Apple CEO Tim Cook signed an agreement worth more than $275 billion with Chinese officials, promising that Apple would help to develop China's economy and technological capabilities, The Information reports.
In an extensive report, The Information revealed that Tim Cook personally forged a five-year agreement with the Chinese government during a series of in-person visits to the country in 2016 The need to push for a closer alliance with the Chinese government came from a number of Apple executives who were concerned about bad publicity in China and the company's poor relationship with Chinese officials, who believed that Apple was not contributing enough to the local economy.
Cook personally lobbied officials in China over threats made against Apple Pay, according to internal documents. Cook set out to use a "memorandum of understanding" between Apple and a powerful Chinese government agency called the National Development and Reform Commission to formally agree to a number of concessions in return for regulatory exemptions. Cook stewarded the 1,250-word agreement that was written by Apple's government affairs team in China as he met with Chinese officials.
Cook announced in May of 2016 that Apple would be investing $1 billion in Didi Chuxing, a Chinese ride-sharing startup, in order to mollify authorities, according to the report. Cook, Apple COO Jeff Williams, and government affairs head Lisa Jackson met with senior government officials in the central headquarters of the Communist Party of China.
Cook's negotiations resulted in the signing of a multi-billion dollar agreement that allowed the company to access the Chinese market in return for significant investments, business deals, and worker training in the country.
The agreement included pledges from Apple to help Chinese manufacturers develop the most advanced manufacturing technologies, support the training of high-quality Chinese talents, use more components from Chinese suppliers, sign deals with Chinese software firms, collaborate with research in Chinese universities, and directly invest in Chinese tech companies. The deal would be extended for an additional year if there were no objections from either side.
Apple will invest a lot more in China, including on new retail stores, research and development facilities, and renewable energy projects. According to internal documents, Apple spent more than $275 billion over the course of five years.
According to The Information, Apple is reliant on Cook for international negotiations and could face difficulties dealing with government affairs when Cook leaves the company.
The Information has a full report.
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