Apple’s Disgraceful Kowtowing To Chinese Communists Is Starting To Backfire

Not many US CEOs have shown such strong support towards the Chinese Communist Party (CCP) like Tim Cook, who serves as Apple's CEO. However, Cook's strategy of investing in China, which has even caused damage to his name and the company's reputation, was seriously affected when the government in Beijing prohibited government officials from using foreign-made smartphones, such as the iPhone.

Throughout many years, the CCP happily accepted Apple as they were able to provide essential technical knowledge, funding, and numerous job opportunities for China. Cook was given a warm welcome and was even invited to meet with the CCP's highest-ranking officials. He frequently attended conferences sponsored by the Chinese government, showering praise upon the capital city of Beijing.

It's obvious that Cook has made an effort to maintain positive relations with the CCP because China plays a crucial part in Apple's financial results. As per reports from Reuters, about $80 billion of Apple's yearly earnings comes from China, which contributes to almost 20 percent of its overall revenue. Furthermore, China is Apple's most significant manufacturing center, and as of 2019, almost half of their suppliers are located in the country.

The CEO of Apple, Tim Cook, has publicly advocated for his company to be seen as a responsible member of society that champions democracy and social justice. Notably, in 2016, Apple took legal action to resist the FBI's efforts to access the iPhone belonging to the San Bernardino shooter, Syed Farook. Cook was vocal in his opposition to the government's request, which he viewed as an infringement on customer privacy and a serious threat to their security. At one point, he even made it clear that he was prepared to step down from his position if Apple did not contest the FBI's demand.

After three years, Apple declined to assist the Trump administration's Department of Justice in unlocking two iPhones connected to a terrorist named Mohammed Saeed Alshamrani. The tech company had concerns about the request, which resembled a previous one. Alshamrani, linked to al-Qaeda, was involved in a shooting that claimed three lives and injured various individuals at a naval base located in Pensacola, Florida, in 2019.

Apple's Betrayal Of Principles In China

In China, Apple prioritized making money and gaining status over their stated values. They often complied with demands from the Chinese government, including the request for access to Apple user data in 2018. Rather than resisting or threatening to resign, Apple moved iCloud accounts registered in China to servers operated by Guizhou-Cloud Big Data (GCBD), which is owned by the government. Apple claimed this was necessary to follow China's cybersecurity laws, but many rights groups criticized the company for assisting an oppressive government in monitoring and silencing vocal critics.

In 2019, Apple attempted to please the CCP by eliminating a well-liked application used by Hong Kong protesters advocating for democracy. The app was meant to help them find police and rallies. After facing criticism from many corners, including letters written by Senator Ted Cruz from Texas and Representative Alexandria Ocasio-Cortez from New York, Apple finally reinstalled the app. Nevertheless, Apple has gotten rid of numerous other apps that came under scrutiny from the Chinese government and were labeled as illegal, such as virtual private networks (VPNs), which enable users to get around China's internet firewall.

In 2020, the Australian Strategic Policy Institute came out with a report stating that many Uyghur Muslims were being made to work laboriously by several of Apple's contractors, with O-Film being one of them. O-Film happened to be where Apple CEO, Tim Cook, had visited in 2017 and praised them for their fair treatment of employees. This discovery of Apple employing slave laborers in China came to light after Cook declared that his company would donate $100 million to fight for racial justice in the United States, not in China.

Apple is receiving a lot of backlash for being hypocritical with their "one company, two systems" approach. There are concerns that the company's heavy reliance on China's market and supply chains, combined with growing tensions between China and the United States, makes Apple's business model unsustainable and could ultimately harm their financials. Additionally, history has shown that the Chinese Communist Party (CCP) is not a trustworthy partner. While they can be very friendly and accommodating when they need something, such as technology or funds from companies like Apple, they are not afraid to use them as sacrificial pawns in order to advance their own geopolitical and economic goals.

Last year, there were protests at the biggest iPhone factory in the world, located in Zhengzhou, China. This was due to unhappiness with the Chinese government's strict rules for preventing Covid-19 spread and poor living conditions in the factory. Apple should have been worried about this situation. Unfortunately, the Chinese authorities sent police to stop the protesters. As a result, Apple ended up with a shortage of 6 million units of its best-selling iPhone 14 and 14 Plus. This happened right before the important holiday season, causing a massive delay in production.

China's strategy of having "zero Covid" negatively impacted Apple, and the decision to ban iPhones was a significant blow to the company. The Wall Street Journal reported that China has around 56 million individuals who are state employees, and they typically earn more than the national average salary by 8%. As Apple ships approximately 230 million iPhones across the world each year, losing 56 million potential customers is a considerable loss, particularly in a stagnant global smartphone market with limited growth potential.

The reason given by Beijing for banning iPhones was to improve cybersecurity and prevent important data from leaving China. However, it is interesting to note that the ban came around the same time Huawei, a Chinese telecom company, released a new phone with similar capabilities to 5G networks. Some experts predict that this ban, combined with Huawei's new release, could cause a loss of 10 million iPhone shipments for Apple by 2024. Perhaps the timing of the ban was strategic to assist Xi Jinping's vision of being self-sufficient in technical knowledge and to give support to Huawei, a Chinese company with ties to the military and government, over Apple.

According to a report by Reuters, Apple could lose $19 billion in revenue or $7 billion in profit due to Beijing's ban. This news didn't sit well with Apple investors, resulting in nearly a 7 percent drop in stock price within a span of two days, causing a loss of almost $194 million in market value. Now, it's time for Apple to face the consequences of its decision to appease the Chinese Communist Party (CCP). One must question whether their actions were worth it.

The shift in Apple's success in China serves as a serious caution to other American businesses that are continuing to invest in China without having a plan to separate. According to The Wall Street Journal, "not many companies are protected if Apple is vulnerable to China's countermeasures." With China's increasing oppression and worsening relationship with the United States, American companies should take action to prepare alternative options to China's supply chains and market.

Helen Raleigh is a successful American businesswoman, author, and public speaker. She writes for renowned publications like The Federalist, The Wall Street Journal, and Fox News. She has penned multiple books, such as "Confucius Never Said" and "Backlash: How Communist China's Aggression Has Backfired." Her latest edition of "The Broken Welcome Mat: America's UnAmerican Immigration Policy, and How We Should Fix It" is already making waves. For more updates, follow her on Parler and Twitter, where her handle is @HRaleighspeaks.