Is Apple The Last American Tech Company In China?

Published on 14 Mar 2022

Once upon a time, all of the major American internet companies were operating in China, including Facebook. As of today, Apple's massive presence in the nation is becoming even more obvious. On the other hand, it was stated last week that Microsoft, which is still active in China, would close LinkedIn there.

The firm cited the difficulty of complying with the Chinese government as the reason for its decision to discontinue operations. Apple is also subject to government censorship in this nation. Last week, the BBC reported that Apple has banned two popular religious applications from its App Store.

As a result, the Audible service operated by Amazon and the Yahoo Finance app were both pulled down. There has been an uptick in applications being pulled from the App Store, according to a monitoring organization called Apple Censorship.

See also: What's happening with the internet?

The Impact of China's Regulation In The Tech Industry

Beijing's closed-door politics are notoriously difficult to decipher. It's evident that Apple and Microsoft are caught in the middle of a conflict between the Chinese government and the country's IT sector.

Tencent, Alibaba, and Huawei are some of China's biggest worldwide IT businesses. However, the Chinese government has become more concerned about the extent to which it wields authority.

An inquiry determined that Alibaba had abused its market dominance and accepted a record $2.8bn (£2bn) penalty in April. Earlier this year, the Chinese government revealed a five-year plan to regulate the country's computer industry more strictly. It has further been clamping down on Bitcoin. The "great tech crackdown" hasn't spared American firms.

"Surely, Apple and Microsoft are keenly mindful that their situation is less reliable than in previous years, as seen by the crackdown. They are aware that they should proceed with caution, "The Great Firewall of China" author James Griffiths states as much.

The Personal Information Protection Legislation (PIPL), which is set to take effect on November 1st, seems to have been the last straw for Microsoft. This new law would have obliged Microsoft to adhere to even more regulations.

In a statement justifying its decision to remove LinkedIn, Microsoft mentions that it is "facing a substantially more demanding operating environment and increased regulatory requirements in China."

"I believe they felt it simply wasn't worth it," said Graham Webster, editor-in-chief of the DigiChina Initiative at Stanford University. Mr. Webster attributes his resignation from LinkedIn to the PIPL's impending enforcement.

The Presence of Apple In China 

Apple, on the other hand, places a different emphasis on the Chinese market than does Microsoft. Like no other US IT corporation, it has a significant presence in the nation. Apple earned an astounding $15 billion in China and Taiwan during the most recent quarter.

Additionally, Chinese manufacturers are a critical link in the worldwide supply chain for this company. Apple is well aware that, in order to do business in China, it must adhere to the country's policies, which may include censorship.

In China, you may wonder: why can't Apple simply sell hardware and not bother with the App Store?

This is because Apple sees the App Store and the iPhone as inseparable components. This is because Apple does not want to create a precedent for users to be able to download software from outside the App Store on their iPhones.

To begin with, the financial rewards would be significantly diminished. As a result, if Apple wants to sell items in China, the App Store must remain functioning. According to Mr. Webster, Apple has been "removing applications and effectively regulating the App Store for years."


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Featured image: Business photo created by tirachardz -