That's not how indemnity works. If Apple sells a Macbook with a flawed battery that explodes in consumers' laps, the plaintiffs will sue _Apple_ and not the outsourced Chinese battery factory. Just because the Chinese company agrees to an indemnity clause, it doesn't prevent lawyers for the plaintiffs to name Apple as the defendant on the lawsuit.

Indemnity is about monetary compensation from the other party and not some type of shield against lawsuits. That means that Chinese company compensates Apple's cost of lawyers and losses to pay judgments and settlements. To grandparent poster's point, if Chinese battery company goes out of business, the indemnity clause means nothing since Apple was unable to receive reimbursement from that manufacturer.