Loving China does not preclude loving iPhone

June 21, 2019 10:23
The iPhone XR, which costs 7,599 yuan, was the best-selling smartphone model in this year's June 18 shopping festival, according to JD.com. Photo: Reuters

Chinese e-commerce company JD.com grossed 201.5 billion yuan (US$29.43 billion) of online sales during the June 18 shopping festival, up 27 percent from the year before.

Smartphones were one of the best sellers. Last year, Honor, a lower-priced line of Huawei came out on top, but this year iPhones generated most sales.

Despite the US-China trade conflict, Chinese consumers do not seem to be boycotting US products at all, unlike what they did to Japanese cars and South Korean pop stars when relationships with those countries soured at one point.

Huawei is a top target of US President Donald Trump in containing China’s rise. That has stirred up public outcry. While the public are strongly supportive of Huawei, they are not ditching Apple products in favor of the homegrown telecommunications equipment giant.

This shows Chinese consumers are becoming more mature, rather than confusing purchase decisions with nationalism. At the end of the day, pricing and quality matter most.

In the past, mid-range to low-end phones from Honor and Xiaomi used to be the biggest winners of China’s online shopping festivals. However, the best-selling model in this year’s June 18 festival is the iPhone XR, which costs 7,599 yuan. Second is Huawei, suggesting Chinese consumers are gradually shifting to pricier handsets.

To some extent, this also shows the robust buying power of China’s middle class, something American businesses simply can’t afford to give up.

For this reason, the chance of a breakdown in the latest trade talks looks rather slim.

Huawei’s founder Ren Zhengfei once pointed out that although the iPhone is a US brand, nearly 80 percent of the parts and most of the production processes are done in China. So shall we call the iPhone a US or Chinese product? It’s a question that's not easy to answer.

Ren’s remarks remind us that the economies of the US and China are already too intertwined to break up.

Meanwhile, Sino-US relations saw an interesting U-turn on Tuesday. Trump said he had had a “very good” phone conversation with Chinese President Xi Jinping that day.

The two have agreed to hold talks at the G20 meeting to be held next week in Japan. Negotiators from both sides have quickly restarted talks.

This article appeared in the Hong Kong Economic Journal on June 20

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Economic Journal columnist