Apple Tells Taiwanese Suppliers To Avoid Disruption

Apple has told suppliers to label products made in Taiwan to be consistent with mainland China’s customs regulations in order to avoid supply chain disruptions from customs inspections, according to a report from Nikkei.

The move follows a visit by US House Speaker Nancy Pelosi to Taiwan, the most senior US political figure to visit the island in 25 years, which provoked a furious backlash by the Chinese government.

Chinese regulations require products or parts made in Taiwan to be labelled as made in either “Taiwan, China” or “Chinese Taipei” to avoid any suggestion that the island is independent of the mainland.

Tensions

Taiwan was effectively founded in 1949 when the Chinese Nationalists established their capital in Taipei amidst its decades-long civil war with the Chinese Communist Party.

Under the CCP’s “One China” policy, officially recognised by the United States, mainland China regards Taiwan as part of its territory and opposes claims that it is a separate country.

Following Pelosi’s visit to the island last week China conducted a near-blockade of the island with live-fire naval exercises.

The country also imposed sanctions on Pelosi and her family and cut off military dialogue with the US, amongst other measures.

Supply chain delays

Politics in both the US and China are entering sensitive periods, with US midterm elections scheduled for November and Chinese president Xi Jinping looking to secure an unprecedented third term in office at the 20th National Congress of the Chinese Communist Party, scheduled for the second half of the year.

Apple, which is heavily dependent on China and Taiwan for the manufacture the iPhone and other products, was said to be looking to avoid supply-chain delays as it ramps up production of the next-generation iPhone, set for launch next month.

Some iPhone components were held for review by Chinese customs on Thursday to see whether they were labelled correctly, Nikkei reported, citing unnamed sources.

Next-gen iPhone

Taiwanese iPhone assembler Pegatron said late last week its mainland China plant was operating normally, following a media report that shipments to the plant were being held for customs inspections.

Pegatron and Taiwan’s Foxconn are major manufacturing partners in Apple’s upcoming iPhone launch.