It's time Apple says no to China, even if it means more expensive iPhones

Tim Cook
Tim Cook (Image credit: Apple)

Dealing with China has never been easy as a nation or company. In the case of Apple, it has mainly meant ignoring the communist nation's human rights abuses. In exchange, the company has been able to tap into a cheap labor force and gain access to what will soon become the world's largest consumer market.

Apple's entrenchment in the world's most populated nation has long been well documented. However, relations between Apple and China's leaders might have been much chummier in recent years than ever imagined.

On Tuesday, the web site The Information reported that Apple CEO Tim Cook signed a secret agreement with China in 2016. The five-year deal, not yet confirmed by either side, was worth an estimated $275 billion and called on the company to invest heavily in the nation. By doing so, the Chinese agreed to squash regulatory actions that were threatening the iPhone maker at the time.

This agreement, perhaps extended one year until April 2022, has required Apple to "strictly abide by Chinese laws and regulations." In turn, Apple agreed to repeat this language whenever forced to respond to criticism over Chinese censorship and privacy.

For its part, China only promised to provide Apple with "necessary support and assistance."

Non-binding agreements between the Chinese government and large multinational companies happen often. What made this one strange is how long the details were kept a secret and why this secrecy was perhaps cemented in the first place.

From the beginning, not everyone in Apple's camp was thrilled by the increasing closeness between the company and Chinese officials. In an example, internal documents discovered by The Information show that some Apple executives forced Cupertino to pull out of China's state-sponsored World Internet Conference. The company's China team had accepted a personal invitation from the Cyberspace Administration of China chief to showcase Siri, Apple's voice-activated assistant.

As the report explains, "The documents didn't elaborate on the concern, but critics have said one of the event's goals is to legitimize China's vision of a tightly controlled and censored internet. Apple's China team felt pressure to salvage the relationship with the CAC, which had become the country's most powerful technology regulator under Chinese President Xi Jinping, according to the document."

Iphone Factory China (Image credit: Apple)

Undoubtedly, not disclosing the agreement in 2016 was an easy way for Apple to avoid whatever public criticism that would have ensued. And yet, with relations between China and the U.S. government increasingly frayed as 2021 ends, having this information disclosed now could prove even more problematic.

Large parts of the world's population now blame China for the ongoing pandemic. At the same time, nations are becoming increasingly more vocal about China's alleged human rights abuses within its Uyghur Muslim population. This week, for example, word leaked that the U.S. Biden administration will diplomatically boycott the upcoming Winter Olympic Games in Beijing. For this, China promises "firm countermeasures."

Cook and Apple have no choice but to comment on today's report. Transparency isn't just crucial for Apple stockholders and customers but to the general public at large. Looking more long-term, Apple needs to take a hard look at where manufacturing for its products is done and make changes. No, this doesn't mean pulling out of China altogether. However, it does mean moving more of its production to other locations worldwide.

These types of moves could cause increased prices for Apple products. Higher prices aren't necessarily bad, especially if the public understands why this might happen. It could also force China to rethink how it deals with its minority populations.

Bryan M Wolfe
Staff Writer

Bryan M. Wolfe has written about technology for over a decade on various websites, including TechRadar, AppAdvice, and many more. Before this, he worked in the technology field across different industries, including healthcare and education. He’s currently iMore’s lead on all things Mac and macOS, although he also loves covering iPhone, iPad, and Apple Watch. Bryan enjoys watching his favorite sports teams, traveling, and driving around his teenage daughter to her latest stage show, audition, or school event in his spare time. He also keeps busy walking his black and white cocker spaniel, Izzy, and trying new coffees and liquid grapes.

