An unknown agreement between Apple and the Chinese authorities in 2016 was revealed by The Information. With a $ 275 billion five-year contract between the technology giant and a Chinese government agency, CEO Tim Cook aimed to avoid regulatory obstacles to the company’s operations in the country. The agreement includes cooperation with local businesses and direct investment in Chinese companies, as well as a partnership in science and technology, the publication said, citing interviews and company documents.
In 2016, Apple’s sales in China fell by 17% after the company fell under the target of Chinese regulators. According to The Information, services such as the App Store, Apple Pay and iCloud have been jeopardized. Cook then began lobbying Chinese government officials, and during one of his visits to the country, an agreement was reached with the National Development and Reform Commission, which secured Apple the favor of the authorities.
Investments in exchange for peace of mind
The company has agreed to use more components from Chinese manufacturers, to collaborate with local software companies and universities, and to make direct investments in technology businesses in the country. Apple has also pledged to help develop China’s IT industry, promote science, technology, education and the environment. In return, the Chinese side offered to provide “the necessary support and assistance” for the company. The transfer of technology against market access is causing sharp diplomatic frictions between China and its trading partners, but many companies accept it as a condition for doing business.
In addition to the deal in question, Apple has made other compromises with the Chinese authorities in order to ease the conditions for its business, writes The Insider. A Chinese government agency has asked Apple Maps to make the Diaoyu and Senkaku islands look big on the map even while reducing the overall scale. Otherwise, regulators would not approve the Apple Watch, according to quoted internal documents. In the end, the company complied.
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