For years some of Silicon Valley's biggest tech firms have been shameless in kowtowing to China and the Chinese Communist Party.
But as those relationships seem to fray, the consequences could have a heavy impact on tech's reliance on China's supply chain manufacturing apparatus.
Access to China and its 1.5 billion people, many of whom are newly middle class following that country's economic ascension, has always been the holy grail for American capitalists looking for new markets outside of the U.S.
Tech companies were no different in their pursuit of the Chinese market and in the past, many were willing to break their own internal rules in order to get a bite at the apple.
Last year, Microsoft's Bing search engine reportedly censored search results for "tank man," the iconic photo of a single man standing against a tank during China's Tiananmen Square massacre in Beijing.
In 2020, a China-based employee for video-conferencing company Zoom was accused of censoring virtual meetings commemorating the anniversary of the same massacre.
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Has Google Had Enough?
Google, a division of parent company Alphabet (GOOGL), has made efforts to play China's censorship game in the past.
In 2018, the company was excoriated by employees and the media after it was leaked that the company was working on a Chinse search engine project, nicknamed Dragonfly, that was to be heavily censored.
Years later, Google, possibly learning from the Dragonfly scandal, is taking a different tact.
The company, whose algorithm is supposed to index results based on popularity, has reportedly refused to change its search results for 'Hong Kong national anthem" to display China's national anthem.
Instead users who search the song are taken to pages featuring Glory to Hong Kong, the unofficial protest anthem that sprung from the 2019 pro-democracy protests that erupted in the city.
China banned the song in 2020 and Hong Kong's security secretary Chris Tang said that a request was sent to Google to replace the protest anthem search results with China's national anthem
That request has been denied.
“We have approached Google to request that they put the correct national anthem at the top of their search results, but unfortunately Google refused,” Tang said, according to The Guardian.
Google did not immediately respond to a request for comment, but Google is starting to make a habit of defying the CCP.
Manufacturing in the People's Republic
China's unprecedented ascent from third-world country to the largest economy in the world was built on the back of its manufacturing sector.
Country's around the world turned to China for their cheap manufacturing needs. No country has relied more on China for its manufacturing needs than the U.S. with China exporting more than $577 billion in goods (18% of total exports) to the U.S. in 2021 alone.
But the recent lockdowns have once again placed a spotlight on the Foxconn facility in the country that manufactures the bulk (70%) of iPhones sold by Apple (AAPL).
Over the weekend, the Wall Street Journal reported that Apple has accelerated its plans to shift some production of its hardware outside of China, instead opting for manufacturing rivals in India and Vietnam.
Disruptions at the Foxconn facility tied to the Zero Covid lockdowns and issues with worker pay have led to strikes at the facility.
Apple is expected to produce 3 million fewer iPhones than previously anticipated as it contends with ongoing lockdowns in the region, according to Bloomberg. But Apple is just the tip of the iceberg.
According to CNBC, demand from the U.S. for Chinese manufacturing has dropped 40% while container volume is down 21% since August.
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