According to a new report from The Information, Apple CEO Tim Cook struck a deal with the Chinese government in 2016 in order to keep the company's business in China going.
The five-year agreement is estimated to be worth more than $275 billion and was intended to appease Chinese government officials who believed Apple wasn't doing enough for the country's economy, according to internal documents viewed by The Information.
The Information reports that Cook worked with government officials to keep Apple Pay and the App Store from being threatened. He made the deal during the first visit to China in the year that regulators had tanked the sales of the iPhone.
A person familiar with the deal says that Apple created a memo of understanding with the National Development and Reform Commission in China to make it easier for the company to meet with Chinese officials.
Apple will help Chinese manufacturers build the most advanced manufacturing technologies and train workers. It also included vows to work with Chinese universities and software companies, as well as to tap Chinese suppliers for more parts for Apple devices, according to The Information. Some of the investments were to go to Chinese technology companies, while other beneficiaries included new retail stores, renewable energy projects, and research and development centers.
In line with China's 13th Five- Year Plan, Apple further committed to "grow together with Chinese enterprises to achieve mutual benefits and a win-win situation," help develop China's IT industries, and promote science, technology, education, and environmental protection, according to The Information In return, China agreed to provide assistance.
Outside of the deal, Apple made other concessions to the Chinese government. China's State Bureau of Surveying and Mapping ordered Apple Maps to show the Senkaku Islands, which China and Japan both claim to own, even if you zoom out; regulators said they'd refuse to approve the Apple Watch if Apple didn't. The company was able to accommodate the demand.
The end of the deal appears to have been held up by Apple. In 2016 the company announced a deal with China's largest wind turbine maker, Xinjiang Goldwind Science and Technology, in which it moved its operations to China, opened 11 more retail stores in mainland China, and launched a $300 million investment fund for clean energy in China.
Apple's revenue from Greater China increased by more than 50% in the last year, and the country is now responsible for 20% of the company's sales.
Apple didn't reply to the request for comment.
