March 28, 2013

Apple Finds Itself In Beijing’s Crosshairs

“This Is Going To Happen To All US Companies In China”

Beijing's vendetta against Apple is likely more complicated than it may appear

This week, the Chinese state-run newspaper People’s Daily has run a series of articles and editorials lashing Apple for “its lack of contrition, its arrogance and its discrimination against Chinese consumers.” For much of March, the Chinese government has been on the offensive against Apple, accusing the tech giant of discriminatory after-sales and warranty policies in China, lambasting what it calls bias against Chinese iPhone users through “offering shorter guarantees than in other countries, using refurbished rather than new parts, and shirking after-sale obligations.” In one People’s Daily diatribe, the writer warned that, “One day even a successful giant [like Apple], may fall.”

Though Apple quickly went into crisis management mode, releasing statements last weekend and and on March 23, government scrutiny continued. In response to a vaguely worded statement from Apple, saying that they “respect Chinese consumers” and are following current Chinese laws, People’s Daily once again accused Apple of “escaping the problem,” interpreting the somewhat ambiguous wording as a form of arrogance and passive aggression.

As some see it, the war of words between Apple and the Chinese government may be personal. According to blogger Doug Young, the latest assault on Apple may be motivated by “Beijing’s general dissatisfaction that Apple isn’t investing enough in China in tandem with its rapid sales growth.” Others say it’s a form of protectionism and xenophobia, as Beijing has made no secret that it wants to boost domestic smartphone brands and tech firms.

On Weibo, Apple fans and detractors have faced off with a wide range of opinions. Many urged the Chinese government to reevaluate their own policies, stemming, as the FT notes, from the revelation that “a number of celebrities had apparently been tasked by CCTV with promoting [a primetime television show accusing Apple of discrimination] by attacking Apple through their online social media accounts.” As Weibo user “Stinky Mouth Walker” chimed in on the claims of discrimination against Chinese consumers, “The most exploitive businesses are actually China’s own industries. Our services are awful and our products are not as good as [those made by foreign companies].”

User 敏感的防霉 largely agreed, writing that “China’s problems, such as poisonous food and milk powder, are all the result of businesses trying to exploit [us] and make the most profit.” Continuing, the user added, “If we tolerate Apple’s behavior, we are sending a message to all businesses in China [that they can] break laws and exploit Chinese consumers for profit.” Many users expressed similar sentiments, urging the Chinese government to reform their own policies instead of just slamming Apple.

More seasoned observers of the China market are looking on with a more jaded sense of resignation. As Anna Han, a Santa Clara University business law professor and advisor for U.S Companies operating in China, observed this week, “There seems to be this targeting of Apple…but this is going to happen to all U.S companies in China.” Young added that

the sentiment that sparked the editorials is likely to remain until Apple shows more good will toward China with actions like a new R&D center or other investments. Accordingly, Apple should look for more ways to invest in China, and equally important, it needs to abandon its culture of secrecy by publicizing those efforts.

If it fails to modify its game plan, it stands the very real prospect of facing repeated assaults in the official Chinese media, which will hurt its image, its reputation and ultimately its sales in China.

Business & Finance / Investment / Market Trends / Mobile / Policy / Social Media / Tech
Tag: apple, beijing, CCTV, china... , More
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