Tim Cook, CEO of Apple, proposed and signed an agreement with the Chinese government to prevent his brand from suffering the consequences of new laws and regulations in the smartphone market, in exchange for large investments in the country.
The disclosure has been published by The Information, based on leaked internal Apple documents and testimonials, and reveals the extent to which the apple company wanted to avoid problems in one of its key markets. The 1,250-word agreement was signed in 2016, the result of Tim Cook’s work during a series of visits to the country during those months.
It all started when Apple executives showed their fear of retaliation from the Chinese government for what could be considered a “low contribution” to the local economy, which could have repercussions not only in bad publicity, but in concrete actions such as new laws against foreign manufacturers .
At a time when China was the priority market for Apple, Tim Cook personally contacted government officials to create a “memorandum of understanding”, an agreement that would mean that Apple could remain focused on expanding its market share in China without suffering. consequences.
In the text, Apple agrees to invest 275,000 million dollars in China, including investments in local manufacturers so that they could obtain “the most advanced technologies”; Apple would also have to train talents in the country to use such technologies. IPhones and other devices would have to use more components made by Chinese companies, and Apple would have to invest directly in them. Finally, Apple would also collaborate with Chinese universities, and assist the government in a dozen ’causes’.
In exchange, Chinese officials would shelve a series of market regulatory actions targeting the technology sector, in addition to implementing exceptions for Apple, including its full access to the market, one of the most controlled in the world. Exceptions that would be very advantageous compared to other brands outside of China.
The agreement has a duration of five years, and ends next May 2022; however, it will be automatically renewed if neither party objects. Although the agreement is secret, Apple publicly announced some of its consequences, such as an investment of 1,000 million dollars in the startup Didi Chuxing presented the same year 2016.
Apple has prioritized the Chinese market for years due to its great growth potential, making decisions that have earned it bad press in the West; for example, when in 2019 it expelled the HKMap app, which was being used in protests in Hong Kong, after an official publication of the Communist Party accused Apple of complicity.