Apple Computers, a big player in the international cyber and wireless markets, was given permission by the Chinese government to begin operating its iTunes Movies and iBooks stores in the communist nation about six months ago. This week, just as abruptly, the Chinese government shut down those offerings of the computing giant. From The New York Times:
China has sweeping goals in its move against Apple, said Daniel H. Rosen, founding partner of Rhodium Group, a New-York based advisory firm specializing in the Chinese economy.
“They are interested in protecting the content that the Chinese people see, policing its national security and favoring indigenous giants such as Huawei, Alibaba and Tencent,” Mr. Rosen said. In this new era, he added, China “is strongly disinclined to accept the dominance of foreign players on the Internet, not least those from the United States.”
After the shutdown of Apple’s services, President Xi Jinping of China, who has led a crackdown on Western ideology, conducted a meeting on Tuesday in Beijing on China’s restrictive Internet policies. China’s top tech leaders, including Jack Ma, chairman of the e-commerce company Alibaba, and Ren Zhengfei, head of Huawei, were present at the meeting.
“China must improve management of cyberspace and work to ensure high-quality content with positive voices creating a healthy, positive culture that is a force for good,” a report by the state-run news service Xinhua quoted Mr. Xi as saying.
As it happens, Apple is one of the big eight tech companies that have been welcomed in China to get the infrastructure built up, even if they are now considered to be too big within China’s system as relates to communications, energy and more. One by one, in the wake of the Snowden revelations, the Chinese government has systematically harassed these companies with raids, fines, investigations, leaning on them to divest holdings within the country, and more. So far, Apple has escaped that treatment. It looks like, at least on the cultural and social media fronts – and possibly even services such as iPay, a direct competitor to Alibaba and Tencent – that may be coming to an end as they compete with Chinese business interests.
In addition to these changes, the Chinese government has actually proposed anti-terrorism measures that do require tech companies to share the secrets of their encryption programming with the government. (Currently, in the United States, this discussion is underway with public sentiment and the law being on the side of the tech companies maintaining intellectual property rights.) At this time, those proposals remain just that, however, the Chinese government has asked Apple for their “help” in state and security matters, and according to Apple’s general counsel, they have refused.
China is the second largest market on the planet and one bright spot for Apple in the face of slumping sales at home, the United States. Apple depends on the availability of its online products and outlets to assure seamless service to its customers. With the Chinese government asserting its power in shutting down the retail options, how long before the rest of the business interacting is effected?
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