Party Lines and Bottom Lines

Martin Laflamme traces the history and future of globalization through three recent books on China’s techno-nationalism.

By Martin LaflammeSeptember 15, 2025

• Politics

• Economics and Finance

CHINA’S RULING ELITES have long had a complicated relationship with foreign technology. The most memorable illustration of this ambivalence was recorded by Lord Macartney, following his 1793 audience with Qing emperor Qianlong. The British envoy had traveled all the way from London—an exhausting nine-month journey—to establish trade and diplomatic relations with the Middle Kingdom. Alas, it was all in vain. In his written response to Britain’s demands, the sovereign declared: “[W]e possess all things. I set no value on objects strange or ingenious, and have no use for your country’s manufactures.”

Qianlong’s response was less an expression of civilizational superiority—though it has often been interpreted as such—than a recognition that the British posed a threat and should be kept at bay. It proved a prescient sentiment. In the First Opium War of 1839–42, the Royal Navy inflicted a humiliating defeat on Qianlong’s grandson, Emperor Daoguang. By then, it had become painfully clear that battening down the hatches was not an option, and that closer interaction with Britain, including of a commercial nature, was unavoidable. Thenceforth, the question for the Qing bureaucracy was no longer how far it should engage with the West, but how it could do so and learn from it without compromising its cultural essence. 

This was no easy task, and a furious debate ensued. One man who believed China could get the best of both worlds was Feng Guifen (1809–74), a senior mandarin with reformist ideas who hailed from a rich Suzhou family. Feng advocated strongly for adopting and learning to manufacture foreign military technology, but there was a caveat: China had to control the process. “[O]nly thus,” Feng insisted, “will we be able to pacify the empire; only thus can we play a leading role in the globe.”

When the time came to roll out the telegraph from the 1860s to the 1880s, the Qing authorities followed that advice. Initially, both “Chinese officials and lay people felt a deep distrust towards the new medium,” writes philosopher Anna Greenspan in China and the Wireless Undertow: Media as Wave Philosophy (2023), an erudite and often insightful study on the nation’s relationship with modern technology, though one that occasionally veers toward the esoteric in terms of topic and style. In some regions, she points out, government officials “provoked, used and manipulated” opposition, by putting up critical posters, for example, or organizing protests. In time, however, Beijing came to recognize the value of wire communications, prompting it to take control and quash resistance. By the end of the century, Qing government bodies and Chinese private enterprises operated 22,000 miles of telegraph lines.

We can still find evidence of these old dilemmas and views in the People’s Republic of China (PRC). As economic reforms accelerated in the late 1980s, cadres fretted about undue reliance on companies from abroad. In House of Huawei: The Secret History of China’s Most Powerful Company, a masterful new study of China’s first global tech behemoth, Washington Post reporter Eva Dou quotes Wu Jichuan, a former minister of posts and telecommunications who told Huawei founder Ren Zhengfei in 1993 that China should avoid depending on Western brands. “For some critical technologies, after we introduce, digest, and absorb them, we must Sinicize them with Chinese characteristics.” In other words, advanced systems were too sensitive to be entrusted to foreigners. Ren heard the message loud and clear.

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Ren Zhengfei was born in 1944 in Guizhou, then and now one of the country’s poorest provinces. By local standards, however, the household was comfortable. His father, the first in the family to attend university, “revered books, schooling, and the written word,” a passion he transmitted to his seven children.

Ren’s early adult years coincided with the onset of the Cultural Revolution (1966–76). For him, as for tens of millions of others, it was a bruising experience. His father was persecuted, and in Chongqing, where Ren was studying engineering, Red Guard factions violently clashed on a regular basis. “The Cultural Revolution was a disaster for the nation,” he later wrote. “But for us it was a baptism. It made me politically mature, so that I wasn’t just a simple bookworm.” It taught Ren his most important lesson: never underestimate the political risks of operating in China.

The Guizhou native made certain his employees at Huawei, which he founded in Shenzhen in 1987, understood this equally well. Upon joining the firm, recruits must swear an oath, which enjoins them “to better serve the motherland and the people.” Lest they forget, reminders are frequent too. In an internal letter distributed in 1998, for instance, Ren admonished that “in no time or place may [staff] do anything that disappoints the motherland or disappoints the nation.”

Early on, Ren aligned his company’s objectives with those of the Chinese Communist Party—it is no coincidence that the name of the company derives from “Zhōnghuá yǒuwéi,” a slogan that roughly translates as “China will prosper.” In an internal speech from 1995, he explained that boosting sales abroad would help accumulate foreign exchange, which in turn was necessary “to resolve Hong Kong’s return, and Taiwan’s unification.” Whether the Huawei founder is as patriotic as he sounds is difficult to say, but it hardly matters. Displays of loyalty are necessary to keep in the Party’s good graces. Ren knows that and he acts accordingly.

