Apple Unlikely to Face Backlash From China Over New U.S. Rule Targeting Huawei

Last week, the U.S. government announced export restrictions designed to cut off Chinese telecom-equipment maker Huawei from overseas suppliers, threatening to ignite a new round of US-China economic tensions. However, Apple is unlikely to face backlash from the Chinese government over the new rule, CNBC is reporting.

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According to the state-backed Global Times citing a “source close to the Chinese government,” China is ready to take “countermeasures” against the U.S. and could be imposing restrictions on or launch investigations into U.S. companies like Qualcomm, Cisco and Apple according to Chinese cybersecurity laws and regulations.

But since Apple maintains a good relationship with China via its manufacturing partners and employs hundreds of thousands of workers in the country, experts believe it might prevent the Chinese government from taking action against the iPhone maker. 

“China is already facing headwinds as companies such as Apple look to diversify their manufacturing base,” Neil Shah, research director at Counterpoint Research, told CNBC. “So it could be a double whammy if China targets Apple in China and indirectly Foxconn, it would further accelerate the manufacturing to outside of China.”

“Apple has huge direct and indirect contribution to the Chinese economy. So Beijing will have to think twice before targeting Apple,” Shah said.

Instead of going after Apple, the Chinese government could, however, target other U.S. firms in a big way.