Apple is banned in China – is it, though?

19/09/2023
By Ray Shaw
In Featured Opinion

The Wall Street Journal reported that Apple is banned in China. Specifically, Apple iPhones can no longer be used in Government and state-owned businesses in China.

About that time, the iPhone 15 was launched, and Apple’s stock price plummeted from US$189.70 to $174.21 in a week, knocking billions in value from the company. The Chinese ban has now reportedly been extended to include anything Apple. Or has it?

On 13 September 2023, the Chinese Government via Foreign Ministry Spokesperson Mao Ning’s Regular Press Conference appeared to have backflipped. Or did they?

China did not issue any law, regulation or policy document that bans the purchase and use of cell phones of foreign brands … however, recently we did notice media reports about security issues related to iPhone.

The Chinese Government is an expert at ‘polispeak’ (intentionally confusing or obscure statements to defuse or redirect attention). That statement is so broad that a Mac truck would have room to make a U-turn.

Analysts say that yes, the statement does not preclude Chinese citizens from buying any foreign phone. But no, it does deny that their use in Government or State-owned businesses (most of China’s enterprises affecting at least 56 million employees) is banned.

Apple is banned in China – Why?

In March 2023, the Development and Reform Commission asked Apple to strengthen its privacy and security tools for iPhones sold in China. China’s data security law has mandated the ability to intercept and read/listen to/text search encrypted communications and the ‘Do not track’ settings to be disabled for state-sanctioned Apps.

Simply put, the Chinese Government requested (euphemism for demanded) the Chinese Apple App Store remove VPNs, Apps with reference to Taiwan, or any that the Chinese government censors, and enable Chinese Apple users to be monitored and tracked. Read Smartphones made for the China home market are full of it (Spyware).

Apple will not risk its relationship with the Chinese Government, so it is not commenting. Apple either complies or its phones and devices are not sold – around 20% of its business is there.

To be clear, we are not suggesting that Chinese-made phones (which Apple’s iPhone currently is) sold here are full of spyware. Read Are Chinese-made smartphones spying on me?

It is part of a bigger picture that the West cannot influence.

First, the Huawei question

You will recall that Australia and many Western governments banned Huawei from participating in the 5G rollout. That was the thin edge of the wedge. Add strong US Government sanctions, and Huawei’s smartphone business was zero in the West.

Last week, Huawei launched the Mate 60. It is allegedly its first entirely Made in China 2025 – a policy with intended consequences compliant phone. Or is it?

It uses a 7nm System on a Chip (SoC) made by Chinese chipmaker SMIC (Semiconductor Manufacturing International Corporation). It uses what appears to be remarked Western-sourced memory and is powered by Huawei’s Google Android rip-off, Harmony OS.

Analysts say it is beyond SMIC’s or Huawei’s ability to design and fabricate a sophisticated SoC and 5G modem by at least a few years. In other words, it is based on misappropriated Western technology.

The US has predictably called for heavier sanctions against China. Meanwhile, Australia is trying to repair its export relationship for goods that China needs anyway.

Much Western tech is banned in China now.

This is all on top of Microsoft Windows and 365 products being banned for Chinese Government use. Why? To enhance national security. The real reason is that Windows and 365 use Microsoft Azure cloud, which the Chinese Government cannot ‘access’.

That explains the bans on Google (every app including Search and Drive), Amazon, Facebook (Messages, WhatsApp, Instagram), Netflix (et al.), Wikipedia, all foreign news and hundreds more (basic list here).

The Government bans these on the basis that

Does not align with socialist ideology.
Does not align with government policy.
The Government cannot control the narrative.
The Government cannot intercept and monitor user data.

Interestingly, India has banned 224 Chinese apps based on security and spyware concerns. If you have any of these, follow India’s lead.

And under Made In China 2025, every PC/laptop/server/cloud storage/router, etc., used in China must have 100% Chinese components, technology, operating system, and software. That is going to put a considerable revenue dent in Intel, AMD, Apple, ASUS, Acer, HP, MS Surface, MSI, Gigabyte and many more, leaving the 1.5 billion China market primarily to Chinese companies, including Lenovo, Huawei, and Foxconn.

CyberShack’s view – Apple banned in China – maybe or maybe not

Yes, Chinese citizens can still buy Apple in China. No, you can’t use it where Chinese security interests intersect. You won’t get any social credit for the purchase. But it is not just Apple – it is the largest single target.

To be clear, we imply no criticism of China. It can set and enforce policies like Made In China 2025 regardless of the global impact. It has the right to surveil, monitor or control its citizens however it pleases.

And to be equally clear, those who have left China are valued immigrants – some may say its biggest export – in Australia’s multicultural society.

The world is no longer predictable. Take China’s trade bans (prohibitive tariffs) remain on wine, copper, wood chips, timber, cotton, and crayfish. Yet, China is prodigiously consuming our lithium (almost all we produce), liquified natural gas, oil, iron ore, coal, wheat (barley and other cereals) – things it needs to survive, thrive and ultimately reject Western technology.

Add unrest in Hong Kong, Asia Pacific, Taiwan, and responses like AUKUS and more. Not to forget Ukraine and Russia and its weapons (and what else?) alliance with North Korea.