We can grasp the dynamics of contemporary global capitalism through the prism of Foxconn. Nearly a million young Chinese workers assemble over 50 percent of all the electronics products consumed on the globe at 30 of its factories in China. In those massive production complexes armies of young men and women perform monotonous repetitive assembly tasks under quasi-military discipline 60 hours a week for minimal pay.
Foxconn, controlled by Taiwanese billionaire Terry Gou, is China’s largest exporter and 60th largest global corporation, with annual revenues of $79 billion (2010). Its largest corporate customer is Apple, whose iPhones and iPads it manufactures, but most other major global electronics companies also contract Foxconn for their final assembly tasks. Sophisticated components and parts are manufactured in Korea, Japan, Europe and the USA, shipped to China for final assembly, and then re-exported for sale to more affluent consumers in North America, Europe and Japan. About $5 of the cost of an iPhone or iPad pays the wages of the Chinese workers who assemble them, while another $5 goes to Foxconn executives and shareholders. The rest goes to the manufacturers of sophisticated components and to Apple’s gross profits, currently about 36 percent of gross revenues.
Foxconn is a linchpin of the most profitable sector of global capital. Although its own operating profit margins are razor-thin, shaved by the constant cost-squeezing of Apple and other corporate customers, Foxconn has made itself indispensable to global capital by fully utilizing its strategic position in China.
Foxconn first constructed two massive factory/dormitory complexes with half a million workers in China’s first export- processing “free trade” zone in Shenzhen. After living costs soared in Chinese coastal cities and a wave of despairing Foxconn workers hurled themselves from windows of its high-rise dormitories, Foxconn sought sites in interior Chinese cities, where workers living closer to their home villages could be paid lower wages than in Shenzhen. To help Foxconn cope with the breakneck pace demanded by Apple to supply its latest lines of iPhones and iPads, provincial political authorities scrambled to enlarge airports and roads, distribute tax breaks, and facilitate the construction of new factory/ housing complexes in Chengdu and Chongqing, Zhengzhou and Taiyuan. Local authorities help Foxconn recruit hundreds of thousands of new assembly workers, plus thousands of industrial engineers pouring out of vocational schools.
The most “flexible” workers employed by Foxconn are “student interns” between 16 and 18 years old (and occasionally as young as 14) supplied to Foxconn by vocational schools. Thousands of “student interns” are assigned to work long hours at various mind-numbing repetitive tasks at Foxconn factories regardless of their
major field of study. Those who try to escape these harsh conditions are warned that they will not receive their school diplomas if they leave. Although they receive a minimum wage (and no benefits at all since they are not covered by labor law), many student interns actually are forced to pay for the privilege of being exploited by paying tuition and placement fees to their schools.