There is a dark side to that blind allegiance though. Hewing close to the CCP heightens the risk of being complicit in state repression. Dou uncovered a Huawei marketing deck from 2017 that boasts that the company’s AI solutions can pick out “sensitive political content” online, thereby assisting the authorities in their efforts to tighten already draconian censorship rules. Worse, the author writes, Huawei supported Beijing’s crackdown and coercive mass internment of the Uyghur minority in the Xinjiang Uygur Autonomous Region, in China’s far west, by helping to develop “the world’s most repressive high-tech surveillance state.”

Huawei has often touted its status as a private enterprise. One reason is to differentiate itself from ZTE, a state-owned rival, but the main purpose is to reassure foreign partners and investors. On paper, that is true. But in China, no one can do business without consideration for the Party, certainly not in areas deemed of strategic importance. Huawei might have a bit more room, but its leash is still short.

One way in which the CCP maintains oversight is through its network of Party branches. Huawei established its own in 1996, as required by law. The unit has real power: it can call on top executives to engage in self-criticism and, since 2007, it is able to veto executive appointments. By 2011, 30,000 of Huawei’s 140,000 employees were Party members, a figure that has continued to grow in subsequent years.

Huawei also appears to have links with China’s security services, though these are shady. Dou points out that Sun Yafang, Huawei’s chairwoman from 1999 to 2018, is widely believed to have worked for the Ministry of State Security (MSS) early in her career. After joining Ren’s firm, she was promoted at a suspiciously rapid clip, rising from sales manager in the fall of 1993 to vice chairwoman by the end of the following year. Was Huawei trying to ingratiate itself with the MSS, one of China’s most powerful agencies? It is difficult to say, but her rise aligned with Ren’s management philosophy: business works best when it coordinates with the state.

And yet, Huawei’s relationship with the Party has not always been smooth. In the early 2000s, the company got in serious trouble—allegedly for “illegal business practices.” The accusations were serious enough that 20 auditors descended upon the firm’s headquarters in Shenzhen. Ren was deeply affected, Dou writes, so much so that he briefly contemplated suicide.

This incident aside, the Party has been enormously supportive of Huawei. In 2005, China Development Bank forked out $10 billion to finance its expansion overseas. This was a massive sum that, at the time, amounted to twice the company’s annual revenue. When Safaricom, a Kenya telecom operator, walked away from a deal in 2007, after waiting for more than three years for a badly overextended Huawei to deliver on its commitment, Beijing stepped in and threatened to cut all foreign assistance to Nairobi. Under pressure from its own government, Safaricom blinked; the deal stood.

Huawei would not have survived in the no-holds-barred business environment of the early years of China’s reform era without sharp elbows. Ren regularly sent employees snooping on competitors and thought little of stealing their designs, a phenomenon “not uncommon during that Wild West era of lax to nonexistent intellectual-property protections in China,” Dou writes. When the time came to expand overseas, the company realized that competing head-on with established foreign brands would be a challenge, so it focused on neglected markets, including those of rogue regimes such as Iraq, Iran, North Korea, and Afghanistan. To hide its involvement, Huawei often worked through intermediaries. “These controversial contracts would serve as the engine for the company’s early global rise,” Dou observes. “But they would also put Huawei in Washington’s crosshairs.”

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Ren never harbored any illusion about who was boss. By comparison, few if any foreign entrepreneurs enter China with the same nous. As Patrick McGee makes abundantly clear in Apple in China: The Capture of the World’s Greatest Company, his eye-opening and disturbing new account of the corporation’s experience in the one-party state, Steve Jobs and Tim Cook were no different. In the first decade of this century, Apple grew heavily reliant on China, particularly for manufacturing. Most alarmingly, this happened unwittingly, without senior management paying attention to the commercial consequences, let alone the geopolitical implications, of the vast amount of valuable know-how they were transferring. It is a cautionary tale par excellence, one that Elon Musk’s Tesla is only now learning the hard way.

It all started with Steve Jobs’s obsession with quality control. For years, Apple’s visionary founder insisted that the company build what it designed—whatever the costs. It worked for some time, but by the late 1990s, that approach was no longer tenable. Financial pressures forced Apple to explore outsourcing partnerships, first in Japan and South Korea, but then, fatefully, in Taiwan.

Enter Terry Gou, the mercurial founder of Foxconn. The Taiwanese billionaire admired Jobs and was determined to become Apple’s most important supplier. To this end, he was ready to cut deals that earned him almost nothing. In 1999, when LG was under contract to manufacture the iMac, Gou offered to do the same job for $40 less per unit. Apple was skeptical, but the terms were enticing, so it said yes.

This was classic Gou: brash, gritty, ambitious. He was willing to go this far, McGee writes, because he understood something nobody else did: “[T]he value of working with Apple wasn’t the profits, it was the learning.” If Foxconn could meet Steve Jobs’s exacting standards, it could manufacture anything for anyone. A former Apple employee put it in more colorful terms: working with Apple “is really fucking hard,” but suppliers do it because they “learn so much.”

