Wednesday, December 8th, 2021
275 billion for China
Insider: Apple benefits from secret deal with Beijing
In the past few years, Apple was one of the few US companies in China to be able to operate relatively freely. There is apparently a reason for this: According to an insider report, CEO Tim Cook made concessions of billions for the Chinese government five years ago.
Apple boss Tim Cook is said to have researched the investigative portal The information Years ago, he entered into a billion-dollar deal with the Chinese government to obtain exemptions from the country’s strict regulatory measures. In a contract signed in 2016, the Californians are said to have committed to investing 275 billion US dollars over five years in China.
According to the information in the report, which has been kept secret for years, Cook is said to have made the agreement personally during a visit to China. The source relies on interviews and internal Apple documents. The Chinese government was said to have criticized Apple for not doing enough to boost the Chinese economy. The pressure in China is said to have been so great that Tim Cook was personally forced to lobby.
The billions from Apple are said to have flowed into the construction of new sales outlets, research and development centers and projects for renewable energies in the years thereafter. In addition, according to the source, the tech giant pledged to use more components from Chinese suppliers in its devices, to work with Chinese universities on technology, or to invest directly in Chinese tech companies.
The effort was worthwhile
Years later, the contract explains why Apple was one of the few US companies to operate relatively freely in China. The Apple App Store and Apple Pay have largely been spared regulatory measures and restrictions in the past.
It is true that 275 billion US dollars are a gigantic sum. For Apple, however, it is comparatively easy to cope with the rapid demand in China. The financial commitment has definitely paid off for the group: In the past fourth quarter, Apple had sales of 83.4 billion dollars, an increase of 30 percent over the previous year. As of today, this means that Apple “only” had to “sacrifice” a little more than the China sales from three quarters in order to benefit from preferential treatment.
According to the information, the contract will run until May 2021. If both parties have no objections, it will automatically be extended for another year until mid-2022. Apple has not yet issued a comment on the report.