Apple Reached $275 Billion Deal to Develop China’s Economy and Technology

( This week, Information published a lengthy report detailing Apple CEO Tim Cook’s secret deal with China to establish strong relationships between Apple and the Chinese Communist Party.

The report, citing both interviews and internal Apple documents, reveals Cook’s repeated visits to China in the mid-2010s which resulted in a $275 billion deal between Apple and Beijing committing Apple to invest heavily in technology infrastructure and training in China.

The 5-year, non-binding deal inked by Cook during a visit in 2016 was made in part to mitigate or prevent regulatory actions against Apple by the Chinese government that would have had a significant negative impact on Apple’s operations within mainland China.

In the deal, Apple pledged to help Chinese manufacturers develop “advanced manufacturing technologies” and provide training for “high-quality Chinese talents.” Apple promised to use Chinese-manufactured components in its devices, sign deals with Chinese software firms, and collaborate with Chinese universities on technology.

Apple’s current product supply chain is heavily rooted in China thanks in large part to Tim Cook’s deal.

Apple also agreed to directly invest in Chinese tech companies – pledging to spend billions more than the company was already spending in China every year.

According to Information, Apple has mostly honored its part of the agreement, and as a result, the company has benefited enormously. The report outlines cases when Apple successfully circumvented limitations China normally imposes on foreign companies.

For example, Apple maintains control of encryption keys for iCloud user data for the region, despite Beijing’s efforts to force foreign companies to surrender control of that data to Chinese companies. At the same time, Apple has agreed to adhere to Chinese regulations and policies as part of the deal. And Apple often complies with requests to delist apps or content that run counter to the state’s priorities and goals.

As a result of Cook’s lobbying and deal-making, Apple has performed better in Chinese markets than any other comparable American tech company. According to Information, Cook was so instrumental in gaining Apple an advantage in China, some members of Apple’s leadership fear what would happen to the company’s future should Tim Cook step down.

Currently, China accounts for 19 percent of Apple’s total sales. That’s four points higher than last year. The report in Information cites data from Counterpoint Research that shows Apple has recently emerged as China’s largest smartphone brand.