Gou was no pushover, however, and he squeezed Apple to the fullest. After the company finished training a group of engineers, the Foxconn magnate often reassigned them to more lucrative projects. He then brought in a fresh batch of people, leaving Apple with no choice but to train them.

The partnership was transformational for both sides. By the turn of the millennium, Apple products were still being assembled all over the world. A decade later, however, almost all production had shifted to China, much of it under Foxconn. During the same period, the Taiwanese company’s revenue grew nearly fiftyfold, from $1.8 billion to $98 billion.

Though Foxconn occupied a privileged position in Apple’s manufacturing ecosystem, it was not the company’s sole partner. As sales exploded in the 2000s—the iPod shipped just under a million units in 2003; two years later, that figure was 22.5 million—suppliers still in Taiwan struggled to keep up. They proposed to move production to the PRC, where authorities could be relied upon to recruit labor and secure vast tracts of land to build new factories. Seeing no alternative, Apple agreed. Other suppliers already in China then entered its supply chain. The trend further accelerated after Beijing joined the World Trade Organization in December 2001.

Chinese vendors—and Taiwanese ones before them—were woefully unprepared for Apple’s rigorous requirements. They had neither the skills nor the equipment to fulfill orders in the quantity and quality that Steve Jobs and his team expected, so Apple provided the gear and trained the staff.

This was a huge endeavor. Apple “purchased hundreds of millions of dollars of machinery, placed it in the factories of its supply partners, and ‘tagged’ it for Apple use only,” McGee explains. By 2012, the value of that equipment had ballooned to $16 billion. To train the workforce, Apple deployed its own engineers, embedding them in more than 1,600 factories. In fact, the Cupertino-based company was sending so many people, McGee writes, that around 2014, it petitioned United Airlines to open direct flights, three times per week, between San Francisco and Chengdu, promising to “buy enough of the thirty-six first-class seats to make it profitable.” Two years later, it asked for another such liaison, this time with Hangzhou, a tech hub. Prior to the COVID-19 pandemic, the company was booking 50 business-class seats to Shanghai every day.

Chinese manufacturers learned quickly. Soon, they began offering their new tech savvy to Apple competitors such as Huawei, Xiaomi, Oppo, and other local brands. Unsurprisingly, their domestic market share surged, from a meager 10 percent in 2009 to a whopping 74 percent five years later. Worse, they began poaching talent trained by Apple. Some even bought wholesale Taiwanese and American factories within the company’s supply chain. 

The result, McGee offers, is damning: Apple became “the biggest corporate supporter of Made in China 2025, Beijing’s ambitious, anti-Western plan to sever its reliance on foreign technology.” Although Cupertino belatedly realized it was in deep trouble, its efforts to pull back, in part by shifting manufacturing elsewhere, most notably to India, have so far had limited success.

The irony is hard to miss. Apple built its brand as a bold and creative outsider, a David ready to take on any Goliath, however powerful or authoritarian, a spirit that was on striking display in the company’s legendary Big Brother–smashing commercial released on New Year’s Eve, 1983. And yet, in China, Apple compromised its values numerous times to curry favor with its dictatorial regime. In 1998, it pulled the image of the Dalai Lama from the Asian rollout of its Think Different campaign. In 2016, it removed the New York Times app from its online store. A few months later, it culled 674 virtual private networks, applications that enable those inside China to jump the Great Firewall. During the White Paper protests against China’s COVID-19 lockdown policies in late 2022, Apple restricted access to AirDrop, which protesters had used to organize. The firm countered that it must abide by local laws wherever it operates. Fair enough, but in China, that’s a Faustian bargain.

Was this all inevitable? Doug Guthrie, a former dean of George Washington University School of Business and a China expert, was hired by Apple in 2014 to help the company navigate the country’s opaque politics. The truth, he told McGee, is that you can’t do business in the world’s second largest economy “without doing exactly what the Chinese government wants you to do. Period. No one is immune.”

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As Chinese intellectuals in the second half of the 19th century debated how to learn from the West without losing the essence of their traditions, they returned to ti-yong, a concept with deep roots in Chinese philosophy, which distinguishes between an object’s essence (ti) and its function or manifestation (yong). Many embraced this dichotomy as an organizing concept for policymaking—Greenspan also loosely organizes her book around it. To them, Greenspan writes, “ti was identified with the deep cultural past of indigenous traditions and yong was linked to the techno-scientific future affiliated with the West.” The best-known proponent of this approach was Zhang Zhidong (1837–1909), a scholar official who coined the phrase “Chinese learning for substance, Western learning for application.”

Today, the state is less concerned with protecting the country’s essence than Party rule. “The ongoing faith in the endurance of the ‘China model,’” Greenspan explains, “presumes a static and resilient substance [ti] that is able to shape and direct the uses of technology [yong] according to its will, while remaining cut off and immune from the inherent, accelerating, destabilising nature of the technological innovations themselves.”

This explains why the Party has guided and supported Huawei and why it has forced Apple and many other Western firms to conform to its requirements. No one is immune, indeed.