Apple CEO reportedly signed $275bn deal with China
Apple CEO Tim Cook secretly signed an agreement with Chinese officials worth over $275 billion in 2016, according to reports.
Tim Cook personally signed the five-year deal with the Chinese government during a series of visits to the country in 2016, according to the The Information, which has produced a report based on interviews and purported internal Apple documents.
Apple reportedly sought a closer alliance with the Chinese government after executives grew concerned about bad publicity in the country and the company’s poor relationship with officials, who believed the tech giant wasn’t contributing enough to the local economy.
Internal documents allegedly show that Cook personally lobbied officials in the country after threats were made against the App Store, iCloud, and Apple Pay.
Cook aimed to use a memorandum of understanding between Apple and the National Development and Reform Commission, a Chinese government agency, to formally agree to some concessions in return for regulatory exemptions.
Cook announced in May 2016 that Apple would invest $1 billion in Didi, the Chinese ride-hailing start-up, in an attempt to appease authorities, according to the report. Shortly after, Cook, Jeff Williams, Apple’s chief operating officer, and Lisa Jackson, government affairs head, met with government officials in Zhongnanhai, the Communist Party of China’s central headquarters.
The negotiations led to the signing of the agreement, halting a number of regulatory actions the company was facing and giving it access to the Chinese market, in return for business deals, significant investments, and worker training in China.
The deal included a pledge from the tech giant to use more components from Chinese suppliers, sign deals with Chinese software companies, collaborate with research in Chinese universities, directly invest in Chinese tech companies, and provide assistance to around a dozen Chinese government causes.
The agreement stipulates that if there were no objections from either side, it would automatically be extended for an additional year to May 2022.
Apple also agreed to invest billions of dollars more into China, focusing on research and development facilities, renewable energy projects, and new retail stores. Other internal documents reportedly show the pledged amount came to over $275 billion in spending over a five year period.
The Information also suggested that the tech giant is very reliant on Cook for international negotiations and speculated it could meet difficulties when it comes to government affairs once Cook stands down as CEO.
Ⓒ Future Publishing
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