“Censorship, Surveillance and Profits: A Hard Bargain for Apple in China”
The New York Times, May 17, 2021 (Updated June 17, 2021)
By Jack Nicas, Raymond Zhong and Daisuke Wakabayashi
“Apple built the world’s most valuable business on top of China. Now it has to answer to the Chinese government.”
GUIYANG, China — On the outskirts of this city in a poor, mountainous province in southwestern China, men in hard hats recently put the finishing touches on a white building a quarter-mile long with few windows and a tall surrounding wall. There was little sign of its purpose, apart from the flags of Apple and China flying out front, side by side.
Inside, Apple was preparing to store the personal data of its Chinese customers on computer servers run by a state-owned Chinese firm.
Tim Cook, Apple’s chief executive, has said the data is safe. But at the data center in Guiyang, which Apple hoped would be completed by next month, and another in the Inner Mongolia region, Apple has largely ceded control to the Chinese government.
Chinese state employees physically manage the computers. Apple abandoned the encryption technology it used elsewhere after China would not allow it. And the digital keys that unlock information on those computers are stored in the data centers they’re meant to secure.
Internal Apple documents reviewed by The New York Times, interviews with 17 current and former Apple employees and four security experts, and new filings made in a court case in the United States last week provide rare insight into the compromises Mr. Cook has made to do business in China. They offer an extensive inside look — many aspects of which have never been reported before — at how Apple has given in to escalating demands from the Chinese authorities.
Two decades ago, as Apple’s operations chief, Mr. Cook spearheaded the company’s entrance into China, a move that helped make Apple the most valuable company in the world and made him the heir apparent to Steve Jobs. Apple now assembles nearly all of its products and earns a fifth of its revenue in the China region. But just as Mr. Cook figured out how to make China work for Apple, China is making Apple work for the Chinese government.
Mr. Cook often talks about Apple’s commitment to civil liberties and privacy. But to stay on the right side of Chinese regulators, his company has put the data of its Chinese customers at risk and has aided government censorship in the Chinese version of its App Store. After Chinese employees complained, it even dropped the “Designed by Apple in California” slogan from the backs of iPhones.
China’s leader, Xi Jinping, is increasing his demands on Western companies, and Mr. Cook has resisted those demands on a number of occasions. But he ultimately approved the plans to store customer data on Chinese servers and to aggressively censor apps, according to interviews with current and former Apple employees.
About the Authors:
Jack Nicas covers technology from San Francisco for The New York Times. Before joining The Times, he spent seven years at The Wall Street Journal covering technology, aviation and national news. He lives in Oakland, Calif., and is a Massachusetts native.
Raymond Zhong joined The New York Times as a technology reporter in 2017. He was previously based in New Delhi for The Wall Street Journal, where he covered India’s fast-moving economy and wrote about life at a busy Indian train station, avalanches and earthquakes in Nepal, the conflict in Kashmir and the surprising number of people in the Maldives who don’t know how to swim.
Daisuke Wakabayashi is a business reporter based in San Francisco, covering technology. Before joining The New York Times in 2016, he spent eight years at The Wall Street Journal, first as a foreign correspondent in Japan covering corporate news and the aftermath of the massive 2011 earthquake and tsunami. He also covered technology companies for the paper in San Francisco. Dai lives in Oakland, Calif. and grew up in New Jersey. He is a graduate of the College of the Holy Cross.
Raymond Zhong reported from Guiyang.
Keith Bradsher contributed reporting from Guiyang.
Featured Image: “Credit: CNES/AIRBUS