Receive free Apple Inc updates
We’ll send you a myFT Daily Digest email rounding up the latest Apple Inc news every morning.
State employees across China, from nuclear power plants to far-flung hospitals, have been told in recent weeks to stop using Apple phones — part of a Beijing-led pushback against the US tech group that has knocked $200bn off its share value this week.
Employees at a broad range of Chinese government agencies and state-owned enterprises have been asked by their superiors not to use Apple iPhones, extending a chill on the government use of the American company’s devices that dates back years.
“We were informed by our management in August that we must not bring any Apple products — be they cell phones or laptops — into office buildings,” one employee at the China National Nuclear Corporation told the Financial Times, declining to be named given the topic’s sensitivity.
Five other employees at various government institutions and state-owned companies confirmed there was a range of limits on their use, with some unofficial restrictions dating back many years.
Neither Beijing — which has not announced any formal curbs — nor Apple have commented on reports of bans, first raised this week by the Wall Street Journal. But coming just days before Apple launches a new smartphone, the reports alarmed investors in the company, which counts on China for roughly a fifth of its revenues.
“This must have come from the very top,” said Willy Lam, senior fellow at the Jamestown Foundation think-tank. “It’s a big decision potentially affecting many Apple employees in China, and it is sending out a message to American and other multinational corporations with business interests in China.” An informal ban sends a “message to the US government about putting restrictions on its tech sector,” he said.
The employee at the China National Nuclear Corporation said state-owned China Telecom came to their offices in late August to sell domestic phone brands.
“We were told that US security agencies could control Apple devices through security loopholes,” the employee said. “The target includes not only military people but key personnel in all walks of life.”
A nurse at a state-owned hospital in Inner Mongolia said the local government had instructed hospital staff to cease using iPhones at the end of August, citing iOS’s “huge security risks”.
Other state employees said unofficial restrictions dated back even further. One police officer said they had been banned from using iPhones a few years ago.
A civil servant in Beijing said central government departments with links to the military had also banned iPhone usage several years ago. For the past two years, civil servants across government agencies, including in non-sensitive sectors, have been encouraged to opt for Chinese alternatives, notably from Huawei, they said.
Restrictions among government agencies are, however, far from uniform. The No 10 General Design Department of the China Aerospace Science and Industry Corporation on Monday published a post on China’s social media service WeChat advising staff of procedures to check their iPhone for spyware.
State instructions are only part of the problem for Apple. Some employees have voluntarily opted to ditch the iPhone against a backdrop of escalating tensions between China and the US, as well as reports of security risks.
“I stopped using my iPhone for work a few years ago when US-China relations began to deteriorate,” said one employee at a large state-owned financial institution. “Apple is an American company and will prioritise US interests.”
Chinese media have previously reported that iPhone encryption settings have hampered investigations into local officials during anti-corruption crackdowns.
“President Xi Jinping is anxious to ensure complete control of the flow of information,” Lam said. “Apple is widely used in China, but unlike Huawei and domestically produced phones, the government doesn’t have as much direct control over its production and manufacturing process.”
This is not the first time an American tech giant has faced restrictions selling to Chinese agencies.
In May, Beijing banned operators of key infrastructure from buying US memory-chip maker Micron’s products, saying they posed “serious network security risks”. The move was widely seen as retaliation for Washington’s efforts to curb Chinese access to critical technology.
Apple, whose chief executive Tim Cook travelled this year to Beijing to meet Xi, has profited from US sanctions on its competitor Huawei. iPhone sales in China soared after Huawei was banned in 2019 from accessing cutting-edge foreign components and forced to discontinue production of its 5G smartphone lines.
Huawei last week released a new phone believed to be 5G-capable and using domestic chips. The phone is seen as a sign of how the country’s technology industry is adapting to US export controls.
The latest news comes after US commerce secretary Gina Raimondo visited Beijing to try to re-establish dialogue on economic matters.
US national security adviser Jake Sullivan said he had no plan at this stage to raise the Apple issue with the Chinese government.
Chinese technology groups have also been cut off from selling to Western government departments.
The UK government has ordered its departments to remove products made by surveillance equipment maker Hikvision, citing privacy concerns. The White House, US armed forces and the European Union’s executive branch have banned the Chinese-owned social media app TikTok from government devices.
Asked about a ban on Apple, a spokesperson for China’s Ministry of Foreign Affairs on Friday said: “We welcome products and services from any country as long as they meet China’s legal and regulatory requirements.”
Apple and Huawei did not respond to a request for comment. The China National Nuclear Corporation did not immediately respond to a request for comment.
Additional reporting by Lauren Fedor in Washington
Read the full article here