Is China Trying to Screw Apple?

applestorechina

Chinese actor and singer Peter Ho criticized Apple on China’s Twitter-like Weibo service this week. 

But don’t blame Ho. He was apparently just following orders. But orders from whom? And why?

Ho posted:

“Cannot believe Apple is playing so many dirty tricks in customer service. As an Apple fan, I feel hurt. Won’t you [Apple] feel ashamed in front of Steve Jobs? Won’t you feel ashamed in front of those young people who sell their kidneys for your products? You dare to bully consumers simply because you are a famous brand. Need to post around 8:20 pm.”

Many Chinese Weibo users said the last sentence — “Need to post around 8:20 pm” — was evidence that Ho didn’t write the tweet himself, but that it was written by someone else and that Ho was being instructed to post it.

The hashtag #PostAround820 went viral on Weibo instantly.

(Ho then pulled an Alicia Keys, and claimed his account had been hacked. Two hours after the first post, Ho wrote: “Someone stole my Weibo account and posted the previous Weibo. Will someone tell me what’s going on? This is ridiculous!”)

The Ho blunder brought attention to the other Chinese celebrities who also immediately slammed Apple after the CCTV report, a group immediately labeled by online critics as the “820 Party.”

What Is CCTV, Really?

China Central Television, abbreviated as CCTV, is run by the Chinese government and, by extension, the Chinese Communist Party, which controls China. Its directors and top executives are appointed by the government and the government pressures the station to provide support for Government policy. It has an audience of 1.2 billion people.

Each year on “Consumer Rights Day,” the station airs a special that slams scams, shoddy business practices and defective products.

This year, Apple, of all companies, was accused of treating Chinese customers worse than those in other countries — a charge clearly intended to trigger a public backlash in China against Apple.

The show’s criticism focused on what it says is Apple’s policy of replacing damaged phones with a new one that has the old phone’s back cover so that the replaced phone isn’t a complete replacement and is therefore still under the original one-year warranty — a policy the report said is exclusive to China. It also said that Apple’s one-year warranty violates Chinese law, which requires two-year warranties.

The general thrust of the story was that Apple singles out Chinese consumers for mistreatment.

Chinese netizens immediately criticized the show and the celebrity posts that supported the show as a coordinated and illegitimate attack on Apple, and many speculated as to its purpose. One leading theory is that the station is trying to blackmail Apple into advertising.

But I wonder if the Chinese government isn’t trying to do to Apple what it did to Google.

What the Chinese Government Did to Google

Google says its Chinese operations were persistently and expertly hacked during the second half of 2009 from inside China. That attack is now known as Operation Aurora.

The conventional wisdom is that Google and dozens of other American companies were hacked either by groups with close ties to the Chinese army or by the Army itself.

Google claims that crackers both stole Google’s intellectual property — possibly related to its search algorithms — and also that the privacy and data of Gmail users was compromised, specifically those of pro-democracy and pro-Tibet advocates.

As a result of the hack, as well as the requirement placed on search engines in China for self-censorship, Google claims, they “left China” — they closed their Beijing office and mainland China version of Google Search.

There were some aspects to the fiasco that represented a general clash between the interests of foreign Western companies and the interests of a single-party authoritarian, Communist Party-controlled state that favors hacking for political suppression and industrial espionage.

But there were other aspects that seemed to single Google out specifically, according to this New York Times report.

According to US Embassy cables published by Wikileaks, the Chinese leadership became increasingly alarmed back then by how much detailed and uncensored information was available via Google searches inside China about individual Chinese leaders, personally. It was part of a larger panic within the Chinese government that the Internet might be uncontrollable.

The Chinese leadership was clearly uncomfortable having a non-evil, non-controllable company like Google freely shoveling information to the Chinese public. It would have been much better for the Chinese search giant Baidu to be China’s leading search engine. And after Google left China, that’s exactly what happened — Baidu went from minority status to 73 percent market share almost overnight.

To radically over-simplify the Google-China crisis of 2009, China appears to have decided that Google was a problem. They harassed, hacked, threatened and squeezed Google until they got what they wanted: No uncensored Google internally; no majority search market share for a foreign company.

As BloombergBusinessweek called it, Baidu is “the search engine that kicked Google’s butt out of China, with an assist from the Communist Party.”

Is Apple next?

And that’s what brings me back to the current weirdness with CCTV and Apple.

First of all, as the official media wing of the Chinese government, CCTV wouldn’t air an Apple takedown without approval from Communist Party honchos. Second, it’s possible that the whole thing was initiated by people within the government.

But why would the Chinese government harass Apple?

First of all, the smart phone is potentially the greatest tool for freedom and democracy movements, and simultaneously the greatest tool for suppressing dissent, tracking dissidents and monitoring the conversations and movements of political troublemakers.

Authoritarian governments do not want to lose control of smartphones.

Like Google, Apple’s success in China is problematic.

It would be much better if a Chinese company dominated — a company like Huawei or ZTE that can be influenced or controlled in a way that benefits the Chinese government.

(A US Congressional report from late last year concluded that networking equipment from Huawei and ZTE should be banned from US government contracts because of the suspiciously close ties both companies have to the Chinese government.)

Second, Apple also draws a persistent spotlight on unsafe and inhumane conditions for factory workers in China generally, even though Foxconn workers have it far better than most in China.

Hypocritical Western human rights and worker rights campaigners don’t seem to care how Huawei factory workers are treated (and if they do, please provide links in the comments to show me serious effort to expose Huawei factory working conditions).

And third, Apple by itself makes most of the profits in the smartphone industry, which is clearly the biggest and most important segment in consumer technology representing dozens of billions of dollars per year. The Chinese government would much prefer that Huawei and ZTE dominate the global market for not only handsets, but handset profits. Now that Huawei and ZTE (and Lenovo and others) are rapidly rising in both market share and hardware sophistication, that goal looks attainable now.

Is the CCTV fiasco evidence of a new initiative by the Chinese government to screw Apple?

I don’t know for sure. If we see further moves by the government and its many organs of state power against Apple, then we might be able to say that.

In the meantime, the CCTV takedown of Apple is a strange new chapter in the long and troubled history of Apple in China, and possibly a harbinger of unpleasant things to come.

  • temicamatl

    If Apple doesn’t like China’s policies, I believe they have the right to take their business elsewhere. They know the rules of the game in China. Take it or leave it. Here’s a solution they can act like an “American” company and make products in the U.S. Oh wait, that means health benefits, breaks and other humane treatment of workers. That might not be great for profits.

    PS: Spare me the “it’s not Apple it’s foxconn” line. It’s tired. Apple knows what they are doing.

  • itchybutt

    “And after Google left China, that’s exactly what happened — Baidu went from minority status to 73 percent market share almost overnight.”

    baidu was minority? lol BS liar..

  • Mir0i

    “The Chinese leadership was clearly uncomfortable having a non-evil […] company”

    Oh come on guys.

  • PadreTomasito

    Looks like tealeafnation.com is blocked now. Site is not working anymore, at least not in Poland. China gov reaction?

  • fteoOpty64

    Looks like the Chinese government is trying to gain “bonus points” from its populace by fingering Western companies for skimming on services or product quality. VW and Audi has been targetted recently in what appears to be truthful misdeeds by those companies. It is also important to know that typical chinese consumer might not fully understand what the said “warranty” covers and what it did not cover. Service quality “under delivery” might be a case of local Apple employees not being trained enough to do their jobs. We shall see in time.

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Mike ElganMike Elgan writes about technology and culture for a wide variety of publications. Follow Mike on Google+, Facebook and Twitter.

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