For most American companies in China, this is true.
For Apple it is not.
From Ben Thompson at Stratechery:
This is a very big deal. Feel free to ignore anyone making snarky comments about China’s average monthly wage being the same as the price of an iPhone 5C. The two pertinent facts about China are that:
There is tremendous income disparity
There are a TON of people
So while many Western markets may have a greater percentage of the population that can afford an iPhone, the absolute number of Chinese who are potential customers is very high as well.
Sure, those are facts. But here's another fact: Just because you have a large population doesn't mean your economy is destined for greatness. It doesn't mean you're destined to overtake the U.S and it doesn't mean your destined to evolve, improve or exceed. All it means is that you have a lot of people living in your country (poor people). Will they become middle class? Maybe. But it's most definitely not "certain".
The fact of the matter is that they do have a large population size and that presents its own problems for economic growth, believe it or not. Hell, it presents problems for the long-term stability of the country. Right now China's biggest threat is itself - corruption in China is a pervasive and massive problem (Source: https://www.transparency.org/cpi2014/results). China isn't the only country with a massive population; India has one too. Ben Thompson's facts are also true about India.
What does any of those have anything to do with whether Apple needs China or not? Apple does not care if China is not destined for greatness or to overtake the US or to solve the corruptness problem. They only care if the number of people willing and able to purchase their products does not decrease.
> Feel free to ignore anyone making snarky comments about China’s average monthly wage being the same as the price of an iPhone 5C. The two pertinent facts about China are that:
I've seen plenty of Chinese people whose actual individual monthly wage was almost certainly less than the price of an iPhone; it didn't stop them from having iPhones.
Last I heard, Google, Facebook, Yahoo, Adobe, and a huge slew of smaller tech companies (if you want to stay in the same industry as Apple) had all colluded together to suppress wages.
I have a hard time believing anyone who claims this was an exception to a rule. It seems far more likely to believe it is the rule.
They lobbied for things like H-1B visas that let them get cheap people with limited options for career movement. You get the benefit of on-shore workers under tighter control and suppression of wages.
They colluded to influence labor standards over many years to declare broad swaths of overtime eligible employees as "exempt".
Apple and those tech giants got caught doing more direct collusion and unethical behavior. That isn't an unknown or shocking revelation. Pretty sure the mall bagel place I worked in tossed resumes from several other eateries.
I would say it happens, and collusion is not a good free market practice, and I disagree with it. Are the 'lower' salaries lower than related industries or worker tiers? Did the tech bubble generate over-average salaries, and now the big tech companies can't get tech workers to work for less? I worked at a law firm years ago, where they brought in some Russian programmers on visas for less money, but still the salary was better than what other workers in the same firm were making. The Russian workers also had a more disciplined software development background than the other American workers at the firm, were more productive and incited vicious, misplaced anti-Russian sentiment. I also remember when word processors were making a fortune in the 80s, but that quickly got watered down when more people learned MS Word and to touch type.
I always hear this, but given the experience of most american companies in china, it seems little stretched.