Why is Apple doing so well in China? Why didn’t the government respond to the US restrictions on Huawei by restricting the activities of the world’s most valuable company? Behind everything may be a secret agreement between Apple and the Chinese government worth up to 275 billion US dollars.
Apple CEO Tim Cook met with Chinese officials in 2016 after new regulations in the country threatened Apple’s business. However, it was not stated that Cook signed an agreement with officials to finance projects in China worth an estimated $ 275 billion, he said The Information server message. This is around CZK 6.189 trillion. For idea, revenues of the state budget of the Czech Republic amounted to CZK 1.475 trillion in 2020.
Apple has avoided limiting services with massive investments
According to the report, Chinese laws in 2016 seriously endangered Apple’s services, including App Store, iCloudu, iTunes and Apple Pay. Cook made a series of visits to the country in the same year to settle relations with Chinese officials who accused Apple of not doing enough for the local economy. Apple’s government team reportedly drafted a memorandum of understanding with the National Development and Reform Commission in China, which was signed during Cook’s first visit in the same year.
Apple had to invest a lot of money to keep its services available in China. Source: Pixabay
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Among the commitments made by Apple in that it included, among other things, helping Chinese manufacturers build state-of-the-art production facilities and training their workers. Apple has also agreed to invest much more in China than before, while purchasing more components for Apple devices from Chinese manufacturers. In addition to building new retail stores, Apple reportedly said has also committed to investing in research and development centers, said The Information.
Information technology as a policy: China and US fight for dominance. China is developing its own operating system, the military does not want American Windows.
China is important to Apple
The agreement was to enable the development of China’s IT industry, support scientific and technical education in the country, and help Chinese companies grow with Apple. In return, the government would offer “necessary support and assistance“Says the report.
According to Business Insider, Apple appears to have complied with its part of the agreement. Since 2016, the company has moved its iCloud operations to China, opened 11 new retail stores in the country, established a $ 300 million clean energy investment fund and initiated an agreement with China’s largest wind turbine manufacturer. It has also engaged a new supplier from China for its latest iPhone.
Apple earned $ 68 billion in the Chinese market last year. This represents a fifth of the company’s revenue.
Apple doesn’t have a straight backbone either
In addition to the financial agreements, Apple has complied with China’s request that the larger Diaoyu Islands, or Senkaku, appear on its maps. These are uninhabited but controversial areas between China and Japan. When the user zooms out, the islands appear to be larger than they are. Thanks to this concession, Apple was able to sell Apple Watch in the country.
In many ways, it could be said that what China lost by restrictions on Huawei was largely offset by its investments by the American Apple.
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