Apple CEO Tim Cook signed a multi-billion dollar deal with Chinese officials to placate threats that would have hobbled its devices and services in China.
According to a new report from The Information, Cook personally met with Chinese officials in 2016 and forged a secret five-year, $275 billion USD deal with Beijing allowing the iPhone maker to freely do business on the mainland in exchange for helping it develop its technology sector.
Cook visited China in 2016 after government regulators began to pass a series of measures that hampered the tech giant’s activities in the country, according to the report.
Apple executives were alarmed at the Chinese government’s threats against features such as Apple Pay, iCloud, and the App Store, prompting Cook to hold a series of secret meetings with Beijing officials.
Cook and Communist Party officials came to a “memorandum of understanding,” according to the report. Apple pledged to invest some $275 billion USD into the Chinese economy over a period of five years:
The cornerstone of Cook’s strategy was a memorandum of understanding between Apple and the National Development and Reform Commission, China’s powerful economic planning agency. The 1,250-word agreement was originally conceived by Apple’s government affairs team in China as a way to improve relations with Beijing and win an audience with senior leaders, according to a person familiar with the agreement. Face-to-face meetings with top Chinese officials became a priority for Apple brass after regulators shut down iTunes books and movies in April 2016, the person said.
Apple reportedly invested $1 billion in Chinese ride-sharing company Didi Chuxing in order to placate authorities, the report added. Later, Cook, Apple Chief Operating Officer Jeff Williams, and government affairs head Lisa Jackson met with senior government officials in Zhongnanhai, the central headquarters of the Communist Party of China, the report notes:
Neither side disclosed details of the visit, but they were there in part to sign the economic deal, which committed Apple to aiding roughly a dozen causes favored by China. They included a pledge to help Chinese manufacturers develop “the most advanced manufacturing technologies” and “support the training of high-quality Chinese talents.”
Additionally, Apple committed to “use more components from Chinese suppliers in its devices, sign deals with Chinese software firms, collaborate on technology with Chinese universities and directly invest in Chinese tech companies,” according to the report.
American corporations have come under criticism at home for expanding their business operations in China, which has been accused of human rights violations against Uyghur Muslims, among other things.
Read the entire (paywalled) report over at The Information.