China’s communist government got its hands dirty last week when House Speaker Nancy Pelosi (D-Ca) visited Taiwan. China saw this as a violation of the “One China” policy that the United States has adhered to for fifty years. This policy states that the U.S. government “recognizes that all Chinese on either side of the Taiwan Strait maintain that there is only one China and that Taiwan is part of China” and the United States “does not dispute not this position”.
The People’s Republic of China believes that the United States has violated its “One China” policy
While the US has an official relationship with the People’s Republic of China (PRC), it has an “unofficial” relationship with Taiwan which the PRC says was made official with Pelosi’s visit. As a result, the country showed military strength by flying 68 warplanes off the coast of Taiwan, sending warships to the Taiwan Straits and sending drones to Japan while Pelosi was in Taiwan. . The PRC also decided to end the discussions it had with the United States on various topics.
Some supplies sent to the Pegatron manufacturer are blocked by Chinese customs
Taiwan is where many big US tech companies, like Apple, source their chips. Taiwan Semiconductor Manufacturing Corp. (TSMC) is the world’s first independent foundry and counts Apple as its number one customer. Apple today told its Taiwan-based suppliers, including TSMC, that when shipping parts and components to China, they must comply with new Chinese regulations that include labeling supplies as manufactured. to “Taiwan, China” or “Chinese Taipai”.
The reason for Apple’s warning to its Taiwan-based suppliers is due to China’s decision to suspend supplies sent by Taiwanese suppliers to Pegatron’s Suzhou factory in China, which manufactures some products for American companies. like Microsoft and Taiwan. These shipments are detained by PRC Customs and all shipping documents and containers are scrutinized to ensure that they do not mention Taiwan or its official nickname “Republic of China”.
With the unveiling of the 2022 iPhone models just weeks away, that’s the last thing Apple needs
But yeah, here’s the catch. On the other hand, Taiwan requires that all exports bear a label indicating the origin of the shipment, which means that they must be stamped “Taiwan” or “Republic of China”. This is of course exactly what Chinese customs do not want to see. In order to avoid supply chain disruptions, Apple has warned its Taiwan-based suppliers to develop some sort of contingency plans.
Apple has also instructed its supply chain to review and modify carton labels and forms for shipments from Taiwan to China, if necessary, according to those familiar with the situation. Chip shortages and supply chain issues are a huge headache for Apple right now and with the tough times going, Apple needs to stay diplomatic.