Apple Hails China Success, But Pollution Clouds Gather

Tuesday’s quarterly earnings call included the now-traditional reference to Apple’s explosive success in China, which has become the company’s second largest market. From China Real Time Report:

On a call Tuesday about the company’s financial results, Mr. Cook said Greater China is Apple’s “fastest growing major region by far,” accounting for 16% of the company’s revenues in the most recent quarter. Greater China — a region that includes mainland China, Taiwan and Hong Kong — accounted for 12% of Apple’s revenue in the fiscal year just finished, up from 2% two years earlier, he said ….

“How far can it go? Certainly in my lifetime, I’ve never seen a country with as many people rising into the middle class that aspire to buy products that Apple makes,” Mr. Cook said. “And so I think it’s an area of enormous opportunity, and it has quickly become number two on our list of top revenue countries.”

But there are signs of growing official scrutiny of the company’s environmental impact, which was the subject of a major independent report in August. On top of Suzhou authorities’ partial closure of a major supplier’s factory, state broadcaster CCTV aired a report criticising Apple for tolerating lax environmental standards, specifically pointing at Catcher, the factory’s operator. From Reuters:

In the 40-minute report, CCTV named Japan’s Meiko Electronics and Taiwanese notebook casing supplier Catcher Technology as being polluters ….

The report accused Apple of turning a blind eye as its suppliers polluted the country. It also alleged that 27 suspected Apple suppliers had severe pollution problems, from toxic gases to heavy metal sludge ….

“The environmental issue could have a longer-term impact on the supply chain because we don’t know if more factories will be asked to close down,” said KGI Securities senior vice president Chu Yen-min.