China has become a poison Apple for Corporate America
Beijing’s latest plans signal a shift toward ‘totalitarianism’ as tensions rise with Washington
Corporate America has a serious addiction. For decades it partied to the beat of “China’s century,” and the buzz of growing sales and profits. But now the music has stopped.
The world’s second-largest economy is mired in debt, plagued by soaring unemployment among the young and struggling to recover from two years of President Xi Jinping’s “zero-Covid” policy.
“Derisking,” or “decoupling lite,” by the United States, the European Union, and the alliance of democracies has only increased tension between Washington and Beijing in a new Cold War over technology.
Caught in the middle are American high-tech giants such as Apple, Tesla, Microsoft, and Intel.
“The big question facing the C-suite is how do they fit into the new Chinese economy, where geopolitics is front and center,” Abishur Prakash, the CEO of The Geopolitical Business, said as reported by Nikkei Asia in July.
With difficulty is the simple reply. Last week, Beijing reportedly announced plans to ban Apple iPhones for employees at Chinese government agencies, and state-run enterprises and organizations under “national security concerns.”
It came on the heels of a similar crackdown on Tesla’s electric vehicles last year.
It’s time to break the US monopoly in different [technology] fields
china daily
Information war:
- At least US$200 billion was wiped off Apple’s market valuation of around $2.78 trillion after the news broke.
- Apple generates about 20% of global sales in China while more than 95% of iPhones, AirPods, Macs, and iPads are made in the country.
- In 2017, it bowed to pressure from the ruling Communist Party to remove virtual private networks from its Chinese iOS store.
- VPNs are used to evade the government’s stifling Great Firewall of China and heavy-handed censorship.
Big picture: “The conversation about China in corporate boardrooms is inexorably shifted toward more caution,” Jude Blanchette, of the Center for Strategic and International Studies in Washington, told The New York Times last week.
Between the lines: “Beijing’s erratic and punitive regulatory behavior [is the main reason, as well as] its movement toward totalitarianism, [and a slowing economy,]” Blanchette, a China specialist, said.
Delve deeper: In response, Xi’s regime has blamed Washington for a series of sanctions on the country’s high-tech industry, such as a blanket ban on advanced chips or semiconductors.
What they are saying: “It’s time to break the US monopoly in different [technology] fields and end its global hegemony,” state-run China Daily said in an editorial last week.
China Factor comment: What is certain is that Beijing will continue to byte back and target the titans of American tech. Time to shake that addiction.