China wants its own Apple | The weekly recap

Beijing has a new economic priority – and it's one that will reshape China's growth model for decades to come.

Policymakers are increasingly convinced that the next phase of China's development requires a dramatic expansion of producer services – that is, the ecosystem of support that sits behind and around manufacturing.

• Think less call centres and coffee shops, more industrial design, patents, software, and finance.

This is a significant pivot. For much of the last decade, policymakers viewed services as a drag on productivity: It’s much easier to increase efficiency on a factory floor – through automation or machinery upgrades – than it is in, say, a hospital or school.

• This productivity concern led Beijing to shun its service industries and double down on manufacturing during the previous Five Year Plan (2021-2025).

So why the change of heart?

First, there's growth potential.

• China’s economy is slowing, and policymakers are desperate for new growth drivers.
• Producer services account for up to 30% of GDP in the US – China doesn’t provide a comparable figure, but the role of producer services is significantly less. 
• Beijing sees that gap not as a weakness, but as an opportunity – a massive, untapped source of growth.

Second, there's jobs potential. 

• Manufacturing employment has expanded in recent years , but China's manufacturing base is becoming increasingly automated, threatening to hollow out blue-collar employment faster than new jobs are created. 
• At the same time, a record number of university graduates are entering a job market that doesn't have enough white-collar positions to absorb them. 
• Producer services – think engineers, designers, software developers, and supply chain managers – are precisely the kind of high-skilled, high-paying jobs China needs more of.

Third, there's value potential. 

• Beijing doesn't just want China to make things – it wants China to own the value that wraps around them. 
• Think about Apple, which captures the lion's share of the value in every iPhone it sells not through assembly, but through design, software, and IP. Beijing wants Chinese companies to do the same. 
• Huawei – with its sprawling portfolio spanning smartphones, base stations, EVs, and robots – is the closest thing China has to that model today. But Huawei remains heavily focused on hardware and vertical integration. 

What Beijing is really after is companies that generate value primarily through services wrapped around manufacturing, not just sophisticated manufacturers with strong in-house R&D.

• In other words, China wants its own Apple.

The challenge is that Beijing's tried-and-tested playbook for building world-class industries – subsidies, cheap credit, support for exporters – won't work as well here. 

• Producer services thrive on deregulation, open competition, and deep pools of talent. Those are things China's policymakers have been trying to cultivate for years, with mixed results.

I discuss all of this in more detail in this week's Trivium China podcast – including what success might look like and how long it could take to get there. 

Subscribers to our Markets service can also read the full report. If you aren’t already a subscriber, you can sign up for a free 30-day trial here.

Dinny McMahon, Head of Markets Research, Trivium China

What you missed

US-China

On Tuesday, US Trade Representative Jamieson Greer offered some juicy tidbits on the development of the US-China Board of Trade.

• Greer said his office would issue a public call for comment on what Chinese goods should see tariff reductions, identifying areas where tariffs are hurting America Inc. the most.

Foreign affairs

A growing chorus of EU voices is backing tougher action on China.

• On May 22, French President Emmanuel Macron called for the EU to adopt anti-dumping and anti-monopoly measures to counter dependence on China.
• On May 24, Lithuania, France, Italy, the Netherlands, and Spain circulated a paper calling for tougher trade measures to combat “structural and industrial overcapacity.”

On Monday, Xi Jinping met with Pakistani Prime Minister Shehbaz Sharif in Beijing.

• Xi expressed appreciation to Sharif for “demonstrating a proactive spirit and mediating for peace to return to the Middle East.”

Econ and finance

On Thursday, the State Council released the 15th Five-Year Plan (FYP) for Urban Renewal – the first standalone national blueprint for the initiative.

• This points to potential policy tailwinds for construction activity and demand for building materials.

On May 22, the State Council issued guidelines to decouple access to basic public services from household registration (hukou).

• But the guidelines didn’t promise any new funding support, only saying authorities will “explore” allocating transfer payments based on factors including long-term resident populations.

Business environment

On May 23, Wingtech announced that a court in Guangdong Province has accepted its lawsuit against Nexperia BV.

• Wingtech is suing under Article 12 of the Anti-Foreign Sanctions Law (AFSL), which lets Chinese persons and entities sue anyone “executing or assisting” foreign discriminatory measures against them.
• This case represents an important test case for how legal authorities will interpret the AFSL.

Tech

On Monday, at IEEE ISCAS 2026 in Shanghai, Huawei semiconductor unit president He Tingbo introduced a chip architecture called LogicFolding.

• Instead of shrinking transistors with tools it can’t buy, Huawei is stacking active silicon layers vertically and connecting them through advanced packaging techniques. 
• This may help explain why Beijing has recently appeared more confident about domestic semiconductor progress – and more willing to reject imports of Nvidia H200 GPUs.

The European Commission has fined Temu EUR 200 million for failing to stop sales of unsafe baby toys and chargers on its platform.

• Temu now has two months to submit a remediation plan to Brussels or face additional penalties.

On May 22, a standards committee backed by the Ministry of Industry and Information Technology (MIIT) launched a full-lifecycle management platform for humanoid robots.

• Starting now, every humanoid robot in China will be assigned a unique 29-character ID code via the platform.
• If this sticks, robot IDs could become the registry layer for future certification, insurance, export, and public-space deployment rules.

Politics

On Tuesday, the Taiwan Affairs Office (TAO) updated its website to reveal a new org structure.

• The restructuring created one entirely new unit – Bureau 11 – focused on attracting Taiwan talent to study, work, and start businesses on the mainland.

As always, it was a busy week in China.

• Thank goodness Trivium China is here to make sure you don’t miss any of the developments that matter.