On this episode of China Uncensored,
why Apple is giving in to Chinese censorship...
again.
Hi, welcome to China Uncensored.
I'm producer Matt Gnaizda,
in for Chris Chappell, who's out on a family vacation.
I can't wait to see those photos.
Shot on iPhone 7.
Speaking of which: Apple.
It's the world's most valuable company.
Its iPhones are hugely popular in China.
But on December 23,
Apple made a move in China that tarnished
its international image.
Last month, government authorities asked Apple
to remove the English language and Chinese language
New York Times apps
from its Chinese iTunes store.
Come on!
First they remove the headphone jack.
And now, freedom of speech.
Not for everyone, of course.
Just for the one-fifth of the world's population.
But this is a huge tragedy for people in China.
I mean, how are they going to access important news,
like this story about three New Yorkers
co-parenting a goldendoodle?
Or this one,
about how your teenager can help you pick
your next multimillion-dollar real estate property?
Actually,
with all of the rich Chinese trying to
park their money in US real estate,
that second article might actually be kind of useful.
Anyway,
we could sit around
making fun of the New York Times all day.
which actually kind of fun.
But, while we've criticized the Times in the past
for omitting certain sensitive stories
from its China coverage—
and even getting a few China stories wrong—
it is one of the few major US media companies
with reporters in China.
And they even publish a Chinese version.
Without it,
Chinese people lose an important perspective
on how the Western world views China.
The funny thing is,
this isn't even the first time the New York Times
has been censored in China.
Authorities started blocking the New York Times website
back in 2012
after it published an exposé on the family
of the Chinese prime minister.
But Chinese censors were technologically unable
to block citizens from directly accessing New York Times articles
through its iPhone app.
Eventually, though,
the censors figured it out:
Just make Apple to do the censoring!
An Apple spokesman told the New York Times
that it removed their app because it was
in violation of local Chinese regulations.
Now you might be a bit surprised
that Apple would bend over backwards
for the Chinese authorities like this—
considering that,
last year,
Apple fought tooth and nail against US authorities
to protect user data.
That's when the FBI wanted the company
to create a backdoor
so they could get into a suspect's iPhone.
Eventually, Apple won.
In the sense that the Justice Department dropped the case.
Because the FBI figured out how to unlock the phone themselves.
After being on hold with Apple Customer Service for 32 days.
But, in China,
a fight with authorities wouldn't just mean an expensive legal battle.
It would put Apple's entire, multibillion-dollar future in jeopardy.
Because the Chinese Communist Party doesn't exactly play fair.
For example,
Apple is still fighting a ruling
that initially banned iPhone 6 sales
over a patent-infringement claim
by a Chinese company so small,
it doesn't even have a website.
So in a country where the legal system is a joke,
Apple probably decided it's easier to give in
than to fight its way out.
And the part Apple didn't tell the public
is that it owes the Chinese regime a big favor.
You see, Apple and its China manufacturing partner Foxconn
took billions of dollars in government subsidies and perks.
That's according to this damning piece
published in the New York Times—
six days after their app was removed.
Which is why you shouldn't pick a fight
with investigative reporters.
Anyway, this isn't even the first time Apple
has caved to the Chinese censors.
In 2013,
Apple removed an app from its Chinese App Store
that let users get around the Great Firewall of China.
They've also in the past removed other media apps
from their app store
that let Chinese people read uncensored information.
The New York Times is just the most high-profile example so far.
So what's Apple's motivation for kowtowing to the Chinese Communist Party?
This is gonna suprise you... just kidding. It's money.
And it's more about sales than just the cheap manufacturing.
You see,
China is the world's biggest consumer of iPhones.
As of a year ago,
there were 131 million iPhone users in China,
compared to just 110 million in the US.
But Apple hopes it still has a ways to go,
since that's still only 17% of the Chinese smartphone market.
Yeah, there's a lot of people in China.
So it seems poor Apple
has no choice but to do what the Chinese regime tells them,
under the excuse of following "local regulations"—
and to hope that keeps the door open
for future sales in China.
But if Apple thinks the Chinese regime
intends to let them continue to be the biggest smartphone
retailer in China,
they're kidding themselves.
Like how eBay went to China in 2004 with big dreams,
but left with its tail between its legs
after Chinese website Taobao
pushed it out of the market.
And a decade ago,
Google had high hopes to be
the primary search engine in China,
and even agreed to the regime's censorship requirements initially—
only to be pushed out
by Chinese search engine Baidu,
whose co-founder is
a member of the Chinese government's top advisory body.
Microsoft assumed it would keep expanding
Windows in China forever,
only to see the Chinese government take moves in 2014
to require that Windows 8 be replaced
with a Chinese knockoff.
And most recently,
Uber got taken for a ride
when it was suffocated
by Chinese government regulation,
and was forced to sell its China business
to a local competitor.
And Apple itself has gotten in trouble in China.
In addition to the iPhone 6 delay,
Apple's own iTunes Movies and iBooks stores
were shut down by government regulators.
And state-run media has targeted the company as well.
So Apple already knows that their road in China
is going to be dangerous.
And Apple's not exactly bulletproof—
unlike those Huawei phones.
But Apple is still holding onto dreams
of a larger market share.
The thing is,
the Chinese regime almost certainly intends
to let homegrown Chinese smartphone makers like Huawei
rule in the long-term.
Which means that even if Apple
tosses its reputation into the garbage today
in exchange for a piece of the Chinese market,
in the end,
they're going to get Shanghaied.
So what do you think?
Leave your comments below.
Once again, I'm Matt Gnaizda,
filling in for Chris Chappell.
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