Don’t upset the Apple cart in China

Few markets tantalise global brand marketers as much as a new consumer-driven China with its emerging market of some 1.3 billion people, a large proportion of which is a middle class with a healthy spending power.

Yes, China’s economy might be struggling right now, with growth nowhere near what it was during its peak boom years. But consumption growth is still on a staggering trajectory with the consumer economy set to expand by about half, to $6.5tn by 2020. And the projected incremental growth over the next five years is comparable to adding a consumer market 1.3 times larger than that of today’s Germany or UK.

It is a situation the tech giant Apple knows only too well, as it looks to further expand its market share. According to global intelligence providers IDC, China made more money for its app store last year than any other country.

But the company also knows that the dynamics of China are unlike anything it has to navigate in other parts of the world. Which is why its latest antics seemingly designed to woo Chinese authorities has angered human rights campaigners once again.

In a move that many experts say is unnecessarily supportive of China’s heightened censorship regime, Apple has removed virtual private network (VPN) services from its app store in China in what is widely seen as a direct bowing to pressure from Beijing’s cyber regulators.

VPNs allow users to bypass China’s so-called “Great Firewall”, which is designed to restrict access to certain apps and sites from outside the country.

Now, all VPNs must be approved by the Chinese state as it tightens control over the internet. And it would seem that Apple is playing ball, even removing the New York Times app in compliance with Chinese law. In a statement, Apple CEO Tim Cook said he would “obviously rather not remove the apps … but like we do in other countries, we follow the law wherever we do business”.

However, the move has had dissenters accusing Apple of aiding China’s censorship efforts. ExpressVPN argues that such moves by the tech giant “threatens free speech and civil liberties” as it looks to take advantage of China’s potential consumer market while turning a blind eye to governmental positions that might fly in the face of civil liberties and human rights.

Critics say that Cook’s rounding on President Trump’s position – on everything from the US withdrawal from the Paris climate agreement to immigration restrictions and a refusal to further LGBT causes – is counter to his apparent acquiescing to Beijing on internet censorship. Instead of cooperating with China in fostering its internal security measures, Apple is being accused of not using its leverage to initiate change or challenge the status quo.

“Liberal social justice CEOs like Cook like to champion human rights,” says Justin Danhof, general counsel at the Washington DC-based National Center for Public Policy Research. “But when faced with pressure from a regime such as China that actively squashes the most basic of human rights – such as the right of free speech and expression – they seem all too willing to show their true colours and help keep the Chinese people in the dark.”

China is clearly an important place for a company like Apple, not just for its vast consumer market, but it is also home to a wealth of suppliers and producers of its products. The balance between developing market access and following through on human rights commitments is a challenge.

But, sustainable growth and expansion long term – in China and elsewhere – requires sensitive coupling of commercial imperatives with trust, values and integrity among what is, for Apple, a largely engaged and loyal consumer base.