beijing. He didn't disclose project locations or recipients—only that Apple's commitment to China was 'expanding."
The announcement came just two months before Chinese regulators delayed Apple's rollout of generative artificial intelligence features, the Financial Times reported. Those developments show how even one of China's most entrenched U.S. companies may face political and commercial friction as it tries to do business in both countries. As geopolitical pressure intensifies and investors look for clarity on decoupling, Apple's recent maneuvers offer a lesson for global businesses: A company need not leave China entirely so long as it can more effectively hide itself within it.
Apple's behavior over the past several years shows it recalibrating its exposure to the actors and regions in China that carry reputational or regulatory risk. But it isn't ceasing to do business in China. Rather, Apple has stepped back from some of its direct affiliations and reduced its visibility without severing its ties to the business ecosystem in China, which remains dominated by the Chinese Communist Party.
This model is instructive for other multinationals operating in China and other complex authoritarian environments. Confrontation and divestment are costly. Structural opacity, by contrast, offers flexibility—and protection.
Apple needs to remain in good standing with regulators on both sides of the Pacific. That has led to unusual arrangements in China's western Xinjiang region.
The Chinese Communist Party's policies of mass surveillance and forced labor there have deservedly drawn international condemnation. Congress passed the Uyghur Forced Labor Prevention Act in 2021, banning imports tied to forced labor in Xinjiang. Many Western businesses have withdrawn entirely from doing business in Xinjiang.
In 2016, Apple announced that it had taken minority stakes in four wind power projects in China as part of a strategy to decarbonize its supply chain. The projects were developed in collaboration with Goldwind, one of China's largest wind turbine makers.
Goldwind has strong ties to state-led infrastructure planning and to Xinjiang. The company was formerly called Xinjiang Goldwind but dropped the word from its name in 2023.
Though not sanctioned by the U.S., Goldwind has faced criticism for its ties to Xinjiang from European and U.S. politicians for its suspected ties to forced labor. An investigation by the Tech Transparency Project, a nonprofit organization, and The Information, a tech and business publication, linked Goldwind to state-run labor transfer programs and construction projects involving the Xinjiang Production and Construction Corps, a U.S.-sanctioned paramilitary entity.
U.S. pressure over forced labor in Xinjiang intensified in 2020. Companies such as H&M and Nike, which issued statements addressing forced labor allegations, faced backlash on social media in China.
By 2021, Apple's affiliated entities no longer appeared as shareholders in the Goldwind wind projects in Xinjiang. Corporate filings, reviewed in a Chinese business registration database, indicate that the equity stakes were transferred to subsidiaries controlled by Goldwind. Apple didn't publicly disclose the move, and no mention appeared in its environmental or investor reporting: Apple's investment shift is being revealed here for the first time.
Apple didn't respond to requests for comment. The company has addressed allegations of forced labor involving Xinjiang in at least one other case, saying it regularly audits its supply chain to avoid the practice. It cut ties with a Chinese supplier that had been accused of forced labor in 2021, Bloomberg reported.
Apple may have found other investing strategies that allow it to maintain relationships with Chinese entities in less visible ways. In 2018, Apple had announced it and 10 Chinese suppliers would invest $300 million in China Clean Energy Fund. That fund allows Apple's capital to reach state-linked firms and potentially sensitive regions without appearing in public filings.
Among the beneficiaries of the fund, disclosed in a Chinese business registration database, is China General Nuclear Power Group, a state-owned firm added to the U.S. Entity List in 2019 for military ties. U.S. companies face sharp restrictions on doing business with companies on the list. The initial clean energy fund, designed to last just four years, ended in 2022.
This year, Apple announced a successor fund worth approximately $99 million during Cook's visit to Beijing—but this time disclosed neither project locations nor recipient companies, continuing its reliance on indirect investment vehicles.
This isn't a retreat from China but a careful reconfiguration—one that allows Apple to meet its clean-energy goals while addressing government sensitivities in both the U.S. and China.
In 2024, Apple ranked third for China exposure of large U.S. companies in Strategy Risks SR 250 rankings; it has since dropped to 27th. Apple continues to operate at scale within China's commercial and political systems, while relying on structures that make its presence less legible to outside observers. The company meets regulatory expectations in both Washington and Beijing, while it avoids direct exposure that could invite retaliation from either.
U.S. sanctions law covers physical imports from Xinjiang, but it doesn't restrict capital flows. Financial contributions routed through investment vehicles, such as the CCEF, are legally safe—even if reputational risk persists.
Apple isn't exiting China. It has re-engineered its presence there to be less visible and harder for outsiders to trace. Its energy partnerships, once direct and disclosed, are now filtered through funds. In Xi Jinping's China, the companies that endure aren't the ones that speak out. The ones that endure are the ones that adapt—and recede from transparency.
Guest commentaries like this one are written by authors outside the Barron's newsroom. They reflect the perspective and opinions of the authors. Submit feedback and commentary pitches to [e-mail].