Apple CEO Tim Cook 'Secretly' Signed $275 Billion Deal With China in 2016
In an extensive paywalled report based on interviews and
purported internal Apple documents, The Information revealed that Tim Cook
personally forged a five-year agreement with the Chinese government during a
series of in-person visits to the country in 2016. The need to push for a closer
alliance with the Chinese government reportedly came from a number of Apple
executives who were concerned about bad publicity in China and the company's
poor relationship with Chinese officials, who believed that Apple was not
contributing enough to the local economy.
Alleged internal documents show that Cook "personally
lobbied officials" in China over threats made against Apple Pay, iCloud,
and the App Store. Cook set out to use a "memorandum of
understanding" between Apple and a powerful Chinese government agency
called the National Development and Reform Commission to formally agree to a
number of concessions in return for regulatory exemptions. The 1,250-word
agreement was written by Apple's government affairs team in China and stewarded
by Cook as he met with Chinese officials.
In May 2016, Cook announced that Apple would be investing $1
billion in the Chinese ride-hailing startup Didi Chuxing in a pointed attempt
to mollify authorities, the report added. Shortly after, Cook, Apple Chief
Operating Officer Jeff Williams, and government affairs head Lisa Jackson met
with senior government officials in Zhongnanhai, the central headquarters of
the Communist Party of China.
Cook's negotiations led to the successful signing of the
multibillion-dollar agreement, quashing a number of regulatory actions against
the company with exemptions and enabling access to the Chinese market, in
return for significant investments, business deals, and worker training in the
country.
The agreement included a pledge from Apple to help Chinese
manufacturers develop "the most advanced manufacturing technologies,"
"support the training of high-quality Chinese talents," use more
components from Chinese suppliers, sign deals with Chinese software firms,
collaborate with research in Chinese universities, and directly invest in
Chinese tech companies, as well as assistance with around a dozen Chinese
government causes. If there were no objections from either side, the deal would
be automatically be extended for an additional year until May 2022, according
to the agreement.
Apple vowed to invest "many billions of dollars
more" than its current expenditure in China, including on new retail
stores, research and development facilities, and renewable energy projects.
Other internal documents reportedly showed that Apple's pledge amounted to more
than $275 billion in spending over a period of five years.
The Information suggests that Apple is heavily reliant on
Cook for international negotiations and speculates that it could face
difficulties dealing with government affairs when Cook stands down as the
company's CEO.
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