Why Apple closed a secret US$275b deal with Chinese government – Victor Shih

 

Victor Shih

Apple’s current successful position in the China market did not come for free, disclosed the AppleInsider this week, but was triggered off by a US$ 275 billion deal between the company and the central government in 2016. Political analyst Victor Shih explains how CEO Cook dealt with governmental concerns about the US firm.

AppleInsider:

Over multiple visits, Cook is said to have lobbied officials on behalf of Apple, as well as signing the deal with a Chinese government agency. The lobbying against various threats hat would’ve affected the App Store, Apple Pay, and other products was mostly successful, if unreported at the time.

The deal was kept secret both by the company’s own culture and by the opaque workings of the Chinese government, and was politically wise according to political economist Victor Shih. It is thought that as Apple has to appease China as both a major market and a manufacturing base, it had to keep the government happy while also not appearing to other countries as appeasing China.

“Apple likely wanted to avoid the optics of groveling to the Chinese government,” said Shih.

The key deal was a 1,250-word agreement created by Apple’s government affairs, which it thought could improve its relations with the government and potentially let Apple get the ear of senior leaders. The memorandum of understanding with the National Development and Reform Commission was signed shortly after Cook announced a $1 billion investment in Didi Chuxing in May (2016).

More in the AppleInsider.

Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

Are you looking for more strategic experts at the China Speakers Bureau? Do check out this list.

 

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How Apple suffers from China's downturn - Shaun Rein

Shaun Rein

Apple was already losing ground to domestic mobile phone makers, but the economic downturn and patriotism towards Huawei will make the US giant even more vulnerable, says business analyst Shaun Rein, author of The War for China's Wallet: Profiting from the New World Order to the BBC.

BBC:

In the view of Shanghai-based Shaun Rein, Tim Cook is right to blame China. The founder of the China Market Research Group tells us he is very worried about the state of the Chinese economy: "It's the absolute worst I've seen in the 20 years I've been in China. Everything has really stalled in the last quarter." 

And he says that fall in consumer confidence, coupled with the growing trade war with the United States, has made people more nationalistic about the phones they buy. 

"There's a lot of pride in buying Chinese products made by Chinese for Chinese. After the United States got Canada to arrest the CFO of Huawei that caused a lot of Chinese to be angry. And so a lot of Chinese consumers in a show of patriotism are saying let's not buy Apple let's buy Huawei and show support for the Chinese state." 

Even if those trade tensions ease, it is hard to see Chinese phone buyers turning back to Apple in large numbers now the spell has been broken.

More at the BBC. Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts on luxury goods at the China Speakers Bureau? Do check out this list.  

Apple is the new Blackberry in China - Shaun Rein

Shaun Rein

Apple's Tim Cook might have been visiting telecom giant China Mobile, but business analyst Shaun Rein explains in Bloomberg why a deal is very unlikely. "Apple might become the Blackberry of China." 

Apple needs telecom giant China Mobile more than China Mobile needs Apple, according to Shaun Rein. China Mobile is in the driver's seat and that does not fit the current business model of Apple. 

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.  

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