China’s dream is Apple’s nightmare: U.S. tech firms face risks as they quietly bow to China’s censorship and technology demands

“In his 2005 book One Billion Customers, a how-to guide for navigating the China market, James McGregor offered this advice: ‘Never ‘tremble and obey’ if doing so will damage or destroy your business in China,’” Andrew Browne writes for The Wall Street Journal. “Tell that to today’s American CEOs.”

“When authorities ordered Apple Inc. to pull unauthorized apps that help internet users get around censorship controls, it agreed. Chief Executive Tim Cook defended the move by saying the company was merely following Chinese law,” Browne writes. “His compliance, though, illustrates a challenge that the Trump administration faces as it builds a case against unfair Chinese trading practices.”

“Washington has a CEO problem. U.S. corporate chiefs are focused on preserving their short-term profits in China by trying to stay on the right side of a hard-line — and increasingly antiforeign — regulatory regime,” Browne writes. “If, as expected, the White House goes after China’s rampant intellectual property abuses, the companies will be torn.”

“Just about everybody in the U.S. capital is complaining about how China forces foreign companies to give up technology in return for market access,” Browne writes. “Everybody, that is, except the immediate targets of the state-directed heist—the companies themselves.

“CEOs of U.S. high-tech companies have been notably silent. That’s the case even though their operations are highly vulnerable: China makes no secret of wanting their technology so it can replace them on its way to building itself into a manufacturing superpower. Yet, not only do they refrain from criticism, some actively cooperate,” Browne writes. “Call it the Stockholm syndrome, whereby hostages start to identify with their captors. ”

Read more in the full article here.

MacDailyNews Take: It’s quite the razor-thin tightrope that Tim Cook, Apple CEO, privacy proponent, and Robert F. Kennedy Human Rights’ Board of Directors Member, has to walk.

Again, we ask: Why does the Communist Party of China so fear free expression?

When government fears the people, there is liberty. When the people fear the government, there is tyranny. — Thomas Jefferson

Tim Cook’s comments regarding China’s latest censorship effort during Apple’s Q317 earnings conference call with analysts on Tuesday, August 1, 2017:

Turning to China, let me comment on what I assumed is at the root of your question about this VPN issue. Let me just address that head on. The central government in China back in 2015 started tightening the regulations associated with VPN apps, and we have a number of those on our store. Essentially, as a requirement for someone to operate a VPN, they have to have a license from the government there. Earlier this year, they began a renewed effort to enforce that policy, and we were required by the government to remove some of the VPN apps from the App Store that don’t meet these new regulations. We understand that those same requirements are on other app stores, and as we checked through that, that is the case.

Today there are actually still hundreds of VPN apps on the App Store, including hundreds by developers that are outside China, and so there continues to be VPN apps available. We would obviously rather not remove the apps, but like we do in other countries, we follow the law wherever we do business. And we strongly believe that participating in markets and bringing benefits to customers is in the best interest of the folks there and in other countries as well. And so we believe in engaging with governments even when we disagree.

And in this particular case, now back to commenting on this one, we’re hopeful that over time the restrictions that we’re seeing are loosened because innovation really requires freedom to collaborate and communicate, and I know that that is a major focus there. And so that’s what we’re seeing from that point of view.

Some folks have tried to link it to the U.S. situation last year, and they’re very different. In the case of the U.S., the law in the U.S. supported us, which was very clear. In the case of China, the law is also very clear there. And, like we would if the U.S. changed the law here, we’d have to abide by them in both cases; that doesn’t mean that we don’t state our point of view in the appropriate way. We always do that.

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The New Yorker: What Apple has to fear from China – April 30, 2016
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