Beijing, for decades, has encouraged such efforts at the national level, by developing special economic zones that offer tax breaks to multinationals and exempt them from costly and cumbersome rules.Ĭhina's lure is strong. Local and provincial officials, in an effort to create jobs and drive growth, have courted manufacturers with incentive packages that make it easier and cheaper to do business. But the Zhengzhou operation shows the extent of China’s effort to entice overseas multinationals to set up production facilities in the country. US officials have long decried China’s support of its state-owned companies, calling the subsidies and other aid an unfair competitive advantage in a global marketplace. Locals now refer to Zhengzhou as "iPhone City". Running at full tilt, the factory here, owned and operated by Apple's manufacturing partner Foxconn, can produce 500,000 iPhones a day. It all centres on Zhengzhou, a city of six million people in an impoverished region of China. The package of sweeteners and incentives, worth billions of dollars, is central to the production of the iPhone, Apple's best-selling and most profitable product. The well-choreographed customs routine is part of a hidden bounty of perks, tax breaks and subsidies in China that supports the world's biggest iPhone factory, according to confidential government records reviewed by the New York Times, as well as more than 100 interviews with factory workers, logistics handlers, truck drivers, tax specialists and current and former Apple executives. The state-of-the-art facility was built several years ago to serve a single global exporter: Apple, now the world's most valuable company and one of China's largest retailers.
Unmarked trucks stretch for more than a mile awaiting the next load headed for Beijing, New York, London and dozens of other destinations. Government officers, in sharply pressed uniforms, race around a maze of wooden pallets piled high with boxes, counting, weighing, scanning and approving shipments. A vast, boxy customs centre acts as a busy island of commerce deep in central China.
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