Why it matters: The US-China trade war took a new height when the Trump administration imposed a ban on TikTok and WeChat. At the same time, U.S. companies like Apple are heavily dependent on Chinese suppliers and consumer demand in the region, which is why they are trying to reduce Chinese regulators like never before.
Earlier this month, President Trump issued a number of executive orders that will soon ban all U.S. transactions with TikTok and WeChat, the latter of which is owned by Tencent, one of China’s largest tech companies.
The move is intended to stop the spread of Chinese apps, which are believed to be parasitic in nature and envied to become spyware platforms for the Chinese government. At the same time, Chinese officials have been pondering the idea of responding in friend since Huawei was fired from key links in its global supply chain.
One of the first targets could be Apple, whose Chinese operations include manufacturing, selling devices, and managing the App Store. Until now, the Cupertino company was able to get away with more loose censorship from the App Store, thanks to the jobs it created in the region, the taxes it paid, and the technology transferred to Chinese suppliers. According to a report by The Information, that may be about to change. This month, Apple removed more than 47,000 games from the Chinese App Store to comply with new regulations requiring paid games with in-app purchases to get approval from Chinese officials for their release.
That said, this would not be an unusual move – back in 2016, Apple was forced to shut down the Chinese versions of iTunes Movies and the iBook Store. It’s also something Apple has happily done in the past with apps like Quartz and the Hong Kong protest app, both of which were removed to discredit Chinese government officials, even if that was not the only reason.
A survey of more than 1.2 million Chinese iPhone owners has revealed that they would rather switch to Android than give up WeChat
The App Store in China has been working for a while, which seems to suggest that Apple is negotiating a deal with the Chinese government to make it possible. Normally, it would have had to operate under a joint venture with a local partner – the same way it does with iCloud, whose Chinese operation has been taken over by a state-owned company with privileged access to source code and user data.
This means that Apple is likely to have a tough environment in China in the very near future. The country is Apple’s second largest market after the US in terms of device sales, and the Chinese App Store generated revenue of $ 11.5 billion in 2019.
WeChat’s ban is expected to cause a significant drop in iPhone shipments in the region, and a survey of more than 1.2 million Chinese iPhone owners has revealed that they would rather switch to Android than give up WeChat, that is seen as a necessity for their daily lives.