  • I wonder how many Apple fanboys are going to outright boycott Apple products due to this info? I know, a big fat ZERO! You know why? Cause the general population just don’t care. That would include bloggers at iMore, CultofMac, 9to5Mac, Macworld, MacRumors and AppleInsiders. The only thing that matters is the shiney new iPhone.
  • Why stop there? Why not also include anyone with an Xbox, Playstation or Android phones? You know: products also manufactured in China for US companies that also do business with Beijing, no matter what their respective deals look like. Unless of course, the bloggers at PCWorld, The Verge, or any Windows/Android-centric blog sites are somehow beyond criticism.
  • Although I think all companies and governments should cut times with China as long as the CCP is in power, there is a difference between having products manufactured in China and exported and companies that are selling products and services in China and accepting censorship and tracking, etc. on the Chinese people. Google, Microsoft, etc. would fall under this is they are altering their services to restrict freedom of information.
  • I wonder how many Andro fan boys who hang out in Apple product sites spending their time trying to denigrate Apple product fans in between hysterics about ‘everything Apple bad’ will eventually move on to trying to convince people to hate something else simply because you hate it? I’m sure that won’t stop you, however, it also won’t stop you from typing away on your Chinese parts filled electronic devices or the clothes you wear or the implements found in your house (this is the part where you hysterically demand that you own nothing made in or contain parts from China).
  • What Apple did in general terms is is exactly how business has been done I China since it opened up under Republican POTUS Nixon. Can't do the business you want to do without doing the business China wants you to do. Hotel Company wants to build one in Beijing, the price is to build them in a couple o other cities as well. Want to build cars in China? Give them the IP necessary to build them themselves. And so on and so forth.
    As the cliche goes, the devil's in the details. I'm unclear on the details but they don't seem especially horrible [*koff!*] BTW, in the PRC, first graders are taught programming; ours, I presume (or hope?) get shooter drills.
  • They don’t even teach programming in high schools here. In my small town, my kid’s class was cancelled because no one enrolled this year. Wonder why nothing is made in the US.
  • Ah, Nixon, that "Republican" POTUS, just opened US/China dialog, not normalization of trade. It was Jimmy Carter, that "Democrat" that normalized relations and accepted the "One China Policy" ******** over Taiwan. Then Bill Clinton, another "Democrat" that gave China "most favorable trade partner" status. It was the Republican POTUS, Trump (whom I actually consider a Independent just running on the Repub ticket), that held China's feet to the fire, one of the few Western leaders to stand up to the CCP's garbage trade practices, speaking truth about China. And the CCP hated that Trump was trying to bring peace in the Korea pen. and normalize diplomatic relations with N.Korea because the CCP uses NK for their own international manipulations. But, frankly, this is not a dem/repub issue as both sides have pussyfooted around with the CCP. But you highlighting Nixon and him being a Repub is just BS.
  • Saw a report the other day that Chinese President Xi Jinping isn't especially fond of how capitalistic Chinese commerce has become. He does have the power to unilaterally change that. Wonder how this might affect foreign (American) business there.
  • Like the NBA, Apple has sold its soul to the Chinese Communist Party for access to the China market. The stunning thing is Apple has always presented itself as really ethical and better than that, and that's why Apple's deal with the CCP was secret. Cook has always been a hypocrite, but he's sunk to Nike's level now. I own an iPhone, iPad and AirPods, but I'll be thinking long and hard about delaying any subsequent purchase while Cook runs the joint.
  • Chances you own or would buy Apple were already very unlikely based upon my experience with like internet posters on Apple product sites.
    You are almost certainly the worst of the hypocrites. The western world is filled with the simple implement to the raw materials to the pharmaceuticals to the complex electronic device made in China or parts inside made from China. It’s virtually impossible you aren’t another example of it as many hundreds of millions are. So by your own words you’ve sold your soul for it. And while standing in your glass house you cast aspersions on those who do what you yourself are knee deep in. That is the worst of hypocrisy. Apple, among many other companies, invest in local countries they do business in, sometimes it’s a requirement. Recently it is France and Russia. It isn’t about utter purity of heart like your ahem purchase motivations, it is about cold hard business. Shockingly! Companies are about business. Apple has for years had huge manufacturing in China, the amount of money flowing into China was already in the many many billions annually, and it had and now has huge sales in China. To do both requires involvement with their government and local investment, full stop. That isn’t unique to China. But I look forward to hearing about you clearing out your China built and China parts inside devices from your house and life so you haven’t sold your soul - but you’ll obviously be starting with allll the Apple stuff you own.
  • I would agree with everything you said but, for some reason, people hold Apple on some pedestal and, IDK, have some sense of superiority or something over non-Apple product users. I use all thee products, Apple, MS, Google, etc. but I know who they are. I am de-Googlizing my life, getting off FB, etc. I am going to give Apple a chance and see where they go in the next few years but if I don't like it, I might move to a AOSP phone and devices. Somethings we just can't avoid but its an effort here and there.
