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Apple built the world’s most valuable business on top of China. Now it has to answer to the Chinese government.

China’s leader, Xi Jinping, is increasing his demands on Western companies, and Tim Cook, Apple’s chief executive, 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.

Mr. Cook declined an interview for this article. In public appearances, he has said that while he often disagrees with China’s laws, the world is better off with Apple in China.

In 2014, Apple hired Doug Guthrie, the departing dean of the George Washington University business school, to help the company navigate China, a country he had spent decades studying.
Mr. Guthrie concluded that no other country could offer the scale, skills, infrastructure and government assistance that Apple required.
“This business model only really fits and works in China,” Mr. Guthrie said in an interview. “But then you’re married to China.”

In November 2016, China approved a law requiring that all “personal information and important data” that is collected in China be kept in China.

It was bad news for Apple, which had staked its reputation on keeping customers’ data safe.
Apple’s China team warned Mr. Cook that China could shut down iCloud in the country if it did not comply with the new cybersecurity law. So Mr. Cook agreed to move the personal data of his Chinese customers to the servers of a Chinese state-owned company. That led to a project known inside Apple as “Golden Gate.”
Documents reviewed by The Times do not show that the Chinese government has gained access to the data. They only indicate that Apple has made compromises that make it easier for the government to do so.

ULTRA-condensed knowledge

WARNING, NYT,

Apple built the world’s most valuable business on top of China. Now it has to answer to the Chinese government.

Alert, NYT,

In November 2016, China approved a law requiring that all “personal information and important data” that is collected in China be kept in China.

Alert, NYT,

China’s leader, Xi Jinping, is increasing his demands on Western companies.

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Condensed knowledge

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Apple built the world’s most valuable business on top of China. Now it has to answer to the Chinese government.

China’s leader, Xi Jinping, is increasing his demands on Western companies, and Tim Cook, Apple’s chief executive, 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.

Mr. Cook declined an interview for this article. In public appearances, he has said that while he often disagrees with China’s laws, the world is better off with Apple in China.

In 2014, Apple hired Doug Guthrie, the departing dean of the George Washington University business school, to help the company navigate China, a country he had spent decades studying.
Mr. Guthrie concluded that no other country could offer the scale, skills, infrastructure and government assistance that Apple required.
“This business model only really fits and works in China,” Mr. Guthrie said in an interview. “But then you’re married to China.”

In November 2016, China approved a law requiring that all “personal information and important data” that is collected in China be kept in China.

It was bad news for Apple, which had staked its reputation on keeping customers’ data safe.
Apple’s China team warned Mr. Cook that China could shut down iCloud in the country if it did not comply with the new cybersecurity law. So Mr. Cook agreed to move the personal data of his Chinese customers to the servers of a Chinese state-owned company. That led to a project known inside Apple as “Golden Gate.”
Documents reviewed by The Times do not show that the Chinese government has gained access to the data. They only indicate that Apple has made compromises that make it easier for the government to do so.

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[genioux fact deduced or extracted from NYT]

This is a “genioux fact fast solution.”

Tag Warnings those traveling at high speed on GKPath

WARNING, NYT,

Apple built the world’s most valuable business on top of China. Now it has to answer to the Chinese government.

Tag Alerts those traveling at high speed on GKPath

Alert, NYT,

In November 2016, China approved a law requiring that all “personal information and important data” that is collected in China be kept in China.

Alert, NYT,

China’s leader, Xi Jinping, is increasing his demands on Western companies.

Type of essential knowledge of this “genioux fact”: Essential Analyzed Knowledge (EAK).

Type of validity of the "genioux fact".

Inherited from sources + Supported by the knowledge of one or more experts + Supported by research.

Authors of the genioux fact

Fernando Machuca

References

Censorship, Surveillance and Profits: A Hard Bargain for Apple in China, Jack Nicas, Raymond Zhong and Daisuke Wakabayashi, May 17, 2021, The New York Times, NYT.

ABOUT THE AUTHORS

Jack Nicas

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

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

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.