To overcome regulatory obstacles.
In 2016, after China's new regulations threatened Apple's business, Apple CEO Tim Cook met with Chinese officials. A report by The Information stated that Cook signed an estimated $275 billion agreement with officials to fund projects in China.
According to reports, in 2016, Chinese regulation severely threatened Apple's services, including App Store, iCloud, iTunes, and Apple Pay. Cook visited China many times that year to appease Chinese officials who accused Apple of not doing enough there. economy. According to reports, Apple’s government affairs team drafted a memorandum of understanding (MoU) with China’s National Development and Reform Commission, which was signed during Cook’s first visit that year.
Apple’s commitments in this transaction include helping Chinese manufacturers build state-of-the-art manufacturing facilities and training their workers. Apple also agreed to invest billions of dollars more in China than it was then, while also buying more parts for Apple devices from Chinese manufacturers. According to reports, in addition to building new retail stores, Apple also promised to invest in research and development centers.
This transaction is to allow China's IT industry to develop, promote China's science and technology education, and help Chinese companies grow together with Apple. The report stated that in return, the government will provide "necessary support and assistance."
According to "Business Insider" reports, Apple seems to have stopped bargaining. Since 2016, the company has transferred its iCloud business to China, opened 11 new retail stores in China, launched a $300 million clean energy investment fund, and reached an agreement with China's largest wind turbine manufacturer. For the latest iPhone, it also cooperates with a new Chinese supplier.
In addition to the financial agreement, Apple also met China's requirements to make the Diaoyu Islands or Senkaku Islands, the uninhabited but disputed land between China and Japan, appear larger on its Apple map. According to The Information, this is to replace the regulatory agency's approval to sell Apple Watch in the country.
Financially, this transaction is beneficial to Apple, which earned US$68 billion in revenue from the Chinese market last year. The Information added that this accounts for one-fifth of Apple's revenue.
Interesting Project has contacted Apple and will update the story when comments are received.
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