  • I don’t know anyone who has an ugly demonstrable sense of superiority due to being an Apple product user. And the circle of friends I have many use Apple products. But let’s say you’re correct. I’ll see that and raise you double of obnoxious internet Anti Apple people who frequent every site that is Apple centric….typically loaded with insults to people who use Apple products. A site I used to go to, cultofmac, was constantly barraged with these people and that was years ago. Hold Apple to a high standard as you see fit. Arguably, though not certainly, Apple is the greatest large company in the history of the planet. So it may be an understandable higher standard. But on this comical (more comical than you realize) China story, 250B / 5 years = 50B. This year Apple had COB expenses of 270B. Significant amount of that cost would have been in China already. Otoh this year Chinese people will purchase more than 50B to 60B in products.
    Conclusion: China is making a deal to make sure local Chinese are the investment/job beneficiaries of this money Apple gets. This would be so very unlike….Apple now spending money in France because of the French government? Or Russia saying Apple must hire in Russia? Or Apple opening production in India because India makes it impossible to sell phones in India — this is done to get Indian jobs for workers. But this sort of deal making is not done in the U.S., right? (If it isn’t then we need different politicians).
  • "is the greatest large company in the history of the planet" Not sure of the matrix you are using to judge this. Profits and valuation? Sure. Impact on the world? IDK, might put Ford motor company ahead. Maybe going back to the East India Company, again, considering what "greatest" means. My apologies if my comment was deemed insulting to Apple users (of which I am one). More of a reflection of past marketing and people actually believing the marketing (which one should never do regardless of product). But its less about just selling products in China or even a country tying to get the best deal for their people, which is also fine. Its about doing things like censoring yourself about concentration camps, avoiding topics about human rights violations, etc. Apple is not just a producer of hardware, they curate a news service, are now a media company, a streaming service, etc. To do business in China you have to compromise your ethics and morals, you have to, you have no choice. That is what Cook is being criticized for.
  • It’s just business, …. the murda business.
  • “It’s just business….the media business” There I fixed it for ya. So Hey, how’s all your non Chinese products in your house, probably some materials of your house, the parts in your car, the clothes, the medicines you take, the electronics you typing away on, kitchen implements, etc etc etc working out? I know you’ve done due diligence and not purchased Chinese made or Chinese inside, you’d even gone without on some things as there’d be no non Chinese made/inside option, Obviously you have none otherwise you’d be in the business of….what’d you call it….supporting “murda”. But then again for those who rabidly hate Apple posting on Apple product centric sites, they are in the business of truth murda in the first place.
  • Well, how have you accomplished all your de-Chinese productization in YOUR life? What computer, phone, social media, car, etc. do you use? Me, I support politicians that want to isolate the CCP, want to move manufacturing out of China, if nothing else, for strategic reasons, etc. Its a world economy, even the company I work for sources some components they use to produce goods from China. It can't be avoided but you can decide not to buy a 100% made Chinese car, computer, phone, etc.
  • I haven’t de-China products in my life (it isn’t possible) and it’s odd you’d ask that given my posts. I don’t subscribe to what I consider to be the laughable hypocrisy of convenient anti China stances. But since you opened it up, here’s other news for you: For many years now the western world (and much of the world) has been consuming products of significantly cheaper cost made by Chinese workers that were sometimes working in appalling conditions. Wow what good times, right? But now you/some are outraged they aren’t good people like us? Maybe go ask numerous other peoples of the world where we (via our government and industry) have left indelibly on them how “good” we are? There will be no isolating from China, full stop. We may be the good, and of course the good always love it cheap and plentiful, but our system is now not just hugely dependent on China production it is interdependent. That can’t be shut off without major turmoil that would especially hit our poorest (don’t us good always care for the poorest/neediest?). Yet we here comically see a story on TV or big internet news (“we” the good get informed by TV so it must be true, the bad get lied to) allows us a moment of outrage in order to stand morally superior to shout “they are bad, we are good”. Afterwards we go to the store to buy cheap fresh vegetables though unable to morally afford the cost to know how we obtain them cheaply (has that story not made it to our true TV?). The Chinese standard of living is going up substantially. For however bad (actually or made up) they are, that’ll help them to fix their problems, as that is how it should be. It certainly isn’t ever going to be fixed by us buying cheap and plentiful goods from a new set of poorer foreign peoples. Side note - But business with China does not mean making trade or business deals at any cost. I disdain politicians in general but supporting ones that will stand firm on deals that have a benefit to us working people is something these otherwise useless politicians actually can do. And we should expect the Chinese will act/feel the same way in their own interests.
  • I am going to give the benefit of the doubt to past Western leaders in assume they really did believe that if they did business with China, that it would allow the Chinese people to escape poverty and with more individual wealth and consumerism would come more access to information and desire for freedom. This was literally the policies for many Western countries. Again, giving them the benefit of the doubt. Problem is, it didn't work out that way. For sure, a huge number of Chinese did leave object poverty but freedoms did not follow. The world body is like an oil tanker, it takes miles to turn it around. The Western world is starting to come to the reality that the CCP is never going to give up power and are, in fact, putting their boot to the neck of the Chinese people and are threatening the security of the region and world. The CCP does *NOT* act in the interest of its people, period. The CCP acts in the interest of the CCP. They are an evil government, bigoted, spiteful, cruel, and are full of sociopaths.
  • Nice to see this issue starting to get some publicity.