Apple’s current successful position in the China market did not come for free, disclosed the AppleInsider this week, but was triggered off by a US$ 275 billion deal between the company and the central government in 2016. Political analyst Victor Shih explains how CEO Cook dealt with governmental concerns about the US firm.
Over multiple visits, Cook is said to have lobbied officials on behalf of Apple, as well as signing the deal with a Chinese government agency. The lobbying against various threats hat would’ve affected the App Store, Apple Pay, and other products was mostly successful, if unreported at the time.
The deal was kept secret both by the company’s own culture and by the opaque workings of the Chinese government, and was politically wise according to political economist Victor Shih. It is thought that as Apple has to appease China as both a major market and a manufacturing base, it had to keep the government happy while also not appearing to other countries as appeasing China.
“Apple likely wanted to avoid the optics of groveling to the Chinese government,” said Shih.
The key deal was a 1,250-word agreement created by Apple’s government affairs, which it thought could improve its relations with the government and potentially let Apple get the ear of senior leaders. The memorandum of understanding with the National Development and Reform Commission was signed shortly after Cook announced a $1 billion investment in Didi Chuxing in May (2016).
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