Mark Zuckerberg points the finger at Beijing, but Meta fails to reduce its dependence on China.
Meta wants to focus much more on tech products, but its ambitions have encountered an important obstacle: China.
Meta is facing an important change, in an attempt to shift the accent of its business from social networks and services to a new frontier of products. Not only the metaverse, Zuckerberg’s long-term bet, but also and above all hardware products.
Meta has been working on augmented reality glasses for some time, while two years ago it presented a pair of smart glasses in collaboration with Ray-Ban. Then there are the Oculus VR headsets and, finally, we know that the company hasn’t given up on its ambitions to produce a smartwatch capable of stealing ground from the Apple Watch.
Meta wants to focus much more on tech products, but its ambitions have encountered an important obstacle: China .
Until a few years ago it would not have been a problem, but lately several large US tech companies, including Meta itself, have begun to distance themselves from Beijing in an attempt to restructure their respective supply chains by reducing their dependence on China.
China has shown increasingly aggressive positions towards Taiwan, a nation formally not recognized by Western governments but in fact allied with the United States and NATO countries. A military aggression on Taiwan by China would open up new uncertain scenarios with an effect, if possible, even more destabilizing than the invasion of Ukraine. Relations and commercial relations between China and the United States are entering a phase of profound tension and it is the general opinion that today China is too uncomfortable a partner to be able to continue doing business with it as in the past.
Meta’s attempts to move its supply chain out of China have all been unsuccessful
Meta has publicly begun to attack China, warning politics of its hold on the US economy. Mark Zuckerberg himself has publicly stated that China’s economic growth rests on the theft of American technology.
So how to combine these strong positions against China with the aim of producing increasingly large volumes of tech hardware? According to the Washington Post, Meta hoped it could move the bulk of its production from China to Taiwan and other Asian nations. However, the premises behind this project immediately proved to be rather naive.
For example, Meta would try to sell its future smartwatches as Made in Taiwan (and not in China), in an attempt to avoid an accusation of hypocrisy and obtain less onerous customs tariffs. However, the company has not managed to find a sufficient number of suppliers to be able to make the device appear as produced and assembled mainly in Taiwan and almost certainly when it comes out it will be produced in China (like all Oculus viewers).
The entire tech industry chain is still in China, which has an edge over the rest of the world created over several decades. The alternatives chosen by giants like Apple, including India , are still in an extremely embryonic stage: it will take many years before other countries – including those of Southeast Asia – can steal substantial market shares from China.
A few years ago Meta had also attempted to market the eyewear made together with Luxotica, the Ray-Ban Stories, as Made in Italy, but even on that occasion it had failed to find a way to meet the legal requirements to obtain the brand .
Attempts to move production of Oculus headsets out of China are proving equally unsuccessful. Meta, quite simply, is failing to find either component suppliers or possible assembly sites capable of providing a quality of service and production volumes comparable to those of its current Chinese partners.
In a statement sent to the Washington Post, Meta confirmed that its products are currently assembled in China, adding that the company is “continuously looking for opportunities to diversify its supply chain in the rest of the world”.
- Made-in-China labels become a problem for Meta’s anti-China stance (washingtonpost.com)