Apple CEO Tim Cook reportedly signed a major deal with Chinese communist regime officials in 2016, through which the company made several concessions in addition to paying $275 billion in exchange for obtaining certain key legal exemptions that allowed it to pave the way for success in the Asian country.
The controversial deal came to light recently following a report published by digital media magazine The Information.
While the Chinese regime was deepening its regulatory crackdown on companies in the technology sector, Tim Cook was reportedly the one who conducted the negotiations with officials. In 2016, he agreed to pay 275 billion dollars and other concessions such as the investment of millions of dollars in the country both in infrastructure and in training and research new technologies in universities and local companies.
In return, Apple would have the way paved to develop its business with greater freedoms.
As a person familiar with the deal reported to The Information, before signing the agreement, Apple’s government affairs team in China created a memorandum of guidelines with the country’s National Development and Reform Commission to sweeten relations with the communist leadership.
The agreement ultimately included commitments from Apple to help Chinese manufacturers build “the most advanced manufacturing technologies” and also train workers.
Other issues also included a promise to tap Chinese suppliers for more parts for Apple devices, strike deals with local software companies, work with Chinese universities on technology and invest “many billions of dollars more” than Apple was already investing in China.
It also agreed to develop new retail stores throughout the country.
In coordination with the Chinese regime’s 13th five-year plan, which, among other issues, prioritizes the development of technologies, Apple pledged to “grow together with Chinese companies to achieve mutual benefits and a win-win situation,” help develop China’s technology industries, and promote science, education and environmental protection.
In return for all this, the regime pledged “necessary support and assistance” for the firm’s development in the local market.
The agreement’s effects were fruitful, at least indeed for Apple, which has seen its business grow exponentially over the last few years in China. In the last year alone, the firm recorded a record $68 billion in revenues from China.
For its part, Apple also seems to have made its contribution as agreed. As Business Insider reported, the tech giant announced a deal with China’s largest wind turbine manufacturer, Xinjiang Goldwind Science and Technology, in 2016, made plans to move iCloud operations to China in 2017, launched a $300 million investment fund for clean energy in China in 2018, opened at least 11 retail stores in mainland China, and brought Chinese manufacturer Luxshare Precision Industry into its iPhone 13 production.